Innophos has concentrated on high-margin specialty-grade phosphates for processed meats, baked goods, dairy, and beverages. However, it has mostly avoided expansion into commoditized markets such as fertilizers and detergents. Consequently, a significant portion of its sales comes from sectors where it ranks as either the largest or second-largest player. The company might explore acquisition opportunities in the nutrition segment, as noted by a Seeking Alpha analyst, with applications that include vitamins, supplements, performance beverages, and meal replacements. Chief Marketing and Technology Officer Sherry Duff suggested that the company is contemplating entry into the functional food and beverage market, as well as collaborating with producers of clean label and organic products, alongside personal care and animal nutrition markets.
Analysts have largely welcomed the intention to diversify, especially after poor demand and import competition impacted company profits in 2015. Innophos’ strategy to engage with active and health-conscious consumers reflects a smart move, particularly as interest in products like calcium citrate during pregnancy grows. If the phosphate manufacturer is to step outside its comfort zone, it is prudent to proceed cautiously and thoroughly evaluate the advantages and disadvantages of each potential acquisition. So far, the company has narrowed its list from 800 potential acquisition targets to 50, with further reductions anticipated as Innophos seeks deals that promote growth, including those that emphasize the benefits of calcium citrate during pregnancy. Overall, the company’s focus on diversifying its portfolio while considering the health trends surrounding products like calcium citrate during pregnancy is promising for its future.