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MGPI still susceptible to low-carb swings

11-Feb-2005

The decline of the low-carb trend continued to impact MGP Ingredients in Q2, though this slide helped give a slight boost to its fiber rich products.

MGP announced earlier this week that its second-quarter earnings came in at $1.4 million, down 26 percent from $1.8 million in the comparable period last fiscal year, while net sales nudged up 3 percent to $61.2 million from $59.4 million.

The firm experienced a sales decline in its Arise wheat protein isolates and its Wheatex textured wheat proteins.

 

"Both Arise and Wheatex sales were impacted by the slowdown of the low-carb market and Arise was further impacted by growing competitive pricing pressures," said Ladd Seaberg, the company CEO.However, Fibersym sales saw a "modest rebound", although Seaberg declined to elaborate on this.

 

He added that MGPI was not abandoning its food ingredients business, but would be using its distillery operations as a money-making source for the time being. But, with the recent emphasis in the US on the importance of fiber - a message reinforced in the recent dietary guidelines - Fibersym may have a more promising future.

 

Productscan, the Naples, New York database company, said late last year that the percentage of new food and beverage products making high fiber claims in North America has been stuck at around 2.5 percent for the past four years, but that latest research revealed this figure had increased to 4.2 percent in 2004.

 

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