MGP slims to focus on higher margin ingredients

By Guy Montague-Jones

- Last updated on GMT

Related tags: Enzyme

MGP Ingredients has reported a slump in fourth quarter sales of over 50 percent after reducing production and cutting out unprofitable product lines.

The supplier of grain-based starches, proteins and food grade alcohols has restructured significantly over the past year to combat excessive costs.

Last year the Kansas-based ingredients business reported a net loss of $11.7m and has since sought to reduce production of commodity type ingredients and focus instead on value-added products.

New product mix

Talking about the new product mix, CEO Tim Newkirk said: “We aim to be the first call in dietary fiber, protein isolates and concentrates, and textured proteins. There is also a renewed drive to become a more valuable partner with our customers in the food grade alcohol markets.”

With the size and scope of the business narrowed, Newkirk said: “MGP Ingredients is back to being a niche player.”

Financial results

As a result of the changes, which included a 55 per cent reduction in the size of the workforce, fourth quarter sales dropped 52.8 percent to $15.5m and sales for the fiscal year fell to $80.1m from $100m last year.

MGP Ingredients said the new product mix and cost structure created by the restructuring and resulting sales drop has already had a positive effect on profits.

Illustrating the point, the company said fourth quarter pre-tax income from the ingredients segment was $1.4m compared to a pre-tax loss of $7.9m last year. Meanwhile, net loss across the whole business in the quarter reduced from $10m last year to $2.9m this year.

Despite the improvements to the bottom line in the fourth quarter, MGP Ingredients incurred a net loss for 2009 of $69.1m, compared to a loss of $11.7m last year. Charges related to restructuring were blamed for this increase in losses.

Related news

Show more

Related products

show more


Pectin's "a-peeling" future

Cargill | 08-Aug-2022 | Technical / White Paper

Familiar, plant-based, highly functional… today's pectin ticks off a lot of boxes for consumers and product developers alike. Learn how this humble...

Sustainable sweetness

Sustainable sweetness

Cargill | 04-Aug-2022 | Insight Guide

According to proprietary Cargill research, more than half of consumers indicate they are more likely to purchase a product if it includes a sustainability...

Lower carbon flour sourcing solutions.

Lower carbon flour sourcing solutions.

ADM | 28-Jul-2022 | Insight Guide

As more stakeholders demand action that can slow climate change, we can help you calculate and reduce GHG emissions from farm to flour.

Leading the way to less sugar

Leading the way to less sugar

Cargill | 15-Jun-2022 | Infographic

Meeting consumer expectations for less sugar isn't always easy – due to its many functions and complex attitudes toward alternative sweeteners.

Related suppliers

Follow us


View more