Dive Brief:
- Tech-enabled ingredients company Benson Hill is selling the assets and equity of its Fresh division to IMG Enterprises for $21 million. With this divestiture, Benson Hill plans to concentrate on its ingredients division.
- The first stage of the sale closed on Dec. 29, when Florida-based agribusiness company IMG paid $18 million for Benson Hill’s facility, real estate and packhouse in Vero Beach, Florida. IMG will buy the rest of the business for $3 million in the second quarter of 2023 as part of a stock purchase agreement.
- Benson Hill, which uses its CropOS platform to design crops with more desirable properties — including high-protein soybeans and more nutritious and better tasting yellow peas — established both its Fresh and Ingredients segments in 2021.
Dive Insight:
When Benson Hill established its Fresh and Ingredients segments, it made sense for the company to have two major paths to develop products to commercialize. But during the last two years it became apparent to the company that its greatest potential is in its ingredients business.
A year ago, Benson Hill launched its TruVail non-GMO soy protein line, which includes high-protein flour, “less processed” soy protein concentrate and texturized proteins for use in traditional soy protein and plant-based applications. The company also has created Veri Cooking Oil, which is high in omega-9 fatty acids and specifically calibrated for high-heat cooking.
This ingredients line is getting quite a bit of traction so far. In April, Kellogg partnered with Benson Hill to use its ultra-high protein soybeans as ingredients in its MorningStar Farms products, both to increase protein content and for the sustainability bonus — Benson Hill’s soy doesn’t require as much processing as traditionally farmed beans. In August, Benson Hill signed an exclusive processing and commercialization partnership for its ultra-high protein soy ingredients with Archer Daniels Midland.
Benson Hill also has built an ecosystem to process its ingredients, acquiring a soybean crushing facility from Seymour, Indiana-based Rose Acre Farms in 2020 and harvesting the first commercial plantings of the legumes last year. And last January, Benson Hill acquired ZFS Creston, an Iowa-based manufacturer of food-grade white flake and soy flour, for about $102 million.
Benson Hill is working on its yellow pea ingredient platform, launching a large-scale breeding and commercialization initiative in 2021 and investing in its pea ingredient subsidiary, Dakota Ingredients.
Bruce Bennett, president of ingredients at Benson Hill, told Food Dive in an interview last summer that demand for the company’s ingredients is “incredibly strong,” especially as consumers are looking for food with more health and sustainability value — and soy and peas have been grown for decades as commodity crops with a focus on volume rather than nutritional quality.
“Our goal isn’t to reconstruct an entire industry,” Bennett said. “It’s about optimizing the current chassis of the industry.”
Benson Hill realized something that many others who pursued produce businesses have learned: It’s a difficult business with its own challenges. In the company’s August earnings call, CEO Matt Crisp said the company decided to suspend R&D for the segment, seeing Benson Hill’s future and greatest impact in ingredients. In the most recent quarter, weather-related challenges resulted in 11% lower revenues for the Fresh business. And the segment wasn’t nearly as much of a profit driver, with Fresh accounting for just 6% of the company’s total $130.2 million in revenues.
Campbell Soup faced a similar issue with produce. The soup and snacking company purchased fresh produce and products company Bolthouse Farms in 2012, hoping that it could bolster its better-for-you offerings. Ultimately, the challenges of a produce company — and its drag on earnings — led Campbell Soup to sell the division in 2019.
