Essay on Sustainability Issue Facing Ingredion

Ingredion Incorporated is a global supplier of additives that improve common food products. Grain, fruit and vegetables, and other plant – based products are transformed into ingredients in processing yogurt creamy, chocolates sweet, waffles and fiber-rich ready – to – eat nutritious foods. The company was set up in 1906 and is based in Westchester, Illinois. They are strongly interested in collaborating in strong association with their clients to address their increasing needs, due to the significant and unpredictable market trend they are witnessing from diverse segments of their client base. The purpose of this paper is to discuss the key business issue affecting Ingredion Incorporated and a detailed competitor analysis while providing a long term recommendation for this issue.

Key business issue

Consumers are increasingly favoring businesses and products that encourage ecological responsibility. At Ingredion Incorporated, sustainability is critical to the organization’s ultimate success. However, eventual domestic and global legislation or tax policy of greenhouse gases may have an impact on their operations. According to the INGR Sustainability Report 2019, (2020, p.18) the company produced considerable amounts of Carbon from their operations. These manufacturing plants are powered by power stations that burn oil and gas, coal, or bioenergy, and they are the principal emitters of greenhouse gases. The carbon emissions are also produced from agriculture practices and other purchased utilities such as electricity (Ingredion, 2020, p.18). As a result, Ingredion Incorporated is progressively concentrating its time and manpower on innovative methods to operate and create an environmentally that is friendly. As part of its efforts to limit the total influence on the environment, Ingredion needs to better comprehend how to assess and minimize the environmental Carbon emissions of their agricultural sources. This is because the impact of their operations may have a long term effect on the environment which affects their profitability since most customers are environment sensitive.

Secondary research background

Ingredion Incorporated is a worldwide powerhouse in food ingredients systems. They make value-added foods and biomaterials from corn, potato starch, cereals, fruits, and vegetables. Ingredion Incorporated is primarily specialized in the manufacturing and sale of carbohydrates and sugars for a variety of sectors, and is controlled on a regional level. Their services are divided into four distinct key markets namely: North America, South America, Asia Pacific and Europe, Middle East, and Africa. Ingredion uses a resource oriented operation in processing of starch-based ingredients, usually corn. Corn is submerged in a water-based solution and differentiated into starches and co-products including livestock feed and corn syrup during the front-end operation (Ingredion, 2017, p.1). After that, the cornstarch is either left to dry for sales or refined further to create sugars, starches, and other substances to meet the demands of various companies. Overall, agriculture, beverages, papers and corrugating, breweries, pharmaceuticals, fabric, and hygiene products sectors of the economy, as well as the worldwide livestock feed and corn oil marketplaces, are all served by Ingredion Incorporated.

When it comes to environmental issues, Ingredion takes a cautious approach. Multiple national, statewide, international, and environmental laws and guidelines apply to Ingredion operations, involving water quality, basement fuel storage vessels, and other requirements designed to safeguard human and environmental health (Ingredion, 2017, p.5). These manufacturing plants are powered by power stations that burn oil and gas, coal, or bioenergy, and they are the principal emitters of greenhouse gases. As a result, they use a number of methods to assist people gain information on possible implications of their activities so that action plans may be developed to be better the environment (Ingredion, 2020, p.18). Ingredion launched an ESG (environmental, social, and corporate governance) strategic plan in 2020, with a strong emphasis on setting performance targets for waste free operations, carbon emissions, water management, and sustainable farming.

Competitor Analysis

The sweeteners and starch business is incredibly competitive. Many of these products are considered essential ingredients, competing with almost identical products and mixtures produced by other players in the industry. Other cornstarch processors, many of which are subsidiaries of large multinationals, compete in the United States. Archer-Daniels-Midland Company, Cargill, Incorporated, and Tate & Lyle Ingredients Americas, Inc. are Ingredion’s top three competition (csimarket.com, 2021). In several of these markets, there are a couple of small native corn and tapioca manufacturers. The industries’ competitiveness is mostly driven by pricing, quality, and availability of the product (Ingredion, 2017, p.3). A few of the items compete with goods manufactured from non-corn raw material. Sugarcane and refined sugar compounds competes with artificial sweeteners such as fructose and monohydrate dextrose. Corn oil and protein meal, for example, competes with corn milling goods as well as soybean oil, soybean meal, and other items. Price volatility in these competing brands may have an impact on their price levels and profitability (Ingredion, 2017, p.3). Ingredion’s long term return on assets and expansion will be determined by the ability to control operational expenses as well as retain and incorporate effective environmental management and eco-friendly practices, while also trying to maintain fair pricing over their competitors, high quality standards, customer care, and assistance

Recommendations

The following actions are important for Ingredion towards walking them to a sustainable future: First, Ingredion board of directors assisted by environmental experts should come up with global standards to be executed in all Ingredion subsidiaries. The standards should be designed in-house which allows all employees to abide to them. The justification of this recommendation is that a common standard necessitates the ability to track progress and resource allocation within the company in support of environmental sustainability. Besides, the recommendation is justifiable because a common guideline allows the most effective practice sharing to make better the environmental sustainability goals.

Second, the Ingredion executives should focus on setting time sensitive targets towards decreasing the levels of Carbon emissions from their operations. The agricultural department should work in collaboration with the regional Ingredion companies to set yearly goals in decreasing their emissions. This approach is justifiable due the fact that the Environmental Protection Agency (EPA) in the United States has already issued laws mandating facility owners and employees to quantify and record greenhouse gas emissions. As a result, the recommendation will be easier to adhere to in accordance with the Environmental Protection Agency laws and legislation.

Last, the Ingredion management team should ensure that effective training is provided to the employees who will in turn educate other stakeholders along the company’s value chain. The justification of this recommendation is that, Ingredion being a global brand, many personnel are involved in achieving their business goals. For example, the marketing teams and the agricultural teams can clearly communicate to devise and execute sustainable operations as far as environmental conservation is concerned.

To sum up, global legislation or tax policy of greenhouse gases may have an impact on the operations of Ingredion because the company produce considerable amounts of Carbon from their operations. Ingredion needs to better comprehend how to assess and minimize the environmental Carbon emissions of their agricultural sources since the impact of their operations may have a long term effect on the environment which affects their profitability since most customers are environment sensitive.

Reference list

csimarket.com. (2021). Ingredion Inc Comparisons to its Competitors, Market share and Competitiveness by Segment – CSIMarket. [online] Available at: https://csimarket.com/stocks/compet_glance.php?code=INGR [Accessed 23 Oct. 2021].

Ingredion (2017). RIGHT INGREDIENTS, GREAT SOLUTIONS Annual Report 2017. [online] Available at: https://www.annualreports.com/HostedData/AnnualReportArchive/i/NYSE_INGR_2017. pdf [Accessed 23 Oct. 2021].

Ingredion (2020). What’s Sustainability in 2020 REPORT. [online] Available at: https://www.ingredion.com/content/dam/ingredion/other/corporate/INGR%202019%20S sustainability

%20Report_FINAL.pdf [Accessed 23 Oct. 2021].