With an eye toward gaining a greater foothold in the flavors and ingredients category, agriculture giant Archer Daniels-Midland is ending 2023 with two major acquisitions.
ADM announced earlier this week that it had reached agreements to purchase dairy flavoring maker Revela Foods and UK-based functional ingredients producer FDL. It did not disclose financial terms for either deal.
Revela Foods, which saw $240 million in sales this year, is a leader in the dairy ingredients space. It operates three production facilities in the Midwest that use enzyme technology to craft dairy flavorings for a variety of foods, from snacks to sauces to desserts. ADM said in the press release the Revela purchase is expected to be completed in early 2024.
“ADM has a strong presence in the North America savory flavors segment, and we’re excited to work with the impressive Revela team to expand our opportunities there, bringing their technology and innovation together with our global capabilities to power our unparalleled range of ingredients and complete solutions for customers who are looking for great flavors and clean labels,” said Calvin McEvoy, ADM’s president of global flavors, in a statement.
FDL will also further the agri-business giant’s reach into flavorings. The company has created over 10,000 proprietary flavor formulations, ADM said. FDL works to help formulators infuse ingredients into new products, such as vanilla and menthol. The UK-based company operates three facilities in its native country, with a projected $120 million in sales in 2023. FDL also has a strong presence in the European foodservice sector, according to the press release announcing the deal.
“FDL’s innovative and agile formulation knowledge, deep end-use applications expertise, and strong customer base make them a great addition to ADM’s global flavor capabilities,” McEvoy said in a statement.
The FDL acquisition is projected to close in January, according to ADM.
At a time of slower M&A activity in the ingredients space amid economic headwinds, the two purchases further ADM’s bid to become the leader in the space.
In its 2024 ingredient trends forecast, ADM projected that bold colors and flavors — along with heightened interest in better-for-you attributes and affordability — will define the new products launched in the food and beverage space next year. ADM is also leveraging new technological capabilities to fuel ingredient formulations in the gut health space through its partnership with Brightseed. The companies are using AI to study molecular interactions between plants and the microbiome to assess ingredients’ nutrition.
