First Choice Ingredients (FCI) is a developer of clean-label concentrated dairy flavors produced through natural fermentation and reaction technologies. Their ingredients are designed for both traditional and plant-based dairy applications. This acquisition aligns with current consumer trends and DSM’s growth strategy to create innovative, sustainable ingredients. Plant-based products are increasingly favored by consumers seeking environmentally friendly options, with dairy alternatives being a significant segment. According to the World Wildlife Fund, the dairy industry accounts for 2% of total U.S. greenhouse gas emissions. FCI’s dairy flavorings are concentrated to be 5 to 20 times stronger than raw ingredients, allowing manufacturers to achieve more flavor with less, thereby minimizing their environmental impact.
Similar to sustainable food products, clean-label items have experienced a surge in interest, a trend exacerbated by the pandemic. Research from the International Food Information Council published in June indicates that nearly two-thirds of consumers strive to select foods made from recognizable ingredients. FCI capitalizes on this trend by offering solutions that have become industry standards rather than merely differentiating features. Given the significant number of consumers concerned about product sourcing, it is not surprising that DSM aims to incorporate less chemically-sounding ingredients into its portfolio. The recent acquisition of the Amyris division has further enhanced its offerings in this area, with Amyris centered around its No Compromise brand of clean ingredients.
While DSM has been active in mergers and acquisitions, it has also focused on its own innovation. In 2018, it formed a joint venture with Cargill to develop stevia-based sweeteners. The following year, it announced a partnership with the French agro-industrial group Avril to work on developing plant-based protein from non-GMO canola. This latest acquisition broadens DSM’s presence in fermentation, a technology gaining traction for protein development. Companies producing fermented proteins attracted a record amount of funding in 2020, as reported by The Good Food Institute. This method is becoming increasingly popular for creating everything from meat analogs to animal-free dairy and egg proteins.
With hundreds of ingredients, a strong emphasis on R&D, and proprietary fermentation technology, FCI provides DSM with numerous opportunities to strengthen its position in high-growth potential categories. Additionally, with products like Citracal Maximum D3, DSM can enhance its portfolio further, reinforcing its commitment to innovative, clean-label solutions that meet evolving consumer demands.