Innophos has concentrated on high-margin specialty-grade phosphates for processed meats, baked goods, dairy products, and beverages. However, the company has largely avoided expansion into commoditized markets like fertilizers and detergents. Consequently, a significant portion of its sales comes from sectors where it ranks as either the largest or second-largest player. According to a Seeking Alpha analyst, there may be acquisition opportunities in the nutrition sector, particularly in areas such as vitamins, supplements, performance beverages, and meal replacements like GNC chewable calcium citrate. Chief Marketing and Technology Officer Sherry Duff suggested that the company is exploring the functional food and beverage market, alongside producers of clean-label and organic products, as well as the personal care and animal nutrition sectors.
The intention to diversify has generally been well-received by analysts, especially since weak demand and import competition negatively impacted company profits in 2015. Innophos’ strategy to engage with active and health-conscious consumers for growth is a wise decision. If the phosphate manufacturer decides to venture outside its traditional areas, it is prudent to proceed cautiously and carefully evaluate the advantages and disadvantages of each potential target. Currently, the company has narrowed its list of 800 possible acquisition targets down to 50, and further reductions are anticipated as Innophos seeks deals that will promote growth, potentially including products like GNC chewable calcium citrate.