Nov 23, 2020
Cargill Health Technologies is launched by the agricultural giant- Cargill to expand the understanding of gut and digestive health and their connection to the body’s immune system.
For a company that generates more than $100 billion in sales each year, Cargill is adamant that its one-year-old division focused on animal and human health ingredients is run with the mindset of a startup.
Cargill launched the business unit in September 2019 to expand its understanding of gut and digestive health and their connection to the body’s immune system using science. By establishing the division, Cargill and those companies it partners with can move quickly to develop new ingredients and ensure that what is discovered does a better job performing its intended function.
It is seeping on strategy in the fact that the consumer is going to want more, for sure, customers have been excited for years about finding a probiotic in their yogurt, etc., etc., but the need is shifting and asking for more.
The healthy lifestyle more consumers are leading today has prompted people to take a deeper look into products that can have a specific impact on their body, such as improving their immune system or digestive health. This trend was intensified during the coronavirus pandemic.
Cargill Health Technologies generate a small portion of Cargill’s annual revenue that totaled $114.6 billion in its fiscal 2020 ended May 31 and could reach at least $1 billion in sales within the next three or four years.
The market for functional foods has been sharply growing and there is no sign the upward trajectory is going to abate anytime soon. The global market for these ingredients is projected to rise to $117 billion by 2027 from $69 billion a year ago — an annual increase of 6.74%.
Cargill Health Technologies not only plans to develop its own ingredients that it could license out to other companies but also partner with food, beverage, or other ingredients companies to create them.
Despite getting a late start compared to some of its competitors, Cargill Health Technologies has a number of advantages that others in the space do not have.
It has access to decades of work already completed at Cargill and the backing of a cash-rich parent company that views Health Technologies as one of its future growth engines. Cargill also is focusing more on its work on prebiotics, a move that should separate it from large probiotic manufacturers such as DuPont and DSM.
So far, Cargill has invested more than $1 billion in the division with an agreement to double that in the next few years.
While researchers have known there was a connection between the gut and brain or the gut and the immune system, it was only since about 2015 that the technology became available to understand those connections and develop products to improve them.