Food & Beverages

ARCHER DANIELS MIDLAND COMPANY

Company Profile Analysis

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ARCHER DANIELS MIDLAND COMPANY - Food & Beverages showcase

Year Founded & Workforce

1901-12-31

38,100 Employees

Industry

Food & Beverages

Services

A

ARCHER DANIELS MIDLAND COMPANY Overview

Company Headquarters: Illinois, US

Founded: 1902

Workforce: ~38,100

Company Working: Archer Daniels Midland Co (ADM) specializes in manufacturing food and beverage ingredients and other varieties of agricultural products. The company's product portfolios include natural flavors and colors, health and nutrition products, vegetable oil, corn sweeteners, flour, animal feed, and biofuels. It primarily operates in three business segments: Ag services and oilseeds, carbohydrate solutions, and nutrition. The origination, marketing, transportation, and storage of agricultural raw materials are all included in the worldwide operations covered by the agricultural services and oilseeds category. The section for carbohydrate solutions is involved in the wet and dry milling of corn and wheat, among other things. The segment converts corn and wheat into ingredients and products that are used in the food and beverage industry including sweeteners, corn, wheat starch, dextrose, syrup, glucose, and wheat flour. The nutrition segment serves customer needs for food, beverages, health, wellness, and many more. The nutritional segment covers the manufacturing, sale, and distribution of specialty products that include natural flavor ingredients, flavor systems, natural colors, plant-based proteins, emulsifiers, soluble fibers, polyols, and other specialty food and feed ingredients. With more than 270 processing plants, 500 crop procurement facilities, and a vast crop transportation network, Archer-Daniels-Midland Company (ADM) has a presence in over 160 countries worldwide. The company provides tapioca maltodextrins and syrup solids those are highly versatile and a taste neutral ingredient that offers various functionality, offering humectancy and adhesion and helps in preventing sugar crystallization, and the maltodextrin and corn syrup solids offers functionality that don’t impact the finished products taste.

Strategy

The Archer-Daniels-Midland Company (ADM) aims advanced productivity and innovation strategies which include: unlocking $1.6 billion through Billion Dollar Challenge; beginning a worldwide push to upgrade, digitize, and automate production facilities; expanding a comprehensive portfolio of initiatives to decarbonize the value chain, particularly through the rapid expansion of regenerative agriculture work; and showcasing the benefits of decarbonization work through joint ventures with LG Chem for lactic and polylactide. One of ADM’s key strategies is to expand its global reach through acquisitions and partnerships. In 2020, ADM acquired the remaining 50% stake in British grain trader Gleadell Agriculture Ltd. This acquisition will enable ADM to expand its presence in the UK and enhance its global grain trading capabilities. In addition, ADM has also invested in expanding its operations in Asia, particularly in China, where it has a joint venture with COFCO. The firm is putting a lot of effort into accelerating its international growth to enhance its presence through a number of joint ventures, partnerships, and development initiatives. The firm provides goods that are region-specific and meet the needs of the end-use industry. To be competitive in the market, the organization makes investments in research and development. For instance, research and development costs for the fiscal year ending in 2022 were $216 million after deducting grant reimbursements.

Company Snapshot

$64,656M

Revenue

38,100

Employees

1901-12-31

Founded

Illinois, US

Headquarters

SWOT Analysis

Strengths

  • State-of-art manufacturing facility
  • Wide global footprint
  • High investments in R&D
  • High investment in research and development
  • Leading share in the global bio-based chemicals market
  • Focus on R&D and process automation
  • Provision of online services such as e-ADM platform
  • Wide distribution network
  • The company is upfront towards adopting new technologies to enhance their production capacity and deliver quality product to the consumers
  • The company has a strong foothold in the global market and constantly indulge in innovation, product development and sustainability to strengthen their business portfolio.
  • A wide variety of clean label ingredient product portfolios are present
  • Strong research & development investments across laboratories and technical innovation centers
  • Comprehensive network of R&D across the globe such as state-of-the-art equipment and culinary center, innovative laboratories, and production unit worldwide
  • Strong workforce and robust financial performance of the company
  • Diversified product portfolio for ingredients for various sectors
  • Broad range of food and beverage ingredients, including sweeteners, which provides the company with a competitive advantage in the sweetener market.
  • Globally dispersed R&D facilities, as well as modern laboratories and pilot plants.
  • Exhaustive network of R&D across the globe such as state-of-the-art equipment and culinary center, innovative laboratories, and production unit worldwide
  • The company has a strong financial position with a substantial work force.
  • Broad range of product portfolio for ingredients for various sectors
  • The logistics of the company is considered a leader in supply chain solutions and has access to far-reaching transportation networks across the globe
  • The company has had robust final performance over the years owing to expertise in the domains coupled with a highly skilled workforce
  • The company has made proficient at entering new markets and creating success in the newly added segments

Weaknesses

  • Increasing dependence on key retailers in developed markets
  • Declining revenue since 2015
  • Increased production costs
  • High attrition rate
  • ADM witnessed an increase in its debt in FY2016. The company's total long-term debt increased from $5,779 million in FY2015 to $6,504 million in FY2016.
  • Limited presence in Europe, Asia-Pacific, and Middle East & Africa
  • Increasing prices of raw materials and high energy consumption are adversely impacting the cost of production in the ingredients industry
  • The volatility in the commodity prices
  • Sweetener production relies heavily on the supply and price of raw materials, which can be volatile and subject to supply chain disruptions.
  • Exchange rate impact due to the high ratio of overseas sales
  • The company is heavily depended on United States market.
  • The company is making expenditures above the industry average on R&D; however, it is unable to compete with its rivals operating in the industry in terms of innovation
  • The reduced demand for synthetic ingredients-based products such as colors, preservatives, anti-oxidants flavor enhancers, along with artificial sweeteners, may hamper the sales of some of the product offerings

Opportunities

  • Expansion in developing countries
  • New product launches and development of novel technologies
  • Supply of natural food ingredients
  • In order to generate high revenue out of their product portfolio, the company needs to strongly focus on expansion of their geographical presence and to strengthen their footprint
  • More investments in strategic acquisitions will enhance its operations.
  • Strategic mergers and acquisitions, partnerships and joint ventures to strengthen its global presence in the clean label ingredients market
  • The wellness market is creating opportunities, for scientific and naturally sourced ingredients
  • Partnerships with various commodity providers in developing regions may create growth prospects for the company
  • ADM could innovate and develop new products, such as low-calorie or functional sweeteners, to meet changing consumer demands.
  • New product launches, acquisitions, and collaborations can be the major factors that can create the growth opportunities for the company.
  • More focus on partnership as company has recently introduced its new line of tapioca maltodextrin with Vedan International can lead the market growth of the company.
  • Technological innovation is considered one of the major opportunities for the company to make a differentiated strategy for pricing in the new markets
  • Opening into emerging nations as new markets with the government agreement with the adoption of new standards based on production, along with the free trade agreement with the government may create lucrative prospects for the company

Threats

  • Increase in raw materials prices
  • Rivalry among food industries and bio-based chemicals producing industries regarding raw materials that are high in demand in both the industries
  • Regulatory concerns over GMOs
  • Intense market competition
  • Intense competition and presence of established players in the animal feed market tends to hamper the growth of the company
  • Logistics and transportation costs during market expansions across the globe
  • Fluctuations in the prices of fuels can be a major threat to the profitability and the production cost of the company
  • The company is susceptible to progress the new alternative products
  • High logistics and expansion costs in emerging economies
  • Strict regulations from country to country
  • Due to foreign exchange rates, product qualities, price, substitute products the company is facing a significant competition in the market.
  • Dynamic rules & regulations regarding to the market.
  • Shifting preferences of the buying pattern of consumers from online retailing could be a threat to the company
  • The continuous fluctuation in raw materials, fuels, and energy prices can also be a major threat to the profitability and the production cost of the company

Key Developments

DateApproachDevelopment
Jan-2015Joint-VentureADM and Quality Liquid Feeds entered into a 50-50 joint venture for the production and sale of liquid feed supplements for livestock to generate high revenues through the segment.
Jun-2016ExpansionADM opened its new, high-tech feed facility in Glencoe, Minnesota.
Mar-2017ExpansionADM announced the expansion of its Animal Nutrition footprint in China with the construction of a new feed-premix facility in Xiangtan, in Hunan Province, central China. They also announced the addition of aquaculture feed production lines at its existing Nanjing complex in Jiangsu Province, eastern China.
Oct-2017ExpansionThe company announced its plan to open new feed premix plant in Zhangzhou, China.
June 2019Product LaunchThe company participated in the Institute of Food Technologists Expo, held in New Orleans, and came up with a new product portfolio consisting of clean label ingredients such as Kombucha Bite for Gut Health.
May 2019Product LaunchArcher-Daniels-Midland Company boosts its clean label product portfolio with a range of organic flours.
May 2019Product LaunchIn order to meet the rising demand for clean label products, Archer-Daniels-Midland Company introduced two organic flours to its complementary range of organic and grain-based products.
September 2021ExpansionADM Expands Global Nutrition Capabilities with Advanced Flavor Manufacturing Facility in Pinghu, China.
March 2019AcquisitionADM acquired Florida Chemical Company, the key manufacturer of citrus oil and ingredients.
March 2018AcquisitionADM announced the agreement to the acquisition of 50% of Russian firm Aston Foods and Food Ingredients, the company mainly operates in the business of starches and sweeteners. This strategic move made by ADM has enabled its business in the Russian market.
March 2017LaunchADM launched two sweetener brands VerySweet monk fruit, and SweetRight stevia.
December 2019ExpansionArcher Daniels Midland Company had expanded its reach of its starch portfolio to the Canadian market through a partnership with IMCD, a leading distributor of specialty chemicals and food ingredients, effective immediately. ADM texture solutions available to buyers in the Canadian market will include tapioca starch, corn starch and tapioca maltodextrin in addition to a range of other ADM solutions. This strategic partnership with IMCD will enhance the ability of the food industry to innovate and meet consumer needs in the Canadian market.
July 2018PartnershipArcher Daniels Midland Company had introduced a new line of specialty tapioca starches and tapioca maltodextrin ingredients in partnership with Vedan International. ADM’s tapioca maltodextrin is non-GMO and is available in an organic version. ADM’s tapioca modified starches are also non-GMO.

Product Offering

  • ARCHER DANIELS MIDLAND COMPANY
    • Ginger Extract
    • Bio-based Chemical
    • Animal Feed
    • Clean Label Ingredients
    • Global Sugar Reducing Ingredients Market
    • Global High Intensity Sweeteners Market
    • Maltodextrin
    • Global Sugar Alcohols Market

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About the Author

Wantstats Research Team

Wantstats' research desk profiles ARCHER DANIELS MIDLAND COMPANY as part of our ongoing coverage of the Food & Beverages sector, drawing on public company data, filings, and market intelligence.

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Thanks for your great support. Appreciate it. Well received report. It helps us to understand market well. We're planning other area of survey in the future, let's keep in touch.
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Strategy & Business Development Director, Dogan Holding

We got the report in time, we really thank you for your support in this process. I also thank to all of your team as they did a great job.
Noah Malgeri
Noah Malgeri

Co-Founder, Mojave Rail Fabrication Limited

This is really good guys. Excellent work on a tight deadline. I will continue to use you going forward and recommend you to others. Nice job.
Michael Robert

Manager, JavolVision

Thanks, I am so happy that we worked together. Maybe we still can work together in the future.
Joseph Aguayo
Joseph Aguayo

Sales Operations & Pricing Manager, Intel

Thanks. It's been a pleasure working with you, please use me as reference with any other Intel employees.
Bong Lau

Sales Leader, Bamberg

We bought your "2025 report" in 2020. Everything is fine and very good.
Peter Groot Koerkamp
Peter Groot Koerkamp

Account and Business Manager, EFS-Holland BV

Thanks for sending the report it gives us a good global view of the Betaïne market.
Younghwan Choi
Younghwan Choi

Senior Retail Manager, LG Chem

We found the report very insightful! we found your research firm very helpful. I'm sending this email to secure our future business.
Mark Irwin

Management Consultant, Level 21

I am very pleased with how market segments have been defined in a relevant way for my purposes (such as "Portable Freezers & refrigerators" and "last-mile"). In general the report is well structured. Thanks very much for your efforts.
Rob Kooiker

Group Product Manager HVAC & Fire Protection GMA, Rockwool

I have been reading the first document or the study, the Global HVAC and FP market report 2021 till 2026. Must say, good info! I have not gone in depth at all parts, but got a good indication of the data inside!
Jason Lee

R&D Director, Seojin

Thanks for your great support. Appreciate it. Well received report. It helps us to understand market well. We're planning other area of survey in the future, let's keep in touch.
Akif Moroglu

Strategy & Business Development Director, Dogan Holding

We got the report in time, we really thank you for your support in this process. I also thank to all of your team as they did a great job.

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