Oterra makes first US acquisition with Food Ingredient Solutions


Dive Brief:

  • Oterra has made its first U.S. acquisition with the purchase of Food Ingredient Solutions, a New Jersey-based manufacturer of natural and synthetic colors and antioxidants. Terms of the deal, which was finalized in December, were not disclosed. 
  • The acquisition includes Food Ingredient Solutions’ two certified processing facilities in Teterboro, New Jersey, and Marshfield, Missouri. Founder and CEO Jeff Greaves will join Oterra in a yet-unnamed role.
  • The purchase is the latest in a string of acquisitions by the company formerly known as Chr. Hansen Natural Colors, as it works to gain international scale after being sold in 2020 to a private equity firm and adopting a new identity.

Dive Insight:

Food Ingredient Solutions has a product portfolio that includes a large range of natural colors from sources such as alfalfa, beet, huito and red cabbage, and two processing plants capable of producing kosher, halal and organic ingredients. This gives it a profile similar to other bolt-on acquisitions made by Oterra over the past year.

In June, the former Chr. Hansen Natural Colors acquired Spain-based Secna Natural Ingredients, providing it with a line of red, purple and caramel colors produced by anthocyanins in grapes, black carrots, cabbage and beets. And Oterra recently closed on its purchase of Diana Food’s natural coloring business from Symrise AG. That acquisition also brought 10 production sites in France and the United Kingdom, as well as Diana’s expertise in red beet-based natural colors.

With Food Ingredient Solutions, Denmark-based Oterra now has a foothold in the massive U.S. market, where consumer demand for foods and beverages with natural colors shows no sign of abating. The global market is forecast to have a compound annual growth rate of 6.8% to hit $2.7 billion by the end of 2027, according to Coherent Market Insights.

“North America is one of the fastest growing natural colors markets, and this acquisition puts Oterra in a great position to further support our customers in the conversion towards natural colors” said Oterra Chairman Cees de Jong in a statement.

Having a presence in the U.S. is also key to helping Oterra compete in a market that has attracted several international entrants, innovations and investments in natural and clean-label ingredients players. This includes Givaudan and its October purchase of U.S.-based DDW, The Color House, which has expertise in caramel and natural colors.

Sensient, whose colors division is headquartered in Missouri, has been active in product development. Last year it got FDA approval for the use of its butterfly pea flower extract as a color additive, clinching it a leading position with natural blues. And U.S. ingredients giant Archer Daniels Midland also has established a portfolio of natural blues, greens, purples and browns.

Established in 1999, Food Ingredient Solutions provides Oterra with more than two decades of natural colors expertise, although it also brings along a line of synthethic colors and natural antioxidants. Whether Oterra plans to hold on to those assets — or sell them off to keep its eye on the highly competitive natural colors space — is something to watch in the months ahead.

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