ST. LOUIS, MISSOURI, US — Despite sustaining a loss of more than $127 million in fiscal 2022, executives at food technology company Benson Hill head into fiscal 2023 upbeat thanks to a 319% surge in year-over-year revenues and the expectation that proprietary revenue will continue to grow and gross margin will expand.
“Demand for our innovations remains strong, although persistent high supply chain costs are impacting our profitability in certain food ingredient categories, which we believe will continue for the foreseeable future,” said Matthew B. Crisp, co-founder and chief executive officer of Benson Hill. “To meet the needs of our customers, we will execute a more targeted growth strategy focused on the highest-margin proprietary products and one that de-emphasizes lower margin products.
"In addition, we are finalizing and expect to implement capital management changes designed to reduce debt, interest and operating expenses, and increase return on capital, while maintaining our commitment to fully fund the business," he continued. "Our team demonstrated its ability to meet our strategic objectives, and we remain steadfast in our commitment to shareholders to achieve significant yet disciplined growth, as well as our target of profitability in 2025.”
Benson Hill sustained a loss of $127.91 million in the fiscal year ended Dec. 31, 2022, which compared with a loss of $126.25 million in fiscal 2021. Revenues, meanwhile, surged to $381.23 million from $90.95 million. Results do not include the Fresh business, which was divested in a two-part transaction in early January.
Operating expenses at Benson Hill totaled $128.53 million, including $47.5 million in research and development expenses. This compared with operating expenses of $112.52 million in fiscal 2021 (which included $40.57 million in research and development expenses).
In a March 13 conference call with analysts, Crisp highlighted three milestones he believes have Benson Hill positioned for future growth.
First, the company executed its closed loop business model for its soybean-derived ingredient products from farmer partners to its integrated soy processing facilities to its customers — all within 12 months.
“This furthered demand for our proprietary soy portfolio, which led to nearly 100% year-over-year proprietary revenue growth to $73 million,” he said. “And as a result of this demand, operational excellence and an elevated commodity pricing environment, we raised our ingredient segment guidance twice from the original outlook we gave this time last year.”
Second, Benson Hill introduced its ultra-high protein soy ingredients with differentiating value propositions of traceability, sustainability, accessibility, being domestically sourced and having higher nutrient densities, he said.
“As a result, we established important commercial relationships, including a significant licensing partnership with market leader, ADM, validating our technology and go-to-market capabilities that we have previously discussed,” Crisp noted.
The third key milestone was the unveiling of Benson Hill’s “robust product pipeline,” which Crisp said demonstrates how the company expects its CropOS technology platform “to extend our leadership in delivering innovative product solutions to meet increasing demand for better food options.”
Looking ahead to fiscal 2023, Crisp said Benson Hill expects another year of strong revenue growth with a 40% to 50% increase in proprietary revenues to a range of $100 million to $110 million “as we continue to shift the mix away from nonproprietary commodity soy in our closed-loop model.”
“We believe consumer-driven secular trends are tailwinds for our proprietary soy flour, flake and texturized products across plant-based market segments such as bakery, cereal, meat extension and alternative meat,” he said.