ATCHISON, KANSAS, U.S. — MGP Ingredients (MGPI) intends to focus on high fiber, high protein and non-GMO trends within its ingredients solutions segment as part of a five-year strategic plan for growth announced on Feb. 5.
“MGP is an innovative leader in the development, production and marketing of alcohol products and food ingredients,” said Gus Griffin, who became president and chief executive officer of MGPI in July 2014. “Since joining the company, I have worked with leaders across the organization to assess how we can best build on MGP’s proud heritage to deliver superior financial results and benefit all of our stakeholders.”
Griffin said MGPI strengthened its foundation in 2014 with the addition of new leadership at both the board and executive level. As a result, the long-term growth potential is “exciting,” he said.
“Looking out five years, the primary financial metric to measure the success of the implementation of our new strategic plan will be operating income,” Griffin said. “Our goal is to increase our operating income four-fold over 2014 (adjusted for any non-recurring items).”
Griffin described how the company’s new strategic plan is designed to leverage the company’s history and strengths.
“First, we intend to maximize the value of our current production volumes,” he said. “In particular, we want to take advantage of favorable macro trends, such as the growth of the American whiskey category. This category includes bourbon, rye and Tennessee whiskeys and has been expanding at more than a 4.5% compound annual rate over the past five years.
“Our expertise and capabilities have already allowed us to begin to reap rewards from the growth of that category, and we see additional potential.
“Our ingredients solutions segment is seeing similar opportunities from the high fiber, high protein and non-GMO trends. We intend to focus on those opportunities that will allow us to achieve the highest value from our current production facilities.”
Griffin described a second strategy that is a logical extension of the first.
“As we focus our production on higher value products, we will work to develop partnerships to support brand creation and long-term growth,” he said. “In that way, we believe we will be able to realize full value for our operational capacity, quality and commitment.”
MGPI also plans to support its profit growth plans by investing in reliability and risk management, he said.
“We expect capital expenditures largely to focus on improving operational reliability and reducing risk,” he said. “In addition, we also plan to build our aged whiskey inventory. As needed to support our plans, we will add staff and capabilities in sales and marketing, as well as research and development.”
Griffin stressed the five-year strategic plan offers value for all MGPI shareholders.
“Management and the board remain focused on building MGP’s brand across all of our markets and on meeting the company’s commitments to all of the company’s stakeholders, including shareholders, employees, business partners, consumers and our communities,” he said. “Our plan seeks to leverage the positive macro trends we see in the industries where we compete while providing better insulation from outside factors, including swings in commodity pricing. We believe strong profit growth will create a ‘win-win’ for all of our stakeholders, and we look forward to reporting on our progress.”