1、October 2024The Ingredients LandscapeOur Perspectives on Ingredientsuncommon sense3|OC&C Strategy Consultants 20241A Large and Growing Market Robust aggregate market growth in the long term,with the higher-margin value-added subsegments(30-40%market value)growing 5%;some supply normalization occurri

2、ng after rapid growth during COVID With Attractive Structural DynamicsHigh technical or capital requirements to participate;sticky customer relationships,given low share of cost stack,but high criticality(as many ingredients are formulation specified),and economic resiliency result in attractive cat

3、egory fundamentals and high barriers to entryNuanced Subcategory Trends&Growth Hot Spots Subcategories align differently to evolving consumer trends(e.g.,natural,clean label,etc.),resulting in hot spots of growth,while also seeing differing levels of participation from the major scaled players Leadi

4、ng to Differing Archetype Business Models(and Value Creation Levers)This landscape is served by a range of different archetype business models winners in the market typically have specialist knowledge and experience of ingredient applications in specific end markets,with an operating model aligned t

5、o specific value creation leversAll Supporting an Active M&A LandscapeThese factors have supported a fertile space for M&A,with many of the major players actively shaping their portfolios/capabilities;and private equity driving professionalization and consolidation across a still-fragmented landscap

6、e2345Key Themes of the Ingredients Landscape2The Ingredients Landscape_Harris Williams and OCC_2H 20244|OC&C Strategy Consultants 2024The overall market has seen muted,but steady,volume growth value-added segments have grown well above commoditized ingredients2011201220132014201520162017201820192020