Description of Mgp Ingredients Inc's Business Segments
Distillery Products Segment - We process corn and other grains into food grade
alcohol and distillery co-products, such as distillers feed (commonly called dried
distillers grain in the industry), fuel grade alcohol, and corn oil. We also provide
warehouse services, including barrel put away, barrel storage, and barrel retrieval
services. We have certain contracts with customers to supply distilled products
(or "distillate"), as well as certain contracts with customers to provide
barreling and warehousing services. Contracts with customers may be monthly, annual,
and multi-year with periodic review of pricing. Sales of fuel grade alcohol are
made on the spot market. During 2015, our five largest distillery products customers,
combined, accounted for about 23.3 percent of our consolidated net sales.
Food Grade Alcohol - The majority of our distillery capacities are dedicated to
the production of high quality, high purity food grade alcohol for beverage and
industrial applications.
Food grade alcohol sold for beverage applications consists primarily of premium
bourbon and rye whiskeys, and grain neutral spirits, including vodka and gin.
Our premium bourbon is created by distilling grains, primarily corn. Our whiskey
is made from fermented grain mash, including rye and corn. Our whiskeys are
primarily sold as unaged new distillate, which are then aged by our customers
from two to four years and are sold at various proof concentrations. Grain neutral
spirits are sold in bulk quantities at various proof concentrations. Our gin
is created by redistilling grain neutral spirits together with proprietary customer
formulations of botanicals or botanical oils.
In July 2015, we announced our first retail-distributed brand which was made
available for retail sale in September 2015. The brand, Metzes Select, is a
limited edition Indiana Straight Bourbon Whiskey.
Food-grade industrial alcohol is used as an ingredient in foods (e.g., vinegar
and food flavorings), personal care products (e.g., hair sprays and hand sanitizers),
cleaning solutions, pharmaceuticals, and a variety of other products. We sell
food-grade industrial alcohol in tank truck or rail car quantities direct to
a number of industrial processors.
Distillers Feed and related Co-Products - The bulk alcohol co-products sales
include distillers feed, fuel grade alcohol, and corn oil. Distillers feed is
principally derived from the mash from alcohol processing operations. The mash
is dried and sold primarily to processors of animal feeds as a high protein
additive. We produce fuel grade alcohol as a co-product of our food grade alcohol
business at our distillery in Atchison. We produce corn oil as a value-added
co-product through a corn oil extraction process.
Fuel grade alcohol is sold primarily for blending with gasoline to increase
the octane and oxygen levels of the gasoline. As an octane enhancer, fuel grade
alcohol can serve as a substitute for lead and petroleum-based octane enhancers.
As an oxygenate, fuel grade alcohol has been used in gasoline to meet certain
environmental regulations and laws relating to air quality by reducing carbon
monoxide, hydrocarbon particulates and other toxic emissions generated from
the burning of gasoline.
Warehouse revenue - Customers who purchase unaged barreled whiskey distillate
may, and in most cases do, also enter into separate warehouse service agreements
with us for the storage of product for aging that include services for barrel
put away, barrel storage and barrel retrieval. Revenue from warehousing services
is recognized upon providing the service and/or over the passage of time, as
in the case of storage fees.
Ingredient Solutions Segment - Our ingredient solutions segment consists primarily
of specialty wheat starches, specialty wheat proteins, commodity wheat starch
and commodity wheat protein. Contracts with ingredients customers are generally
price, volume, and term agreements which are fixed for three or six month periods,
with very few agreements of 12 months duration or more. During 2015, our five
largest ingredient solutions customers, combined, accounted for about 11.2 percent
of our consolidated net sales.
Specialty Wheat Starches - Wheat starch constitutes the carbohydrate-bearing
portion of wheat flour. We produce a premium wheat starch powder by extracting
the starch from the starch slurry, substantially free of all impurities and
fibers, and then dry the starch in spray, flash or drum dryers.
A substantial portion of our premium wheat starch is altered during processing
to produce certain unique specialty wheat starches designed for special applications.
We sell our specialty starches on a global basis, primarily to food processors
and distributors.
We market our specialty wheat starches under the trademarks Fibersym® Resistant
Starch series, FiberRite® RW Resistant Starch, Pregel® Instant Starch
series, and Midsol® Cook-up Starch series. They are used primarily for food
applications as an ingredient in a variety of food products to affect their
nutritional profile, appearance, texture, tenderness, taste, palatability, cooking
temperature, stability, viscosity, binding and freeze-thaw characteristics.
Important physical properties contributed by wheat starch include whiteness,
clean flavor, viscosity and texture. For example, our starches are used to improve
the taste and texture of cream puffs, éclairs, puddings, pie fillings,
breading and batters; to improve the size, symmetry and taste of angel food
cakes; to alter the viscosity of soups, sauces and gravies; to improve the freeze-thaw
stability and shelf life of fruit pies and other frozen foods; to improve moisture
retention in microwavable foods; and to add stability and to improve spreadability
in frostings, mixes, glazes and sugar coatings.
Our wheat starches, as a whole, generally compete primarily with corn starch,
which dominates the United States starch market. However, the unique characteristics
of our specialty wheat starches provide a number of advantages over corn and
other starches for certain baking and other end uses.
Specialty Wheat Proteins - We have developed a number of specialty wheat proteins
for food applications. Specialty wheat proteins are derived from vital wheat
gluten through a variety of proprietary processes which change its molecular
structure. Specialty wheat proteins for food applications include products in
the Arise® , Optein®, and Trutex®. Our specialty wheat proteins
generally compete with other ingredients and modified proteins having similar
characteristics, primarily soy proteins and other wheat proteins, with differentiation
being based on factors such as functionality, price and, in the case of food
applications, flavor.
Commodity Wheat Starch - As is the case with value-added wheat starches, our
commodity wheat starch has both food and non-food applications, but such applications
are more limited than those of value-added wheat starches and typically sell
for a lower price in the marketplace. Commodity wheat starch competes primarily
with corn starches, which dominate the marketplace and prices generally track
the fluctuations in the corn starch market.
Commodity Wheat Proteins - Commodity wheat protein, or vital wheat gluten,
is a free-flowing light tan powder which contains approximately 70 to 80 percent
protein. When we process wheat flour to derive starch, we also derive vital
wheat gluten. Vital wheat gluten is added by bakeries and food processors to
baked goods, such as breads, and to pet foods, cereals, processed meats, and
fish and poultry to improve the nutritional content, texture, strength, shape
and volume of the product. The neutral flavor and color of vital wheat gluten
also enhances the flavor and color of certain foods. The cohesiveness and elasticity
of the gluten enables the dough in wheat and other high protein breads to rise
and to support added ingredients, such as whole cracked grains, raisins and
fibers. This allows bakers to make an array of different breads by varying the
gluten content of the dough. Vital wheat gluten is also added to white breads,
hot dog buns, and hamburger buns to improve the strength and cohesiveness of
the product.
Intraday data delayed per exchange requirements. All quotes are in local exchange time. Intraday data delayed 15 minutes for Nasdaq, and other exchanges. Fundamental and financial data for Stocks, Sector, Industry, and Economic Indicators provided by CSIMarket.com
Disclaimer: Information provided by CSIMarket.com is for informational purposes only and does not constitute investment advice, recommendation, or solicitation to buy or sell any security.
98.38 %