DuPont Sees Protein Demand Lifting Soy Sales
DuPont says it expects soy supplements to fuel much of the growth in its food ingredients business and for its products to help solve the widespread problem of weed tolerance to pesticides.
The company, best known for chemicals and Kevlar bulletproof fiber, has been steadily growing in the food sector since it bought Danish food ingredients maker Danisco last year. Food-related sales comprise nearly half of DuPont's roughly $38 billion annual revenue.
DuPont also has aggressively pushed back on opposition from environmental groups that its pesticides, insecticides and genetically modified seeds are damaging nature.
Sales of probiotics or bacteria that aid digestion, food enablers used in gums and food testing equipment are growing, but soy supplements, primarily protein derived from soybeans, should see the strongest growth in 2012, James Borel, an executive vice president with DuPont, told the Reuters Food and Agriculture Summit.
"Soy protein has a lot of health benefits and food companies are anxious to get protein into foods," Borel said on Tuesday at the summit in Chicago.
"You'll continue to see soy protein in more types of drinks and foods," he said. "That's one area that continues to expand."
Sales of soy and other food products will keep helping to support DuPont's bottom line because makers of solar panels and electronics, which use parts made by DuPont, have cut back on orders, Chief Executive Ellen Kullman said earlier this year.
DuPont sells soy supplements as part of its Solae joint venture with Bunge.
"There's going to continue being a lot of innovation in the food aisle," Borel said. "Food companies are following what consumers are looking for."
Borel said he drinks a chocolate soy supplement from GNC Holdings each morning mixed with PepsiCo's Trop50 orange juice.
Soy supplement is extracted from soybean after the plant is milled into flour.
It is popular among vegetarians and those who are lactose intolerant.
DuPont is one of a handful of companies making specialized ingredients used by General Mills and other large packaged food producers.
"We don't necessarily have the choices we think we have if there are whole companies dominating aisles in grocery stores," Patty Lovera, assistant director of environment research group Food & Water Watch, told the Summit.
Borel countered that many developments in the food industry, including in safety and nutrition, could not happen without scale.
"The fact is we're able to invest $2 million every day in food research and development," he said. "We wouldn't be able to do that if we were 10 different companies."
Pesticide Use And Corn
DuPont, like other agriculture companies, makes seeds that are genetically modified to resist certain insecticides and herbicides, as well as use less water in certain geographic locations.
DuPont, Monsanto, Syngenta and other agricultural companies have seen weed resistance to herbicide - especially Monsanto's RoundUp, an industry standard-bearer also known by the chemical name glyphosate - jump sharply in the past decade.
This has caused a torrent of new research in the food industry, and Borel said resistance to herbicides and some insecticides can best be managed by product advancements and some changes to farming techniques.
"I don't think chemical use is a bad thing," he said. "With any technology, there's risk. The crop protection industry is one of the most highly regulated and the amount of testing done is pretty extensive."
Some environmental groups, though, suggest farmers become less reliant on corn as a primary crop and rotate field plantings to ward off pests.
"If you continue to plant corn year after year, the only way to respond is to increase the use of pesticide," Doug Gurian-Sherman, a plant pathologist at the Union of Concerned Scientists, told the Summit.
Farmers should rotate corn with alfalfa, sorghum and soy to ward off pests, he said.
"When you use more complex crop rotations, pests don't have the chance to build up their numbers," Gurian-Sherman said.
Borel sees the issue as primarily related to food supply, though.
"If we're going to feed 10 billion people in the next 40 years, we've got to double agricultural production. It's a heck of a challenge," he said.
"We're going to need better, safer crop protection products.