Atchison, Kansas-based MGP reported a net profit for the quarter ended 13 December of $1.8 million, up from $48,000 the year before when results were knocked by a distillery explosion, but down on the first quarter for 2004.
"One of the most gratifying aspects of our second quarter improvement compared to a year ago is that it resulted from the growth of our speciality ingredients business combined with improved results in our distillery business," said Ladd Seaberg, president and chief executive officer of MGP.
Ingredients companies looking to up margins are increasingly heading into the value-added ingredients domaine and away from commodity ingredients. MGP is no exception, reporting that opportunities for growth have come from the burgeoing fad for the low-carbohydrate Atkins diet - currently with over 30 million American followers - that has upped demand for its speciality wheat protein isolates - Arise - and FiberStar 70, a resistant wheat starch.
"They are attracting a tremendous amount of attention for both their functional and nutritional qualities in creating high-protein, low-carbohydrate products. The popularity of various high-protein, low-carb diets continues to build momentum, which many industry sources believe may not level off for possibly two to three years," said Mike Trautschold, vice president of marketing and sales at MGP.
Sales of the Arise line has more than tripled compared to a year ago, and sales of the new FiberStar 70 resistant wheat starch, launched onto the market in 2003, are already showing strong interest, added Trautschold.
Second quarter sales of Wheatex, MGP's line of textured wheat proteins, have more than doubled on the previous year.
"Demand for Wheatex has grown substantially in the grain-based foods area, which the new $4.5 million expansion at our Kansas City facility will greatly strengthen our ability to serve." The new plant is pitched for completion by September 2004.