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by Ellen PfeiferSuddenly, soy milk seems to be everywhere – lining the shelves at both natural foods groceries and the local supermarket. The labels proudly trumpet its organic origins, the health-promoting properties of isoflavones, and the exclusion of genetically modified products (GMOs).
Fortunately for a company like Stake Technology, which as … umm … staked its future on the exponential growth of natural foods, soymilk and other soy products like edamame, are hot properties. The company (Nasdaq: STKL) is North America’s largest supplier of soy concentrate and the world’s largest supplier of oat fiber.
The Norval, Ontario- based company is a three-pronged operation focused on environmental responsibility and the health and well being of its communities. It recently crowned 22 consecutive quarters of record sales growth with a 78% increase in overall sales and a 98% increase in its natural and organic food segment. The record results were due primarily to surging sales of aseptic packaged soymilk products (juice box containers), sales of bulk grains and specialty beans, and the cost reductions resulting from several important acquisitions in late 2002. Banking on this growth, Stake expects to see a 45% boost in 2003 revenues, up to $175 million.
Soy Foods Take Off
Because of peoples’ concern about the health consequences of pesticides and fertilizers in their foods and their suspicion of GMOs, organic and natural products have become the fastest growing food category in the U.S. Sales reached $34.4 billion in 2002 according to Natural Food Merchandiser’s annual market overview. Soy is growing by 20% a year says Christopher Krueger, an analyst at Miller Johnson Steichen Kinnard.
Not only are individuals attracted by organic purity, but they are enthusiastic about soy’s multiple health benefits as a lactose-free milk alternative, as a low fat protein source, as a contributor to lower risks of cancer and cardiovascular disease, and as an antidote to menopausal symptoms.
Vertical Integration
Founded in 1973 and publicly traded since 1981, Stake started as a technology company. Until 1999, it was primarily involved in manufacturing environmentally benign industrial cleaning abrasives. With the rapid acquisition of eight natural foods companies and the start-up of another in the last four years, it switched its core business, while retaining its commitment to ethical principles.
Stake has three business units: the Food Group, the Environmental Industrial Group and the Steam Explosion Technology Group (which has pioneered a proprietary pulping process to create paper from non-wood products like straw). In FY02, about 80% of Stake’s sales came from the Food Group, about 20% from the Environmental Industrial Group, and less than 1% from the steam explosion side.
Analysts like Krueger bet the food unit will generate 85% of 2003 sales. They predict the company will spin off its two smaller divisions – a theory given credence by the resignation in February of COO and President John Taylor, who had been overseeing the commercialization of the steam explosion unit. The company doesn’t plan on replacing him.
Stake recently changed the name of the company to SunOpta reflecting the importance of its largest divisions, SunRich and Opta Food Ingredients. The trading symbol, STKL, remains the same.
Three divisions of the Food Group form Stake’s vertically integrated operation. The company controls everything from the seeds to the processing and packaging of its foods products.
Sunrich Food Group – The first of Stake’s acquisitions, SunRich specializes in organic grain products from soybeans to corn, soy ingredients, grain sweeteners, flours, meal and oils. It processes soymilk concentrate, soluble fiber products, and natural preservatives. It manufactures aseptic packaging for shelf-stable beverages.
Opta Food Ingredients – The world’s largest supplier of oat fiber, a developer of starch-based texturizers, and manufacturer of stabilizer blends.
Canadian Organic Food Group – Through this division, Stake is developing a distribution network for organic and natural foods in Canada.
Among the positive outlooks for Stake are plans by several other food products companies and restaurants to promote soymilk. For example, Dean Foods, parent company of White Wave (producer of Silk brand soymilk), plans to increase its advertising spending on soymilk and expects to increase sales by 40% this year. Stake manufacturers and packages some of Dean’s soymilk products, including all of its SunSoy brand. And Starbucks Coffee has started selling Silk at 4000 of its cafes.
Frappucinos made with soy and cappucinos featuring a froth of soymilk on top. And its good for you too.
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http://www.staketech.com/
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FROM Winslow Environmental News, a SustainableBusiness.com Content Partner
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