This interview will make you think about food differently, more in depth. Our guest is Tony DeLio. Tony is the SVP and Chief Innovation Officer of Ingredion. Ingredion is a huge global ingredient solutions company that makes sweeteners, starches and unique ingredients from plant sources such as corn, tapioca, rice, sago and potato. They provide solutions and innovate for almost 60 industry sectors across more than 40 countries. They have a market cap of over $9 billion. They’re located in Westchester, IL, just outside of Chicago.
Tony is in charge of innovation across research and development, marketing and business development. I asked Tony onto the show to learn more about how he thinks about creating new food products and technologies. His philosophy and insights into food are refreshing.
Here are some other things we talk about:
-When you sit down for a meal, how do you think about the food in front of you?
-How do you think about innovation? What’s your process to test an idea, and then bring it to market?
-What’s an example of how you tested and improved the taste, feel of a food product?
-How do you know what will appeal to the average consumer? Do you try to predict trends, what will be popular?
David Kruse: Hey everyone. Welcome to another episode of Flyover Labs. This is Dave Kruse from Madison, Wisconsin and today we are lucky enough to have Tony DeLio with us. And Tony is the Senior Vice President and Chief Innovation Officer of Ingredion. And Ingredion, which you may not have heard of is a huge global ingredients solutions company that make sweeteners, starches and other ingredients from plant sources which is corn, tapioca, rice and potatoes and they provide solutions for almost 60 industry sectors across 40 countries and they have a market capital of $8.6 billion, so they are quite huge, and they are located just outside of Chicago actually in Westchester, Illinois. And Tony, he is in charge of innovation across research and development and marketing and business development and he has a penal responsibility over $700 million and a staff of 160 people. So I think Tony keeps pretty busy. So I’m excited to hear more about how he thinks about innovation and how he got to where he is and where he wants to go. So Tony, thanks for joining us today.
Tony DeLio: It’s a pleasure to be here, it’s a pleasure to be here.
David Kruse: So let’s – yes, it would be great to hear a little bit about your background and how you ended up eventually at Ingredion and just to get to know you a little bit better.
Tony DeLio: Sure. Yes, so my background, educationally I’m an engineer, chemical engineer and when I graduated I kind of made it going to more traditional root, petro chemicals or something like that. But the food industry was always very interesting and I ended up being able to apply everything that I learnt from an engineering standpoint into food and I thought that was kind of interesting. So my first, I started out with Nestle, and making instant coffee in pity, and then the bulk of my career was with Mars Incorporated, where I worked across all their products and portfolio of products from their savory snacks to sweet snacks to pet food, ice cream and even some main meal products. You know along the way – I stated in R&D. I kind of got more and more interested in how do you position products? How do you get consumers ultimately to accept the products. And I got frustrated with the marketing people, because I always felt they were never able to communicate the benefits of the products to appropriate consumers. So I kind of migrated into marketing and then into general management. I think it’s a unique – the food industry is just a great things, because we could all relate to it you know, and in the years that I’ve been, 30 plus years I’ve been involved in the food industry, it has just changed so much. If we think about the food that we eat today, where we buy our foods, what we buy, the global influences on what we choose – when I was a kid, we didn’t even know what Mexican food is, right and now it’s everywhere, let alone Thai. Some of the other foods that are you know even coming out of Africa and India and so forth, things you never heard of before. So it’s really fascinating how food evolves. I think the other thing that’s great about the food industry, you learn so much about yourself and culture through food. So it’s just wonderful for me, it’s always been wonderful and exciting to be part of the food business.
David Kruse: Interesting.
Tony DeLio: So, actually the way I stumbled, I stumbled into – actually I was delighted to be joining at that time National Starch, which was another – it was a food ingredient business. That kind of gave me another – so it’s the inlet inside if you will. Then of course I moved from making the consumer products to making the magic, the magical ingredients that make it all possible, and that’s where I’ve been for the last 10 years and National Starch was acquired by Corn Products and changed the name to Ingredion. And as you said in your introduction, we are a global company with operations in the North America, South America, Asia, Europe and even parts of the Middle East. So we really cover the global with our solutions. It is about providing our customers solutions and as I said earlier, it’s a changing dynamic in the world and we always have to come up with better solutions to meet their needs.
David Kruse: Interesting. And you mentioned that working in the food industry, you get to know yourself better. So what do you mean by that, I’m curious?
Tony DeLio: Yes, I think again, my background, from my name is Italian. You get to understand more about the origins of the food and where it came from. Why people made certain food choices? Why we have the foods? They have the spices that they use, what the purpose is? I mean a lot – you know people are realizing that a lot of the spices are used really for preservation of food initially right. Now they’ve obviously become part of a flavor systems that people accept, but they don’t think about, some of these ingredients have functionality that really go back to the perseveration of food or making food safe. And if you really go back to the modern food industry, which I would say you know started probably in the late 1800 or 1900, the food industry would have been taking off as we know it today. It was really about providing safe and affordable food for consumers and ironically we kind of reverting back with the trends today more towards simply and natural foods, but they still have the same challenges; how do you make them safe? How do you make them affordable? So along the way I think we learnt an awful lot about ourselves, our culture and it’s just fascinating. I always found it very fascinating.
David Kruse: Yes I like that, yes. It’s a good way to – I’m from a German ancestry, but never really – we have broths here in Wisconsin, but beyond that I don’t know, like to drove into the food aspect, so that’s a good way to put it. So at Ingredion, what are some of your main priorities? You oversee a lot of people, but how do you know what to focus on and what are some of your goals throughout the year?
Tony DeLio: Sure. Well, you know our strategy is all driven by what we see is the consumer and two fourth as I would say, consumer trends and technology trends. So we are constantly scanning to really understand what those trends are and what consumers are interested in, what our customers are probably interested in and we try to be proactive in providing our customs along with big food companies, but even some of the medium size and smaller food companies with the solutions they need. So the last, I would say in the last five years in particular, this whole move towards natural, clean label, simpler ingredients, people want to know where their food comes from. They want to know the origin of their foods. In some cases you know non-GM, in some cases just knowing that it was a native ingredient or a locally sourced ingredient. So it’s presenting new opportunities and new challenges for us and to think about new ways of providing solutions that meet that need for clean and simple and natural foods, that’s one area.
David Kruse: Yes. Go ahead.
Tony DeLio: I would – No, I was just going to say, the other one is as we know, its an interesting area and its one litter with lots of successes and lots of failures I would say. It’s more failures than successes actually, but the whole nutritional space. I mean in understanding how to make foods more nutritious now. Just the other, there was a big push now by the FDA consultant, talking about sweetness and sugar in foods. We talked about an increasing amount of fiber that we eat. All these things present challenges and opportunities for food companies in being able to provide foods that are convent, that are safe, but also have all these nutritional benefits. You know this linkage now between what we eat and our overall health and I don’t know if you read information about the micro bio, it’s really all the flora that’s in our intestinal tracks and now they are looking into all kinds of diseases and health, and also healthy gut flow providing health benefits. So it’s a very fascinating study. You can control your weight, you can control your blood sugar, you can control – all this is all kind of linked. So it’s really interesting, those two areas are areas of various sources of natural, simply, nutrition. Are key drivers and will continue to be key drivers in our industry, and that’s something that we are very much focused on.
David Kruse: Interesting. So like around the trends do you have a team of people who are looking for these trends and then if you find a trend, kind of you mentioned the healthy trend and the simple, you know how do you start looking into it and how do you execute on it and once you do it, do you go to clients saying, hey this is what we think is coming. Like this is how you should reposition or how does it kind of all work together?
Tony DeLio: Yes, absolutely. Yes, absolutely. We actually are constantly gathering information about trends in all the regions that we work. So we have global network and marketing folks that are linked together and actually formally on an annual basis we will try to king of ladder up and bring here the key trends in Europe or in Asia, in South America, in North America and say identify those trends and then look to see what is relatively for us. I mean you have to bring it back when it’s relevant to the business. So our agree is today, mostly derivatives of carbohydrates, starch and starch derivatives. Now we are moving into other things. We acquired a company called Kerr Concentrates, which are fruit derivatives and so I’ll explain why that makes sense and where we are going in a moment, but we kind of looked at what can we really do? Where we can bring technology? Where can we bring value for our customers, right. And so we will look at those trends, we will validate those trends. As you said, we will go to our customers, we’ll go talk to them about their needs, their challenges and we’ll try to put this all into perspective and then we’ll begin to develop products or technologies, and we do try to very early in a development process also go back out to lead customers that we know and trust and get their input on our prototypes and so forth. So we make sure that we hit the mark, you know. It’s a long development cycle for food products. I mean if you start with food companies, they have to present the trade to the grocery stores and so forth you know, at least a year out. So they have to have their product down the year in advance and then on top of that, then they’ve got to do their development product, and you have to do shelf life testing, which can take another nine months. So you are talking, by the time – when we get involved, and sometimes its three or four years ahead of when they are actually going to bring the product to the market. So it could be quicker too, but I mean a lot of times that’s where we are. So it’s very important as you said that we collaborate along the way with our customs and we’ll partner with them in helping them solve their problems along the way, so that again we also see. So that kind of just gives you an overview of sort of how we generally identify trends, validate them with customers and then as we develop along, check back with them to make sure that we are hitting the mark in terms of you know…
David Kruse: Yes. No, that’s smart. How do you – can you give me an example of how you solve a customer’s problem. I mean there is probably such a huge variety, but if there is one example, like hey a customer makes a yogurt and they want to make it creamier or if they want to make a granola crunchier. Yes, kind of like how do they come to you? Do you go to them and then how do you actually take their problem…
Tony DeLio: A little of both. I mean, a little of both, absolutely, a little of both. So let’s take the Yogurt example, because it’s a very good one. A number of years ago we saw a real opportunity to make texture a differentiator. When you think about foods, our customs are about what’s the new flavor, what the new this – but texture actually, we always thought it was sort of an overlooked product attribute that you can optimize and you can actually increase consumer preference and bring variety and so forth and yogurts as you know has gone to a tremendous array of textures. Just think of Greek yogurt and how much that really changed the yogurt market in the last few years. But this was even before that and we went out and we actually just went out globally and we picked 80 different yogurt products that represented with the universe, literally in this case the universe in texture. And we narrowed it down to 12 products that kind of define this space. And we went out into consumer testing with that and we teased out what were the specific attributes that were important for certain segments of customers. And when you talk about texture, it is complex. It is not like oh! It’s smooth and creamy, but there are elements of smooth and creamy. How much of it coats your mouth? How much of it coats your tongue? How long does it take to clear out of your mouth? How much force do you need initially to get the – cheer to move when you lick it off the spoon or take it off your spoon in your mouth? All those things are perceptions to texture and we quantify that. We quantified with our sensory capabilities. We also quantified many of those attributes using real logy, just measuring using analytical measurements. And from that we are able to actually identity what the ideal texture was for a number of different consumers and we actually built those products, developed those products and we took it to the market and we beat the leading yogurt in the market in preference. And so we took that. Then we took all that information and we went to our customers and said, hey we really can help you develop a product that’s absolutely superior in texture and actually be – help you to win market share. And so that’s the sort of things that we would be proactive. So it’s kind of combining all of our knowledge and along the way by the way in doing that we actually developed a new product. We got a patent for a specific attribute that can only be delivered with this new molecule, our new ingredient I would say that they gave a unique property of, in this case a fat like property. So kind of when you get into the details of it, kind of address one of the issues I talked about in terms of texture. So that’s how we approached it. I think we are very scientific in our approach and I think it does help us with our customs, because we can provide that assurance that robustness and solution by having the science behind and therefore the products and therefore all the solutions that we are providing and then they can feel confident as well that they are getting a solution that’s going to be a winning solution in the market.
David Kruse: Interesting. And you said – you mentioned with the yogurt example that different textures appeal to different kind of demographics or definitely maybe a segment people. I mean does that go under marketing too that maybe the older adults like a certain texture and the kids like another texture. Like would you have almost different product lines.
Tony DeLio: Yes, well so – absolutely, absolutely. In this case we did exactly that. We found in this case it was a preference; it was a geographic preference between the East Coast and West Coast and there was another preference between male and female. I mean you know honestly it comes down to we didn’t have enough data in this particular case to get down to kids, but that we actually tested a lot of products with kids. But I’m sure we would try in other things as well. And you know listen, our customers that are typically the big food companies are very sophisticated with themselves. But I think what we brought to them was which they didn’t know before. We didn’t have an appreciation before that the texture could have this much of an effect and play this much of a role in overall product acceptability and preference.
David Kruse: Interesting, and so if I could…
Tony DeLio: I’ll give…
David Kruse: Go ahead.
Tony DeLio: No, the other example I gave you, that’s a different way of working and this goes for the UK, where you know – I don’t know if you’ve been to the UK recently, but a lot of the meals that they have are chilled, ready to take home, just heat and eat type of products. Companies like Marks & Spencer pioneered this many years ago, but now all the major grocery chains are offering those products and they are very high quality meals. It’s something that I would say was unique initially to the UK and we saw this as an opportunity, because these products typically have a shelf life in a refrigerator of five to seven days and even during that time there are changes that occur and these companies wanted to make it natural and fresh and so forth. So we bought some technology and worked directly with the end customers, the retailers themselves to help them develop their recipes. We brought innovation in terms of solving their problem, but also we brought ideas in terms of flavors and concepts of products. We really became their go to partner in developing products and them what they did in turn was to specify and connect us with their suppliers, so that we would work directly with suppliers to provide them solutions. So again it was bringing that insight, that technology, but also the insight of the market of flavors, of trends and so forth that allowed us to really create value for our customs in the UK. So we do it in a variety of different ways, but it really does, it really does as you said up front, it really starts with an understating of the consumer and consumer trends and then making it relevant for our customers.
David Kruse: Interesting, okay. Well you already, somehow you answered my – the question I was about to ask, so that’s good. You are somehow thinking ahead here of what I’m going to ask, so that’s great. And so I was curious, how do you decide what to work on, because with the yogurt example and it takes a lot of investment in your side. How do you know that was going to be an interesting, instead of another food, because there are so many food products out there. Do you go through different potential projects and score them or how do you think about it kind of coming from a higher level?
Tony DeLio: Yes, so strategically we have made some, what we call strategic bets and we have these platforms, these product platforms that are really customer or consumer focused and we call them spring force. We have one for example around wholesome and natural ingredients and we have another one around sweetness, and then increasingly for an example in that case our focus is around how do we reduce calories? How do we provide the functionality of sugar, without the sugar, because everyone is trying to reduce sugar; so that’s another one. We have one around nutrition and that’s all around some of the stuff I told you before, like the micro bio and digestive health and so forth. So we kind of made a number of these different bets right, and so within that we look at and we have a – we actually map out a five to 10 year strategy in terms of where we think the market is going and what we need to bring to the market. As we said, we tested that with our customers and we do exactly as they score all these products. At any one time we probably as a company have globally probably 120 different new products under development. Within the global – my global group is a smaller set of that, it’s about half of that and in that case it’s really the more longer-term and more difficult challenges. Some of the more tweaks I would say or variations have done more on a regional level. But we score all these products. We rate them on their ability. How long does it take to come to the market? How long is it – how technically challenging it is? How well does it fit with our long term strategy? What’s the sales and value potential? How much capital is invested? So we have – we take all these parameters in to consideration. We generate a score that give us a relative score and honestly, we have to be a little bit ruthless and focus on the projects as you said, that they are going to deliver the most benefit through the company, and its balanced between short, medium and long term products, but ultimately proving the most value for us as a company and also generally for our customs as well. And we have a limit on the total number of projects that we undertake at one time and we rigorously go through that on a regular basis. The idea with all these new products as I was talking about earlier, given the length of time it takes, you got to be a – you got to make decisions that kills things early if they are not going to be successful rather than hanging on. So we say if you’re going to fail at something, fail fast right, so that we can move on to the next level. So we have a pipeline with all these opportunities there.
David Kruse: That makes sense and we are almost out of time here, but what are some innovations that you are most excited about. You mentioned the micro bio which is really an interesting area. Is that one area that you are really excited about or is there another area that you think has a lot of interesting things.
Tony DeLio: Yes, I think – listen, I think this whole thing around nutrition is interesting, its challenging, right. So whether we are talking about we participate with the FDA product. We’ve done a lot of research on called Hi-Maize that actually can reduce your blood sure. Hopefully the FDA will give us a claim, something that can help reduce the risk of diabetes. So we do it and that’s exciting, because that kind of ingredient can actually be incorporated with breads, baked goods with all the kinds of different products that can actually have a positive.
David Kruse: What that made from?
Tony DeLio: It’s actually made from, you know it’s interesting as you say. It’s a combination of technologies. We actually have an active reading program where we develop new varieties of corn. In this case we have a special variety of corn and then we process it in a way with just using heat and moisture in a very special way to actually make it resistant to digestion, and so it acts more like a fiber in your intestinal system and it actually lowers – and we’ve got clinical studies done to show them that it lowers your blood sugar. And you know this is the key for example when people talk about whole grains and so forth; those are more resistant to digest. So it kind of mimics that, but then makes it in a form that could be more readily incorporated into a variety of different foods. So that’s something that could be a game changer in terms of even crop. Other thing that I’m excited about is this whole area of clean and simple ingredients. Again, you know if – I know you got whole foods and that’s probably for somebody in North America the epitomy in terms of natural and everything else, but this is coming across spectrum now, that people are expecting products, inner labels, simpler things. We saw Craft has now just made all their Macaroni and Cheese with natural colors and so this is an area that we are active and we are helping a lot of these companies to reformulate their products to make them at least from the textural standpoint, particularly textual standpoint very clean label and so they can make these sorts of clean. And the last area is this whole area of sugar reduction and I think that’s another one. Again one when it comes down to you know the positive effect of human health. We have Stevia based products that we sell today and we have next generation that are under development. So I think we have tremendous flavor benefits in all of the different products. We are also looking at other ingredients that can play a role in helping to reduce sugar. So those are the three areas I would say as the ones that I am most excited about.
David Kruse: Got you. And the last question and this is more of a personal one. Is if – do you a tip for all the rest of us to think about food in a different way. I’m trying to figure out if you would be an awesome house guest or one that would analyze all the food and understand it more than in depth and critic the food. But yes, do you have a tip for the audience of how you think about food when you are eating it and maybe you don’t think about it in a scientific way, but…
Tony DeLio: No I do. I mean when I – if I have a new food that I haven’t tried before, I try to think about a couple of different things. I try to think about why did they make choice of the ingredients that they did in coming up with this food. Why did they pick the flavors that they did and why did they pick the ingredients they did? Why did they prepare it that way, and what does that tell us about the culture of the company, the country or the history of the country? So it’s fascinating when you think about, you know Indian food I would just pick as an example. I mean it’s one that they use a lot of exotic spices. They have been very clever in making foods that are vegetarian and that are balanced in terms of nutrition and why they make choices between different ingredients. It’s not only they taste good, but they have to provide a complete diet, because they don’t eat meat. And so when you look at a food in that way, it kind of gives us an insight into you know possible interesting ideas for the future. So I constantly look at food that way and I think you can, you look at it from a historical perspective, you look at it from a scientific perspective and it really gives you an insight into why that food exists in the form it does.
David Kruse: Interesting. Yes, it gives a much richer kind of aspect to eating in food in general. I’ll make sure to do that if it’s a…
Tony DeLio: Great.
David Kruse: Especially I got to figure out more of my German heritage, but no, that’s a good advice.
Tony DeLio: There is a lot of German food. I mean Sauerkraut was a way of preserving food, for a long period of time, pickling of food. I mean so why did they do that, because they made – they obviously grew a lot of cabbage and needed to find a way to use in the off season. So all these things have a reason for being.
David Kruse: That’s very true, very true. Well, unfortunately we are out of time, but Tony I definitely really appreciate your time and thoughts. This was fascinating to learn more about food and how to think about food and what you are working on and how you do it. So I really appreciate it.
Tony DeLio: Yes, thank you for the opportunity and I think it’s – you are covering an exciting space and I think its going to be exciting for years to come. So, thanks.
David Kruse: Definitely, definitely. And thanks everyone for listing to another episode of Flyover Labs and we’ll see you next time. Thanks everyone. Thanks Tony.