RiceBran Technologies refocusing on excipients, other specialty items

By Hank Schultz contact

- Last updated on GMT

©Getty Imges - zhaojiangkang
©Getty Imges - zhaojiangkang

Related tags: excipients, flow agents, Rice bran

RiceBran Technologies says it plans to move more aggressively into speciality markets, including dietary supplement excipients, to help stem losses. The company has stumbled trying to compete as a high volume food ingredient supplier.

RiceBran was founded as NutraCea, and early on concentrated on deriving value-added ingredients from rice bran, which at the time was a mostly neglected stream in the processing of rice.  One of the company’s most important products has been a stabilized rice bran ingredient for equine nutrition, which is still sold under the NutraCea name.

Other specialty items were less successful.  An attempt to market a line of proteins derived from rice bran was less successful and seems not to have moved much beyond the naming stage.  ProRyza brand protein is no longer among the company’s list of ingredients.  The company also listed a rice bran oil at one time.

In recent years the company attempted to increase domestic production capacity by acquiring a mill in Arkansas to place it closer to a main source of raw material.  Arkansas is the biggest rice growing state, with California coming in second.  The company dropped a money losing venture in Brazil​ that was similarly intended to bring it closer to sources of rice supply.

Stepping back from a high volume positioning

The goal was for the increased capacity to make possible a commodity food ingredient play, for which high volumes are necessary to make up for lower margins.  But the company has not been successful in selling as much rice bran fiber, milled rice and other ingredients as needed to make this work.  The plan now is to refocus on higher margin, lower volume ingredients.

In a recent conference call, Peter Bradley, the company’s executive chairman, laid out the new strategy for restructuring the company.  CEO Brett Rystrom left the company in mid 2020.

“Over the past six months, we've successfully implemented what I refer to as Phase 1 of this transition. This required tackling the immediate imperative to improve financial performance and initiating a broader change in our mindset to become the value-added supplier of specialty food ingredients,”​ Bradley said in an earnings conference call.  The call was posted on the site seekingalpha.com.

“Simply put, it's a change of emphasis to margin from volume,”​ he added.

Among the specialty ingredients the company is now advertising are two aimed at the dietary supplement markets as excipients.  One, called RiBalance, is meant to ease the processing of tablets and capsules.  Another, called RiSolubles, is intended as a mouthfeel conditioner in meal replacements and other products.  The company says it can supply organic versions of these and other ingredients.

Trying to stem the red tide

The company said it has trimmed its EBITDA losses to $932,000 in the fourth quarter. That's down from losses of $1.8 million in the third quarter and $2.9 million in the second quarter.  The new specialty strategy, implemented in the third quarter, saw revenue grow 17% in the fourth quarter to $6.8 million from $5.8 million a year ago for a 10% increase for the full year to $26.2 million. 

The company’s shares once traded for more than $15 a share back in 2011.  It’s been mostly downhill since then, with shares trading at 89 cents today after having briefly risen above $1 in February.

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