イングレディオン（INGR）2026年度第3四半期決算説明会：Argoコストが重荷となり見通し引き下げ

要点

• イングレディオンが発表した2026年度第3四半期の純売上高は18億ドルとなり、前年同期比で1%減少したものの、パキスタン事業の売却影響を除くと2%増となった。
• 調整後営業利益は19%減の2億600万ドルに減少した。主にアルゴ工場における製造コストの上昇、米国・カナダでの販売数量の落ち込み、記録的なタピオカコスト、およびメキシコペソ高による取引上の影響が響いた。
• テクスチャー＆ヘルスフル・ソリューションズ事業は10四半期連続の販売数量増を達成し、数量は2%増となった。クリーンラベル・ソリューションズの売上高は年初来で8%増となった。
• 食品・産業用原材料（米国・カナダ）部門の営業利益は36%減の5,200万ドルに減少した。アルゴ工場の生産は2四半期連続で安定したものの、修繕維持費の高止まり、基準を下回る歩留まり、軟調な需要により財務面の回復が遅れた。
• 経営陣は2026年通期の業績見通しを引き下げ、調整後EPSを9.25〜9.70ドル、純売上高を横ばい、調整後営業利益を10%台半ばの減少と予想した。
• イングレディオンは規制当局および独占禁止法関連の承認を前提として、テイト＆ライルの買収完了時期につき引き続き2027年後半を目指している。

主要財務データ

イングレディオンは当第3四半期累計（9カ月間）で1億5,800万ドルの配当を支払い、8,500万ドルの自社株買いを実施した。四半期配当は1株当たり0.83ドルに引き上げられ、12年連続の増配となった。

事業および業績動向

テクスチャー＆ヘルスフル・ソリューションズ

同部門の販売数量は2%増加し、連続増加記録を10四半期に伸ばした。クリーンラベル・ソリューションズが引き続き主な牽引役となり、年初来の売上高は全地域で8%増となった。アジア太平洋地域の売上高は30%超増加し、米国・カナダは四半期売上高として過去2年間で最高を記録した。

収益性は価格／構成比の低下、製造コストの上昇、記録的なタピオカコストにより圧迫された。タピオカでんぷん価格は1月以降でおよそ45%上昇し、イングレディオンのタピオカ調達コストは前年同期比で約65%増加した。経営陣は、価格改定によってこれらのコストは約1四半期の遅れを伴って概ね回収されると述べた。

食品・産業用原材料（中南米）

販売数量は4%増加し、メキシコとブラジルのビール醸造および飲料向け顧客が牽引した。イングレディオンはブラジルで新たな複数年のビール醸造向け供給契約を獲得し、カボ工場の閉鎖を完了して生産を1工場に集約した。

メキシコペソ高に加え、コロンビアでの地震に伴う混乱により営業利益は減少した。イングレディオンのクリ工場は約1週間にわたり操業を停止し、一部の顧客は2〜3週間にわたり納入を受け入れることができなかった。経営陣によると、その後顧客は操業を再開し、受注ペースも回復した。

食品・産業用原材料（米国・カナダ）

飲食料品需要の軟化を受け、販売数量は3%減少した。経営陣は、消費者が購入数量を減らしたり小型包装サイズへとシフトしたりしたことで、清涼飲料水、菓子類、加工食品が軟調に推移したことを挙げた。

アルゴ工場では2四半期連続で生産が安定し、主要なでんぷんおよび甘味料製品の在庫はおおむね回復した。しかし、基準を下回るトウモロコシ抽出歩留まり、修繕維持費の高止まり、ならびに顧客への供給のために他施設を活用したことに伴うコストが引き続き利益を圧迫した。

経営陣は、イングレディオンが顧客シェアと契約スプレッドを維持していると述べた。事業の大半が複数年契約でカバーされているため、販売数量を取り戻すための値下げは行っていない。

テイト＆ライル買収

7月にテイト＆ライルの株主が買収を承認した後、規制当局および独占禁止法関連の審査が続いている。イングレディオンは引き続き2027年後半の買収完了を目指しており、完了に向けた統合計画を進めている。

経営陣は、この統合によりタンパク質強化、糖類低減、テクスチャー、食感、食物繊維強化の各領域にわたる包括的なソリューションを提供する能力が拡大すると見込んでいる。

経営陣による業績見通し

セグメント別のガイダンスは以下の通り：

• テクスチャー＆ヘルスフル・ソリューションズ：純売上高は1桁台前半の増加、営業利益は横ばいから1桁台前半の増加。
• 食品・産業用原材料（中南米）：純売上高は1桁台前半〜半ばの増加、営業利益は1桁台半ば〜後半の減少。
• 食品・産業用原材料（米国・カナダ）：純売上高は1桁台半ばの減少、営業利益は35%〜40%減。
• その他：純売上高は20%〜25%減、営業損失は約1,500万ドル（パキスタン事業の売却による）。

ガイダンスは2026年10月末時点で有効な関税水準を反映している。買収に伴う統合費用や事業再構築費用、および潜在的な減損費用は除外されている。

リスク要因と注視すべきポイント

• 歩留まりが過去の実績値や業界水準を下回る状態が続き、修繕維持費が予算を上回っているため、アルゴ工場の財務面の回復は生産面の回復に遅れをとっている。
• 米国・カナダの飲食料品需要は8月以降、特に甘味料向けで軟化しており、経営陣は第4四半期の販売数量に対して慎重な姿勢を崩していない。
• 記録的なディーゼル価格の上昇が光熱費、運賃、物流コストを押し上げ、タピオカやジャガイモの原材料費もさらなるインフレ圧力となった。
• タイにおける天候不順やキャッサバモザイク病による減産を背景に、タピオカ価格は高止まりしている。価格改定によるコスト回収にはタイムラグが伴う。
• メキシコ事業は米ドル建てである一方、大半の営業費用がペソ建てであるため、メキシコペソ高が取引上の逆風となっている。
• テイト＆ライルの買収完了には、依然として規制当局および独占禁止法関連の承認が必要である。

アナリスト質疑応答の主なポイント

• アルゴ工場の回復：経営陣は、生産の安定と財務改善の遅れを明確に区別した。トウモロコシ抽出歩留まりは10月に数ポイント改善したものの、依然として平年水準を下回っている。工場の信頼性を維持するため、第4四半期も修繕維持費は高水準が続く見通しである。
• 第4四半期の業績レンジ：主な変動要因は、販売数量に対する慎重な見通し、継続するタピオカコストの上昇圧力、およびアルゴ工場における修繕維持費の高止まりである。コロンビア地震からの復旧により、混乱要因の1つは解消される見込みである。
• 価格設定と契約：イングレディオンによると、契約スプレッドは維持されている。物流、運賃、エネルギー関連のコスト上昇分については、通常約70%〜80%が約1四半期以内に回収される。
• タピオカの見通し：タピオカ特有のテクスチャー、食感、すっきりとした風味により、他原料への顕著な代替は見られていないと経営陣は説明した。前年同期比でのマージンへの逆風は、2026年に比べて2027年には和らぐと見込んでいる。
• 地域別需要：需要の軟調さは米国・カナダに集中している。経営陣によると、欧州、アジア太平洋、新興国市場は比較的堅調に推移しており、中南米の販売数量は4%増加した。
• コスト適正化：イングレディオンは工場のさらなる集約機会を特定しているものの、テイト＆ライルの生産網から得られる潜在的なメリットと合わせて精査する方針である。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good day, and thank you for standing by. Welcome to the Third Quarter 2026 Ingredion Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Noah Weiss, Vice President, Investor Relations and Corporate Communications. Please go ahead.

Noah Weiss

Good morning, and welcome to Ingredion's Third Quarter 2026 Earnings Call. I'm Noah Weiss, Vice President of Investor Relations. Joining me on today's call are Jim Zallie, our Chairman, President and CEO; and Diego Reynoso, our Executive Vice President and CFO. The press release issued this morning, along with the presentation we will reference during today's call, is available on ingredion.com in the Investors section.

As a reminder, our comments within the presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties and include expectations and assumptions regarding the company's future operations and financial performance. Actual results could differ materially from those estimated in the forward-looking statements, and Ingredion assumes no obligation to update them in the future as or if circumstances change. Additional information concerning factors that could cause actual results to differ materially from these discussed during today's conference call or in this morning's press release can be found in the company's most recently filed annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K.

During this call, we also refer to certain non-GAAP financial measures, including adjusted earnings per share, adjusted operating income and adjusted effective tax rate, which are reconciled to U.S. GAAP measures in Note 2 non-GAAP information included in our press release and in today's presentation appendix. As part of our prepared remarks, we will touch on the announced acquisition of Tate & Lyle and the progress we have made since announcing the transaction. That said, given where we are in the process, we are limited in what we can disclose and cannot speculate on potential outcomes, timing, integration matters or other transaction-related topics beyond information already in the public domain. We appreciate your understanding and ask that questions today be focused on our operating results and outlook.

With that, I will turn the call over to Jim.

James Zallie

Thank you, Noah, and good morning, everyone. Before I discuss the quarter, I'd like to officially welcome our new CFO, Diego Reynoso, who joined us on October 1 after a long career in the food and beverage industry, most recently as CFO of Boston Beer and previously Tyson Foods and Constellation Brands. His integration and transformation experience will be a great asset as we prepare for the Tate & Lyle combination. So welcome, Diego.

Our third quarter results fell short of our expectations. Excluding the sale of our Pakistan business, net sales grew 2%, but profitability came under pressure, driven mainly by higher manufacturing costs at Argo, along with higher net input costs and the impact of a stronger Mexican peso. In Texture and Healthful Solutions and Food and Industrial Ingredients LatAm, demand remained positive with volume growth more than offsetting softer volumes in U.S./Canada. Given the slower-than-expected profit recovery at Argo and a more cautious view on consumer demand, we are lowering our full year outlook. As we review the quarter, I will highlight the actions we are taking to improve profitability and continue to position Ingredion for long-term growth, including our progress toward closing on the Tate & Lyle acquisition.

Turning to the next slide, I'll walk through the net sales volume by segment. Texture and Healthful Solutions delivered its 10th consecutive quarter of net sales volume growth, up 2%. Clean Label Solutions continues to be one of our strongest growth drivers with sales up 8% year-to-date with growth in every region. Asia Pacific grew more than 30% and U.S./Canada delivered its highest revenue quarter in the last 2 years. With a pipeline equal to more than 1/3 of last year's clean label sales and new capacity coming on stream, we see momentum continuing as customers reformulate towards simpler and cleaner labels. Top and bottom line growth was, however, impacted by lower price/mix and by record high tapioca costs. It is worth pointing out, however, that for Texture and Healthful Solutions, we lapped 2025's record quarter 3 for sales and operating income.

In Food and Industrial Ingredients LatAm, volumes grew 4%, led by brewing and beverage customers in Mexico and Brazil. In Mexico, volumes are recovering from last year's softer levels, helped by more favorable weather and stronger consumer spending. In Brazil, we secured a new multiyear brewing agreement and completed the closure of our Cabo facility on schedule, more efficiently consolidating production into one plant. Our regional supply network is also proving to be an advantage as our locally produced ingredients are more competitive than imports during periods of elevated transportation costs. Along with these actions, we continue to shift our mix toward higher-value products that have a better margin structure than the product lines they are replacing.

As you know, there was a major earthquake in Colombia during the quarter, which impacted our operations. We are pleased to say that none of our employees were seriously injured, but many families were impacted. While our Cully plant was offline for approximately a week, many of our customers in the region were unable to take deliveries, which weighed on our volumes. In Food and Industrial Ingredients U.S./Canada, volumes declined 3%. Production at Argo has stabilized and most of our inventories are largely rebuilt. However, demand across food and beverage categories remains soft. Excluding Pakistan, net sales volume across our 3 reporting segments grew approximately 1%.

Turning now to Argo. Operationally, the plant is in a much better place than it was earlier this year. Production has been stable for a second consecutive quarter and inventories of our key sweetener and starch products have largely been rebuilt. However, that progress has not yet flowed through to earnings. Roughly 2/3 of the profit shortfall this quarter was due to higher-than-expected input and operational costs, notably maintenance spend to improve reliability and yields. The remaining shortfall reflects slower-than-expected recovery of customer volumes amid softer food and beverage demand. Our focus is now on increasing customer volumes and normalizing operational spend to improve profitability. Earlier this year, we said it was too early to tell how higher energy prices would affect input costs and consumer demand.

In the third quarter, these effects became clearer as diesel prices reached record levels. In our operations, energy-related inflation raised our costs for utilities, freight and logistics. Non-corn raw materials such as tapioca and potato added further cost pressures, while net corn costs held relatively stable, supported by strong co-product values. We are offsetting the majority of these higher input costs through targeted pricing and enterprise productivity actions. But depending on the geography, there is variability on the time to recover and offset these pressures.

The secondary effects are also now showing up more clearly in consumer behavior. Many of our customers have raised or are planning to raise prices to offset their own higher raw materials, packaging and logistics costs. Consumers, particularly middle and lower-income households in the U.S. and Canada have responded by purchasing fewer units or are trading down to smaller package sizes. This has weighed on volumes in categories such as soft drinks, confectionery and packaged foods, which affects demand for our sweeteners and starches.

Additionally, currency continues to be a challenge. The Mexican peso remains strong against the U.S. dollar, which creates a transactional headwind for our food and industrial ingredients business in LatAm. We're also monitoring recent volatility in other Latin American currencies like the Brazilian real following the election last month. One bright spot seems to be the Argentinian peso, which has stabilized, especially when compared to last year's volatility. Affordability pressures are contributing to reformulation activity across the industry, creating pockets of growth opportunity in categories where Ingredion leads.

As customers look to protect margins and deliver affordability, they're turning to us for solutions that reduce costs without compromising taste, texture or nutrition. That's a key reason Texture and Healthful Solutions volumes continue to grow and why we remain confident in our solutions-led strategy.

Turning to Tate & Lyle. The acquisition continues to progress according to plan. Since Tate & Lyle shareholders approved the transaction in July, we have been working through the regulatory and antitrust reviews in the relevant jurisdictions, and we continue to target the transaction to close in the second half of 2027. In the meantime, our integration planning is underway, enabling us to move quickly once the deal closes.

Turning to the next slide, I want to illustrate why we are so excited about the potential of this combination and what it will mean for our customers. Reformulation is becoming more complex. Health-conscious consumers, affordability pressures and evolving food regulations mean customers must balance taste, texture, nutrition and cost all at once. And increasingly, they want one partner who can help them do that. Take, for example, the imperative to formulate a high-protein shake. The customer wants balanced sweetness, a creamy mouthfeel, consistent taste and texture and higher protein content, all at an affordable cost and with speed to market.

Today, Ingredion can deliver that through our protein fortification, sugar reduction, affordable formulating and preferred texture offerings. Following regulatory clearance, once the transaction closes, Tate & Lyle's capabilities in mouthfeel and fiber fortification together with our protein fortification solutions will allow us to solve the full brief more comprehensively and more quickly as one partner. This is the opportunity in front of us, more integrated, higher-value solutions and the opportunity to partner more closely and co-create with customers.

With that, I'll turn the call over to Diego for the financial review. Diego?

Diego Reynoso

Thank you, Jim, and good morning, everyone. I'm incredibly excited to be here. Having previously been an ingredient customer, I've experienced firsthand the value we create for our customers, and I'm thrilled to now be a part of the team delivering that value. In my first weeks, I spent time with our teams and seeing the value that they bring to our customers. What stands out is the depth of our customer relationships and the passion and strength of our people. I see significant opportunity to build on these strengths, improve performance and unlock additional value for our shareholders.

With that, let's turn to the income statement. Net sales for the third quarter were $1.8 billion, down 1% versus the prior year or up 2% excluding the divestiture of our Pakistan business. Reported and adjusted operating income were $201 million and $206 million, respectively. Adjusted operating income declined 19%, primarily driven by higher manufacturing costs and lower volumes in Food and Industrial Ingredients, U.S./Canada as well as higher tapioca costs and continued transactional impacts from a stronger Mexican peso.

Turning to our third quarter net sales bridge. Excluding our Pakistan divestiture, our net sales were up 2% versus the prior year. Looking at the underlying drivers, higher volume added $21 million as growth in Texture Household Solutions and Food and Industrial Ingredients LatAm more than offset lower volumes in Food and Industrial Ingredients U.S./Canada. Foreign exchange added a $26 million benefit primarily from stronger currencies in Latin America. Price/mix was a modest $6 million headwind as pricing in Food and Industrial Ingredients, U.S./Canada was offset by lower price/mix in LatAm and Textures & Household Solutions.

Moving to the next slide. We highlight net sales drivers by segment for the third quarter. Texture & Household Solutions net sales were up 1%, driven by sales volume growth of 2%, partially offset by lower price/mix. Food and Industrial Ingredients LatAm net sales were up 7%, driven by favorable foreign exchange and higher volumes, partially offset by weaker price/mix. Food and Industrial Ingredients U.S./Canada net sales declined 1%, driven by weaker consumer demand.

Now let's turn to a summary of our results by segment. Texture & Household Solutions net sales were up 1% in the third quarter. Operating income was $95 million, down 10%, driven mostly by higher tapioca and manufacturing costs, along with unfavorable price/mix, partially offset by volume growth and lower operating expenses. The tapioca cost pressures stem from an industry-wide route shortage in Thailand, primarily from adverse weather, which has reduced the tapioca crop to record low output.

The limited route availability drove tapioca starch prices to record highs, up roughly 45% since January, impacting our volumes in APAC. As a result, our tapioca costs were up approximately 65% versus last year. And while we continue to recover these costs through pricing, there is an approximate 1 quarter lag. In Food and Industrial Ingredients LatAm, net sales were up 7%. Operating income decreased 6% to $109 million, driven primarily by Mexico's transactional currency impact and the earthquake in Colombia, which reduced operating income as customers in the Andean region were slow to resume operations. These were partially offset by increased volumes as well as initial savings from the consolidation of our Brazil production network in June.

Moving to Food and Industrial Ingredients U.S./Canada. Third quarter net sales were down 1% Operating income was down $52 million. The operating income was $52 million or down 36%, impacted by higher manufacturing expenses at our Argo facility as well as volume declines, partially offset by better co-product recovery at Argo. All other net sales were $54 million, flat, excluding Pakistan. The operating loss increased $7 million, primarily reflecting the impact of the sale of our Pakistan business.

Turning to our third quarter earnings bridge. The top half of the slide reconciles reported to adjusted diluted EPS and the bottom half walks through the drivers of the year-over-year change. Adjusted diluted EPS declined $0.47 compared to the prior year, primarily driven by $0.72 of margin impacts and higher financing costs of $0.03. These headwinds were partially offset by higher volumes of $0.05 per share, favorable foreign exchange impacts of $0.04 per share, other income benefits of $0.09 per share and $0.07 per share of nonoperating benefits, including $0.06 from share repurchases.

Shifting to our year-end income statement highlights. Net sales for the first 9 months were approximately $5.4 billion, a decline of 1% versus the prior year. Reported and adjusted operating income were $592 million and $676 million, a decrease of 26% and 16%, respectively. Turning to our year-to-date earnings bridge. The result is a decrease of $1.15 per share. Operationally, we saw a decrease of $1.39 per share for the first 9 months, driven by a margin decrease of $1.76 per share, partially offset by foreign exchange and other income of $0.17 and $0.26 per share, respectively. Moving to the change in nonoperational items. We had an increase of $0.24 per share, primarily driven by fewer shares outstanding of $0.19 per share.

Turning to cash flow and capital allocation. Year-to-date cash from operations was $389 million, down from the last year, primarily due to lower net income. Capital expenditures were $313 million, partially offset by $36 million of proceeds from the sale of certain properties in the year. During the first 9 months, we continued to return cash to shareholders. In the third quarter, we increased our quarterly dividend to $0.83 per share, which marks the 12th consecutive year of dividend increases. Year-to-date, we have paid $158 million in dividends and repurchased $85 million of shares. This underscores our commitment to balanced capital allocation and long-term shareholder value creation.

Now let me turn to our 2026 outlook. We are updating our full year 2026 outlook as follows: for the full year 2026, we anticipate net sales to be flat, adjusted operating income to be down mid-teens, reflecting the operational challenges in Food and Industrial Ingredients U.S./Canada. We expect full year adjusted EPS to be in the range of $9.25 to $9.70. This guidance assumes diluted shares outstanding of 63.5 million to 64 million, which includes completion of our planned $100 million of share repurchases this year.

We anticipate that our 2026 cash from operations will now be in the range of $650 million to $750 million, with the decrease stemming from the slow recovery in Food and Industrial Ingredients U.S./Canada. Capital expenditures for the full year are still anticipated to be between $450 million to $490 million. Please note that our guidance reflects current tariff levels in effect at the end of October 2026. In addition, this guidance excludes any acquisition-related integration and restructuring costs as well as any potential impairment costs.

Turning to our updated full year outlook by segment. For Textures and Household Solutions, we now expect net sales to be up low single digits and operating income to now be flat to up low single digits, driven by higher volumes, offset by inflationary pressures. For Food and Industrial Ingredients LatAm, net sales are now estimated to be up low to mid-single digits and operating income is now expected to be down mid- to high single digits, reflecting transactional foreign currency, lower-than-expected consumer demand in Mexico and the impact of the earthquake in Colombia. As a reminder, our Mexico business is U.S. dollar-denominated, but most of our operating expenses are in pesos.

For Food and Industrial Ingredients U.S./Canada, we expect net sales to now be down mid-single digits and operating income to now be down 35% to 40%, driven by Argos' operational headwinds. All other net sales is expected to be down 20% to 25%, and its operating loss is still anticipated to be approximately $15 million after the sale of our majority stake in the Pakistan business.

That concludes my comments, and I'll turn it back over to Jim.

James Zallie

Thank you, Diego. As we conclude today's call, I want to emphasize the priorities that will guide us through the remainder of this year and into next. First and foremost, we are focused on lowering costs at Argo and rebuilding customer volumes in Food and Industrial Ingredients U.S./Canada. We will continue to build on a solid foundation in Texture and Healthful Solutions, which continues to grow volume. We are also taking action to offset inflation through pricing and multiple enterprise productivity initiatives. We remain committed to optimizing our capital allocation, and we expect to complete our $100 million of share repurchases by year-end.

Lastly, while our teams remain laser-focused on operational execution and growth, our integration team will continue to advance planning in preparation for day 1 readiness of our acquisition of Tate & Lyle. We are building the foundation for an even stronger company with greater opportunities for growth, innovation and shareholder value creation in 2027 and beyond.

With that, let's open the call now for questions.

Operator

[Operator Instructions] Our first question comes from Ben Theurer with Barclays.

質疑応答

Benjamin Theurer

Welcome Diego. So the very first one, I really wanted to dig a little bit deeper into the cost things and the issues that you just continue to face at Argo. And you had some detail already in the presentation, but maybe just digging a little bit deeper as to where we are in terms of stabilization of production lines and what are like kind of like the cost pressure. So what would you say is just temporary still you need to work through? What would be more structural issues that you're facing? So just so we understand a little bit what the impact is maybe beyond 2026 as it relates to Argo in specific? And then I have a quick follow-up.

James Zallie

Yes. Thank you, Ben. So I think, first of all, the important distinction that we want to make around Argo is -- and it's going to seem somewhat counterintuitive, but production recovery and financial recovery are at different stages. And we thought we would be -- that would be more aligned by now. Production was stable for the second consecutive quarter and inventories, again, of our starches and sweeteners are largely rebuilt.

There are really 3 areas that are impacting us. First is operating efficiency. So given the fact that the plant has struggled for certainly about 4 quarters, yields remain below where we would like them to be. So the yields from the corn extraction. So we are below historical rates and I would say, industry rates. And with that, once we get that incrementally improved, and we did see a couple of percent increase thus far in October month, for example. And when you grind as much corn as we do at a large factory like that, a lot of that can drop to the bottom line, obviously, because you have incremental waste when your yield is lower. So that's taking us longer to get back to, say, a normalized rate on yields. That's one thing.

The other thing is the plant with the best of intentions to increase maintenance spend to get ahead of issues where we were behind on issues, say, with mechanical stores and much of that, which is expensed, our maintenance spend has gotten a little bit ahead of where we had budgeted. So those 2 issues, primarily, it's a spend issue and a yield issue related to those 2 factors. I can tell you, one of the first things that Diego has done is work very closely with his ops finance team with the plant leadership team. And I was just out there this week, and I can assure you that is as tight as it's ever been and the KPIs are all in place to make incremental improvements, but it's just taking longer.

From a standpoint of the availability of product to service customers, that is all there. And the team has done a great job through this process of maintaining relationships with customers. As we've talked about before, the other thing that we've done is we've leveraged the rest of our U.S. network to supply customers, but that came and has come at an incremental cost, which puts a priority on servicing customers, but an incremental cost. And our Net Promoter Scores and Perfect Order scores didn't drop meaningfully during this period. So it's not a loss of share.

But at the same time, starting in August, what we saw post the August earnings call, starting in the month of August, volumes have softened. And we did see that, and that continues. And I guess the concerning part is for the month of September, we saw industry data, and it appears that softness is continuing in the early part of quarter 4. And that's the reason why we've tempered the outlook on quarter 4 and how it all kind of relates back to Argo. Hopefully, that's helpful.

Benjamin Theurer

Yes. That's helpful. And then just actually picking up on that. I mean, obviously, there's a lot of moving pieces as we think about the fourth quarter, and you still have like for that quarter, a relatively wide range. So as it relates to some of these issues you've just talked through on Argo, but then others that you've highlighted such as the transactional impact of the Mexican peso that might be a little bit less. How about the tapioca cost pressure? So how to think about like these other factors?

And then help us maybe frame a little bit what are the opportunities to maybe get to the higher end of the implied 4Q guidance versus the risks towards the lower end of the 4Q implied guidance?

James Zallie

Yes. I think -- I'll make some comments, and then I'll ask Diego to complement what I'm going to say. I think that with what we have really better visibility on now in relationship to U.S., Canada, Food and Industrial Ingredients and the Argo path towards its recovery, we feel that we put through prudent guidance, especially related to the market softness, especially in sweeteners, in sweeteners predominantly. The tapioca cost pressure will continue. We had hoped that typically in September, October, when the crop comes in, tapioca prices typically, when they're at these record levels or very high levels, they typically drop.

And what we've talked about is we then benefit from the sticky down on prices, whereas on the rapid rise, we get squeezed from a margin standpoint. The tapioca prices are forecasted to come down modestly. They are coming down very slightly, but they're staying very elevated. So we don't see that providing much of a benefit. And we hedge for the most part, the Mexican peso. So that continues. We won't have, obviously, the repeat. The Andean facility is running better and is overcoming the Colombia earthquake.

Diego, do you want to add anything else just in relationship to, say, Q4 guidance and the outlook for Q4.

Diego Reynoso

Of course, Jim, thank you. I think as you say, the biggest piece to your question on the range of the guidance is we're being a lot more cautious, especially towards the volumes in the current market conditions. I mean, as you know, even this week with the elections and the inflation you've seen up and down over the last -- especially on energy over the last few months, there is a lot of volatility out there. So we're being a little bit more cautious with our forecast from that point of view.

As we mentioned before on our costs, we pass our cost to our customers, but there's usually about a quarter lag for some of the costs, especially the tapioca costs. And that piece, we continue to see a challenge in Q4, so we're making that adjustment as well.

And then the third piece to build on the comment that Jim made about maintenance spend, ahead of where it should be, for example, in the quarter or next year, is we're assuming that we will continue that spend into Q4 to ensure reliability, not just for this year, but for the years coming forward. If you put those 3 things together, we think we're being cautious but correct in our guidance range for Q4.

Operator

Our next question comes from Kristen Owen with Oppenheimer.

Kristen Owen

I wanted to start just maybe as a follow-up to the fourth quarter guidance. Just how we should think about price cost in U.S. can F&I here in the fourth quarter and then heading into 2027. I'm just thinking about all the crosswinds between pricing concessions to recover Argo volume against pretty volatile corn backdrop, higher energy transportation costs. And then maybe the same question for TNH, just understanding you can't hedge that tapioca exposure, but I guess I'm just a bit surprised at the lag in price response. So let's call it a general price cost question.

James Zallie

I would say that for well, let me take tapioca first. Tapioca, what we have said is typically, there is a lag of a quarter to 1.5 quarters to be able to pass through the price increases, and it's been a moving target as tapioca accelerated towards quarter 2, quarter 3, and it's now remaining high. We are getting the price increases through, and that will converge and then tapioca prices right now are softening. So we're kind of reaching an equilibrium point as we enter quarter 4. And we hope that tapioca prices stay stable and moderate. So on tapioca, I think that's the way I would describe it.

Corn really was, I would say, volatile in quarter 2, quarter 3, where we saw the run-up to $550. And now though, with yields forecasted, it's been in a little bit more benign outlook. And year-on-year, '27 projections versus the '26 corn crop, we're up only 5%, 10%. So it's not up that significantly. And remember, as it relates to our North America contracts and our European contracts, everything resets and the strength of the business model has the pass-throughs associated with all the variable elements related to energy, freight and other impacts.

The other thing, too, though, is we had talked about previously in relationship to the run-up in oil prices initially before diesel ran up to record heights. We talked about the direct and indirect effects of that flowing through, and we had put together a Middle East response team just related to oil, and we talked about that impact being manageable at, say, $5 million for the full year. With the run-up in diesel, there's additional flow-through. We're passing those price increases through in year. This is all post contracting certainly for 2026. The incremental impact is modest. It's not anything that's that significant.

So I think we're getting the price increases through there. Typically, 70% to 80% of the price increases we get through in about a quarter related to those logistics, freight, energy-related input costs. And I would say that relates to texture and healthful as well. I think, though, the incremental effects of oil prices, diesel prices flowing through to consumers is what we're seeing, and it started in August is volume weakness. And I think that's what we couldn't anticipate back in August, but we are absolutely seeing a weaker consumer-related customer-related volume environment that we believe is manifesting itself because, again, we saw industry data for September and that trend continues. So that hopefully puts it in perspective.

The pricing is actually -- the pricing centers of excellence are working as they should. There is the lag. But I think there's 2 issues that have happened this year that are somewhat extraordinary. The rapid increase in prices that Diego quoted the numbers on tapioca. And of course, we're all living through the run-up from whatever it was $350 to $650 on diesel. And these impacts in year are quite extraordinary and somewhat unprecedented.

Kristen Owen

Okay. But anything specific on Argo pricing as you try to move those volumes?

James Zallie

We're not -- a lot of the volume is contracted. So it's really about really the issue our -- what we call our spread, which is the pricing versus raw material is holding very well. So we're not seeing a spread issue or contribution margin type issue. We're not seeing anything there. A lot of that business is contracted. The issue as it relates to Argo and Food and Industrial Ingredients is, again, operational costs, the yield, the maintenance spend to get the plant to operate as it normally had after having such a rough patch that we've experienced and the softer volume outlook. But again, we feel we've maintained share and our spread contribution margin has held and most of the business is contracted. So we're not having to lower price to win back volume. That's not happening.

Kristen Owen

Okay. That's very clear. And if I may, my follow-up is just on the Andean earthquake. Just where your customer -- how much of your customers' capacity may be back online? Just any sort of update there? I think you talked about your own production facilities, but just how your customers are faring as well.

Diego Reynoso

Yes. The biggest challenge, actually, as we mentioned, was that our customers took a while to ramp back up. They're all back up, but you have to understand there was damage to their facilities, but also to streets and transports and those pieces. So what we're seeing is they're back online, but there was a period of about 2 to 3 weeks where we could produce, but they could not pick up the product, and that's why you're seeing such an impact in the quarter. I will say we had another earthquake last week. Thankfully, that did not have any impact, but we continue to monitor the area.

Operator

Our next question comes from Ben Klieve with StoneX.

Benjamin Klieve

First one is around the tapioca dynamic in APAC. I'm wondering if you can talk a bit about the degree to which you are able, if at all, to identify kind of alternative products that could displace tapioca in this undersupplied environment? Or if it's just such a unique ingredient that there's really no -- that there's not really a viable solution to provide beyond that. And then also the degree to which you can give any insights into the outlook for this into next year. I know you said prices are moderating, but any early read-throughs for '27 on this variable would be great.

James Zallie

Yes. So first of all, Ingredion's tapioca franchise in Thailand is is a very significant franchise and a very good business with solid margins and a great market position. We're a leader in modified tapioca starches, specialty tapioca starches. The historic run-up that we've seen, there's been run-ups in the past, not to this order of magnitude. And part of it does relate to the El Niño impact on the hot-dry climate in Thailand. There's also something that the industry battles every now and then, which is something called Cassava Mosaic disease.

So those 2 issues and the industry is very developed and sophisticated on how it responds to these matters. So it will moderate. It's just taking a little bit longer and our pricing is going through. And what we're not seeing, and this is to address your question, we do not believe we're seeing any material substitutions for tapioca for other raw materials, and that is because the texture of tapioca is very unique and the mouthfeel that it provides in products and a very clean taste is unmatched. And so we're not seeing switch outs.

We're seeing margin compression along this run-up. So customers will look back to what happened during the pandemic when freight rates went to extraordinary heights and they did try to reformulate tapioca, but they went back to tapioca. This time, we're not seeing any material substitutions because actually, even though these price increases have went up, it is actually less of an impact on a delivered basis outside of Thailand to Europe or to the U.S. in comparison to when the pandemic had raised freight rates to such extraordinary levels that it was way more than this increase that we're seeing.

So it's just a moment in time. And I would say that as we look into 2027 related to this specific dynamic, we're not going to see the same degree of headwind or margin compression if anything, we should be stabilized. And hopefully, we'll see some of the benefits of a sticky down, not to the degree we had hoped probably based on where this harvest has come in, which will be with us through September of '27, but it certainly should not have the margin impact that it had year-on-year '26 to '25.

Benjamin Klieve

Very helpful answer, Jim. A follow-up, in the prepared remarks, you talked about the increasing complexity of the reformulation process now given the just increasing number of variables CPG companies are navigating. I'm wondering if you can talk about kind of the evolution of your pipeline for these customers. and kind of how the increasing complexity has extended the sales cycle, especially within texture and Household solutions? And any kind of thoughts there would be interesting.

James Zallie

Yes. I think one of the things that we've done is invested in capability building in relationship to how to engage with customers on these more comprehensive reformulations, investing in things like consumer insights so that we can meet them halfway in relationship to the creation of the brief for the reformulation and the comprehensive nature of it with different targets related to the nutritional content as well as what the texture profile is that they want to hit and training our sales force in that. What that has done is it has led to a significant increase in our new project pipelines with customers.

And again, the dynamics that are driving a lot of this is the fact that out of necessity, consumers are looking for more nutritious products. Everybody is hearing about more nutrition in every bite, caloric density as well as obviously the affordability. So that, along with the dynamic of the increased aggressiveness of private label manufacturers to build out their own offerings as well as branded manufacturers to innovate to compete. Again, it's putting suppliers like ourselves at the center of all of that activity.

And so we've invested in the capabilities and our pipeline has absolutely increased. And that's why we feel confident in the outlook for texture and healthful. We just need to be able to have a machine developed from a go-to-market standpoint and customer engagement standpoint that can meet those customers and accelerate the time from concept to launch. And that's what we're focused on, and that's what we believe also the Tate & Lyle acquisition will certainly help us with, with expanded offerings in that regard.

Diego, do you have any comments because you come from the CPG side as well, and you've seen it up close also with some of this dynamic.

Diego Reynoso

Yes. The way I look at it is we've moved into a situation where CPG companies are dealing with 2 major things. The first one is a consumer that now wants change to the products at a speed that was not required in the past, right? People get sick of new flavors or offerings a lot quicker and the cycle is a lot quicker. And therefore, it requires partners that can quickly come up with new deliveries of feel, product, how the -- to the example of the shake, like how do you provide a more nutrition shake or where things are moving, for example, now that we're moving to protein through some of the GLP-1 piece.

And then the second piece right now is affability I think every company is looking for formulation that makes the product better, but yet at the same time, allows it to be less expensive so that the pricing to the consumer doesn't have to be as high as it has been for the last couple of years. And I think we are uniquely positioned, especially with the potential acquisition to help our customers deal with both of those challenges.

Operator

Our next question comes from Pooran Sharma with Stephens.

Pooran Sharma

I think I've gotten a little bit of a sense to potential contracting season. You mentioned you're maintaining contractual spreads, haven't needed to make pricing concessions to retain customers. But just given the softness in sweetener demand since August, as you noted, just wanted to see if there's any changes in customer behavior during the current contracting season. And as we look into 2027, does that -- should we expect a more challenging pricing environment? Or are you still seeing opportunities to maintain spreads despite this weaker demand environment?

James Zallie

Yes. I would say for the Food and Industrial Ingredients U.S./Canada business, I'll distinguish that from the Texture and Healthful Solutions businesses in the U.S. and Europe and certainly in Asia Pacific. The -- again, U.S./Canada F&II business, the majority of that business is multiyear contract with some very large customers, for example. And yes, there are some annualized contracts, and we are through contracting season. And everything is going according to what is normal. Now what's also happening is, at the same time, you have input costs, which are rising for everyone. So you have the run-up in energy-related prices.

Those flow through to packaging and chemicals, for example. So everybody is absorbing that. And we are passing those price increases through. And I think that, that's all pretty well understood in relationship to the necessity to do that. But again, in that business, we have spreads that are holding, and we are looking to pass through inflationary increases. And it's early yet still in contracting, but that's how I would characterize that business.

Similarly, we're passing through inflationary increases on the texture and healthful ingredients side. contracting there is progressing as per normal because the corn has really settled into not being a big swing item in a very volatile way. That volatility kind of settled out after quarter 3 and kind of where we're at right now. And the year-on-year increase right now is not that significant. So I would say that contracting is progressing as per normal.

What I do think is helpful to mention, though, is really, it's too early to quantify anything about 2027. And of course, we'll give more detail with the full year outlook in February. But I do think it's really worth taking a step back and reflecting on the fact that this particular year, 2026, there were notable tens of millions of dollars of notable onetime headwinds that we've absorbed. And amongst those, one of the largest was the Mexican peso. And since then, the Mexican peso has weakened. And again, we have a hedging policy where we do hedge at these times of years for the forward year. So that's one thing that impacted us significantly.

The Mexican peso alone was tens of millions of dollars alone. Argo reliability challenges, which you all know about and has been painful, and we are absolutely seeing early signs of the improvements in yields, and we will get control of the maintenance spend. The other is the rapidly unprecedented rapid acceleration in tapioca costs, and I think I've addressed that as to the year-on-year outlook there. The other, of course, a handful of millions of dollars with the Colombian earthquake.

So -- and then, of course, you have the in-year run-up in diesel prices, which again, has been at such a level. And the other thing, too, again, we didn't talk about it that we're thinking may be having some sort of an impact on the volume outlook that we started to see in mainly sweeteners, mainly starting in August are the SNAP benefit cuts. And perhaps with the election, there may be some elements there that give some relief in 2027.

So I think it's just helpful to put some of the magnitude of the tens of millions of dollars we've absorbed in 2026 and why it's really early to judge what '27 is going to look like because we're in the middle of contracting, we are passing through price increases. lot of the F&II business is multiyear contracted. And hopefully, that gives a good picture of how we're thinking about not trying to prejudge '27 in any way related to some of the anomalies we've experienced, we believe, and some of the things that are within our own control that we're determined to improve upon for '27 versus '26.

Pooran Sharma

I appreciate the detail there, Jim, and thanks for framing that up. And I'm sorry to press on '27. But I'm just thinking about TNH now and you've previously highlighted longer-term growth algorithm of high single digit, low double digit in TNH texture EBIT. And just thinking of the near-term headwinds and maybe we're seeing some relief in tapioca pricing. I was just wondering if you think we can get back to algo growth maybe by the second half of next year?

Diego Reynoso

Again, I think to your point, we do have an algorithm that will get us there. And we believe that is very achievable. Even this quarter, I mean, we could have been better had it not been for some of the tapioca challenges because that also held back a little bit of our volume. So -- and we were lapping a record quarter last year, and we still grew, right? So I think all the elements are still there that the growth is there. Clean label is doing really well. The solutions piece is doing really well. So I think the algorithm doesn't change. And 2027 so for 2027, I mean, we're working on it right now, and we're going to be coming back in the next quarter to give you insights.

Operator

Our next question comes from Andrew Strelzik with BMO.

Andrew Strelzik

You mentioned the plant consolidation in Brazil. And I was curious if there's other opportunities, whether it's across your plant network or other internal. I mean, you guys have done a great job on cost savings over time. Is there anything else that you're looking at within your network or within your operations where you see the opportunity to move the needle from a cost perspective outside of what you've already discussed at Argo?

James Zallie

Yes. I think -- thank you for acknowledging. I mean, as you know, we have, over the time, reduced our customer our plant footprint through consolidations. Last year, it was Al Conterra this year in Brazil and this year, Cabo facility, and we're getting benefits of that. We have identified a couple of other locations that we have targeted for consolidation. However, we are wanting to wait until we understand the benefits of the Tate & Lyle network and as we look at how we can best optimize our networks and product flows to both service customers as well as supply product cost efficiently. So -- but yes, we have other opportunities, but we also are excited about the prospects once the 2 networks come together.

Andrew Strelzik

Okay. Okay. That makes sense. And then on the demand side, I was hoping you could just give a little more texture across your end markets. I know you said that it was mostly on the sweetener side. But maybe if you could just talk about where you've seen the biggest step down, maybe areas where you've seen a little bit more resiliency, that would be helpful as well.

James Zallie

The biggest challenge right now is in U.S., Canada, I would say. And that, we believe, is related to all the factors that we talked about previously, and that's where we see the biggest impact. Europe, believe it or not, has held up reasonably well. And Asia Pac is holding up reasonably well. Emerging markets is -- are holding up well. And honestly, we were very encouraged in LatAm with the beverage and brewing volumes. LatAm grew volume 4% in the quarter.

So we're very pleased with that. And if it wasn't for the Columbia earthquake, again, which has normalized. And by the way, order patterns have come back very strong to fill pipelines, obviously, when the industry went down as much as it is. So it's really U.S., Canada is how I would circle the globe on this, where the softness is.

Operator

This concludes the question-and-answer session. I would now like to turn it back to Jim Zallie for closing remarks.

James Zallie

Okay. Well, I want to thank everyone for joining us this morning. We look forward to seeing many of you at our upcoming investor events with the next significant engagement being the Stephens Conference on November 17 in Nashville. And at this time, I want to thank you all for your continued interest in Ingredion.

Operator

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.