WESTCHESTER, ILL. — Executives of Ingredion, Inc. see two trends continuing in 2019: a decline in demand for full-calorie sweeteners and rising sales for the company’s specialty ingredients.

The Westchester-based company on Feb. 5 posted fiscal year 2018 net income of $454 million, or $6.25 per share on the common stock, which was down 15% from $532 million, or $7.21 per share, in fiscal year 2017. Net sales of $5,841 million were up slightly from $5,832 million in fiscal 2017 as changes in foreign currency exchange rates offset favorable price/mix.

“Our specialty portfolio grew to 29% of total net sales, driven by continued demand for ingredients from our on-trend specialty growth platforms, such as clean and simple ingredients, sugar reduction, and specialty sweeteners and specialty texturizers,” said James P. Zallie, president and chief executive officer, in a Feb. 5 earnings call.

In North America, operating income dropped 17% to $545 million from $654 million. Lower sweetener demand in the United States and Canada drove the decrease along with high production and supply chain costs and commodity margin pressures. Net sales in North America slipped 1% to $3,511 million from $3,529 million.

Mr. Zallie said the rate of declining demand for high-fructose corn syrup sped up in 2018 when compared to previous years. Demand for other sweeteners is declining, too.

“I think also sugar itself is being formulated out of many products, but it’s consumer preferences, really, that I think are driving a lot of that demand — the move toward smaller can sizes, I guess, for full-calorie products from a standpoint of caloric intake, and just a lot of the consumer trends that are driving government behavior, etc.,” he said.

Ingredion in 2018 transitioned a corn wet milling plant in Stockton, Calif., into a shipping distribution station, which was associated with $49 million of restructuring charges in the fiscal year. Ingredion shed probably less than 20% of the volume produced at that facility and moved the rest of the volume to other plants within the company’s network, Mr. Zallie said.

“We successfully retained our West coast customers, having reduced our U.S. high-fructose corn syrup manufacturing footprint with the cessation of operations at our Stockton plant,” he said.

Ingredion made moves in specialty ingredients in 2018. The company announced plans to invest $140 million into producing protein isolates from peas and a range of pulse-based flours and concentrates. The investment covers two North American facilities: one in South Sioux City, Neb., and the other in Saskatchewan.

Outside North America, operating incomes rose in two other geographic areas.

Operating income in South America increased 22% to $99 million from $81 million. Improved operational efficiencies and the lapping of the 2017 Argentina manufacturing operations more than offset foreign exchange headwinds in Brazil and Argentina. Net sales in South America fell 6% to $943 million from $1,007 million.

In Europe, Middle East and Africa, operating income increased 2% to $116 million from $114 million. Specialty and core volume growth along with improved price/mix drove the increase. Net sales increased 5% to $584 million from $556 million.

James D. Gray, executive vice-president and chief financial officer, addressed Brexit, a breakup between Great Britain and the European Union. If a “hard” Brexit with no resolution occurs, Ingredion would need to employ two tactics. The company first would need to have inventory in place to keep customers from facing immediate outages.

“And then second, we have to deal with whatever the imposed tariff levels would be, and at some point, whether or not immediate or over a course of one year to 1.5 years, those tariffs are going to play a role in increased cost of manufacture, and eventually those will play through to a consumer at a (retail store) or a restaurant,” he said. “And that should actually create a bit of a headwind in terms of some volume decrease.”

In Asia-Pacific, operating income fell 10% to $104 million from $115 million, A lag in the pass through of higher tapioca costs more than offset specialty volume growth. Net sales increased 9% to $803 million from $740 million.

Ingredion companywide in the fourth quarter posted net income of $97 million, or $1.38 per share on the common stock, which was down 6% from $103 million, or $1.37 per share, in the previous year’s fourth quarter. Net sales of $1,426 million were down 1% from $1,437 million. Ingredion in 2019 expects adjusted e.p.s. to be in the range of $6.80 to $7.50, which would compare to adjusted e.p.s. of $6.92 in 2018.