November 6, 2018

In a move to reinforce its pioneering role and further expansion plans in the U.S., Symrise AG has opened a high-quality, natural food ingredients facility in Georgia, and launched a Code of Nature taste platform. The company invested 50 million euros (US$57 million) in the site.

Symrise, headquartered in Holzminden, Germany, is the fourth largest flavor and fragrance company in the world, with over 6,000 customers in more than 160 countries. It realizes its 2.9 billion euros (US$3.3 billion) in annual sales (2016) from manufacturers of cosmetics and perfumes, food, and pharmaceutical goods, as well as producers of nutritional supplements, pet food, and baby food.

The new facility, which is located in Banks County, near Atlanta, Georgia, will manufacture products for the business units Food Ingredients, Symrise Flavor, and Pet Food. The company plans to successively expand the site until 2020.

“This advantageous location in the U.S.’s well-developed agricultural South-East enables us to strategically grow on the market for natural and sustainable food ingredients. With the new site in Georgia, we show that we consistently implement our investment program. For example, only a couple of weeks ago, also in the US, we have opened a plant for cosmetic ingredients in Charleston, South Carolina. The expansion of our capacities is and continues to be an important growth factor. We are strengthening our competitiveness for the traditionally largest market in our industry. In addition, we are strategically developing our backward integration focusing on agriculturally produced raw materials. By working closely with our farmers, we are ensuring high product quality and deliverability,” says Dr. Heinz-Jürgen Bertram, CEO of Symrise AG.

Honoring the Code of Nature

To address consumer demand for low-processed foods and beverages, Symrise also has launched a Code of Nature to offer taste solution platforms to food and beverage brands that want to meet the demand for more nutritious food while still delivering on flavor.

Only 100 percent natural ingredients from trusted people and places will be used to create Code of Nature solutions. The company uses a rigorous scientific approach to develop these unique, sustainable, and economical products.

“Consumers want the ultimate taste experience. They want it to be ‘more tomatoey,’ or ‘more chickeny.’ They want real food that’s made with the best natural ingredients, that have been carefully sourced and prepared,” said Emmanuel Laroche, vice president of marketing & consumer insights and global marketing leader for Symrise.

Laroche explained that the company transcends existing regulations with its Code of Nature products because they go beyond what is required by regulators in their preparation. He also noted that Symrise’s 1.3 billion euros (US$1.8 billion) purchase of Diana Foods, one of the world’s leading providers of natural extracts from fruits, in 2014 was instrumental in helping to meet the demands for these natural products.

Keeping up with the competition

The global flavors segment has seen its fair share of consolidation and dynamic activity within the past few years as global players position themselves to expand beyond commodities and up the production chain in order to gain a foothold in higher margin businesses. By 2016 the natural and organic flavors industry generated $4.6 billion in revenue, and the industry is expected to continue to see a CAGR of 7.6 percent between 2016 and 2024, according to the report, Natural and Organic Flavors Market: Global Industry Analysis and Forecast, 2016-2024 issued by Persistence Market Research.

While Givaudan dominates the highly-fragmented global food flavor market, in May of this year, one of the largest companies in the sector, International Flavors & Fragrances Inc. (IFF), acquired Israel-based, global flavors giant Frutarom Industries for $US7.1 billion including debt. And in the month prior, Frutarom Ltd. opened a fully-equipped innovation lab in Israel for food tech startups called FoodNxt, which will focus on developing all-natural ingredients for the global food and beverage industry.

In January 2018, Firmenich, the largest privately-owned flavors and fragrances business in the world, acquired New Jersey-based organic and natural flavors business Natural Flavors for an undisclosed amount. Additionally, the company pledged 10 percent of its annual 3.3 billion Swiss Francs turnover to R&D initiatives that advance its sustainability and product offerings.

Before that, the most notable deal in the category happened in July 2014, when U.S.-based Archer Daniels Midland (ADM) beat a field of rival bidders to acquire Wild Flavors, a producer of flavorings for cereals, ice cream, dairy, and confectionery items for $3.1 billion from the U.S.-based private equity firm Kohlberg Kravis Roberts and Dr. Hans-Peter Wild.

-Michelle Pelletier Marshall

Michelle Pelletier Marshall is the managing editor for Global AgInvesting’s quarterly GAI Gazette magazine and a regular contributor to GAI News. She can be reached at mmarshall@globalaginvesting.com.