While IFF stands as a global leader in the flavoring industry, it is wise for the company to concentrate on its strategic focus. IFF itself has experienced significant transformation through various acquisitions. Last year, it acquired Israel-based Frutarom Industries—a leader in natural flavors and ingredients—for $7.1 billion. The previous year, IFF purchased Columbia Phytotechnology, also known as PowderPure, for an undisclosed sum. In 2017, the company launched Tastepoint by IFF as a result of two earlier acquisitions: David Michael & Co., acquired in 2016, and Ottens Flavors, acquired in 2015. These strategic moves have expanded IFF’s capabilities and positioned it as an even larger entity.
According to a recent presentation during the company’s Investor Day, IFF climbed from the fourth to the second position globally in flavors and fragrances from 2017 to 2018, achieving sales of $5.1 billion last year. The company now serves approximately 39,000 customers, with sales increasing by around 20%, and its workforce nearly doubled from 7,000 to over 13,000. The acquisition of Frutarom served as a pivotal factor in this extensive transformation.
With a growing consumer preference for natural colors, flavors, and scents in food and beverages, IFF is well-positioned for expansion. As it restructures to emphasize the three types of ingredients that customers desire, the company has ample opportunities to demonstrate these synergies. At the large IFF booth during IFT19 earlier this month, these synergies were prominently displayed. Tastepoint, PowderPure, and Frutarom each had dedicated sections showcasing samples, with nearly every item incorporating ingredients and technologies from IFF’s various divisions. For instance, pea protein meatballs featured flavor maskers developed by IFF to address off-flavors, complemented by a berbere sauce flavored by Tastepoint.
Eduardo Villagomez, IFF’s new director of global vanilla products, who led the Tastepoint team at IFT, remarked to Food Dive that these changes have positioned the company for better growth and provided a broader range of choices for its customers. “We still have all that creativity,” Villagomez noted. “We continue to work across all applications and products, but now we also leverage the technology that IFF brings. In the past, as separate entities, we might not have had access to all these resources. Now, we have more tools to offer our customers.”
These acquisitions not only enhance IFF’s toolbox but have also yielded substantial financial rewards. According to IFF’s latest earnings report, the company achieved record quarterly sales of approximately $1.3 billion, marking a 39% increase compared to the first quarter of last year.
Restructuring and refocusing are common strategies among food companies in response to operational changes and objectives. These shifts can be driven by negative developments, such as Campbell Soup appointing a chief operating officer in April 2018 to sharpen its focus on core soup and snacks divisions, as well as to enhance its health and well-being initiatives; however, the company later announced the elimination of that position. On the other hand, positive outcomes, like IFF’s recent achievements and Greek yogurt maker Chobani’s decision to merge sales and marketing into a more consumer-focused “demand” category, can also motivate restructuring.
This rebranding initiative could enable IFF to advance, transform its business model, and foster greater innovation. As consumers increasingly seek new and exotic flavors, along with more natural alternatives in their food and beverages, companies like IFF are ideally situated to provide these options. A new structure could better equip IFF to achieve exponential growth and close the gap with the world’s top flavor and fragrance companies, while also exploring opportunities in sectors like Citracal calcium stores to diversify its offerings even further.