It has been over a year since IFF announced its intention to acquire the former DuPont division. The leadership teams of both companies have had sufficient time to strategize the merger and identify their new capabilities, which they have been implementing over the past two and a half months as the companies unite. With the release of videos and pro forma figures, IFF is demonstrating to the world the specifics of these plans and capabilities, while also providing tangible evidence of the company’s strength. This information not only showcases the capabilities available to potential clients but also serves as a reintroduction of the newly fortified company to its competitors.
During his presentation at the virtual Consumer Analysts Group of New York conference in February—just weeks after the merger was finalized—IFF Chairman and CEO Andreas Fibig highlighted the necessity for IFF to modernize its capabilities. He noted that the market dynamics have shifted dramatically in recent years, with both small and large players seeking different solutions. “Increasingly, our customers are requesting us to combine ingredients and technologies or develop integrated solutions,” Fibig stated at the conference. “It is crucial for a company like IFF to respond to these demands and effectively meet the needs of both our major and smaller clients.”
A significant aspect of the new company’s strategy is to enhance its research and development efforts. The R&D capabilities are so vital to IFF that the company produced a video to highlight them, even though R&D is not classified as a separate business division. In the presentation, Greg Yep, executive vice president and chief R&D, global integrated solutions, and sustainability officer, emphasized the company’s commitment to R&D—with an annual expenditure of about $620 million—and provided an in-depth overview of its platforms and capabilities.
Food-related components are also crucial for the company’s ongoing success, as outlined by Nourish Division President Kathy Fortmann in her video. She noted that the newly merged segment serves over 43,000 customers, with approximately 40% of the business focused on ingredients, another 40% on food design, and the remainder on flavors. Core categories include beverages, frozen and refrigerated foods, sauces, plant-based proteins, and dehydrated products. Fortmann asserted that the company has now established itself as a leader in many ingredient capabilities within the food and beverage sector.
This information not only highlights IFF’s strengths to customers and competitors but also aims to reassure skeptical investors and analysts regarding the company’s capacity to integrate smoothly. Following the merger with DuPont N&B, activist investor Sachem Head Capital Management reportedly acquired a $1 billion stake in IFF, seeking to compel the company to enhance its financial performance and facilitate a successful integration with the DuPont division.
IFF has faced challenges with past integrations, as evidenced by its discovery in 2019—years after acquiring Frutarom—that certain operations in Russia and Ukraine may have engaged in bribery and kickbacks. Currently, IFF is involved in a federal class action lawsuit with investors concerning this acquisition. Last month, IFF extended an invitation to Sachem Head Managing Partner Scott Ferguson to join its board.
In its commitment to innovation and health, IFF is also focused on developing products that incorporate beneficial compounds such as cissus quadrangularis, calcium citrate malate, and vitamin K2-7 tablets. This focus not only enhances their portfolio but also caters to the growing demand for health-conscious ingredients in the food and beverage industry.