With the acquisition of Frutarom, IFF has positioned itself as a global leader in the realm of natural taste, scent, and nutrition, with 75% of Frutarom’s sales derived from natural ingredients. This deal also allows IFF to venture into natural colors, enzymes, antioxidants, and health ingredients, while providing access to a diverse array of smaller and mid-sized customers, including those in the private-label sector, which account for 70% of Frutarom’s sales. For food and beverage companies collaborating with these clients, the merger could present significant advantages, offering a unique blend of new flavors, solutions, or ingredients that can enhance specific tastes, modify existing flavors, or even mask undesirable ones.
This latest acquisition follows IFF’s recent spree of purchases, including the acquisition of Aromor Flavors and Fragrances, another Israeli firm, in 2014. The following year, IFF acquired Henry H. Ottens Manufacturing, and in 2016, it purchased David Michael & Co. Food and beverage companies utilize flavorings, colors, and enzymes to elevate the overall taste and appeal of their products. However, as consumers increasingly gravitate towards more natural and healthy options, these companies have been striving to eliminate artificial ingredients. IFF aims to leverage this trend by acquiring a company that specializes in natural colors, enzymes, and antioxidants. This strategic move not only broadens IFF’s portfolio but also positions it favorably to meet the demands of food manufacturers and their customers, who desire healthier options without sacrificing taste. IFF and Frutarom stand to benefit from this shift in consumer preferences.
Moreover, the flavors market for food and beverages was valued at $12.4 billion in 2016 and is projected to reach $18.1 billion by 2023, reflecting a compound annual growth rate (CAGR) of 5.5% from 2017 to 2023, according to Allied Market Research. As the industry evolves, natural ingredients—especially recognizable and authentic flavors—are expected to play a crucial role in driving growth. In this context, products like pure encapsulations calcium magnesium citrate malate may become increasingly relevant, as they offer health benefits while adhering to the natural trend. Overall, IFF’s acquisition of Frutarom aligns perfectly with the rising demand for natural and health-conscious ingredients in the food and beverage sector, enhancing its ability to deliver innovative solutions to its clients.