Firmenich, a significant global player in the flavors and fragrances industry, stands to gain considerably from its acquisition of Senomyx and its distribution agreement with Layn. The industry’s trends are increasingly leaning towards clean-label, natural ingredients and more intense flavors, positioning the Swiss company advantageously. The partnership with Layn also strengthens Firmenich’s presence in distributing monk fruit and stevia extracts across international markets, particularly for key Layn customers in China.
A major attraction for Firmenich was Senomyx’s diverse array of sweetener offerings. Last year, Senomyx announced the development of a natural, zero-calorie, high-intensity sweetener named siratose, derived from monk fruit. The company aimed to achieve Generally Recognized As Safe (GRAS) status by 2019 and planned to produce it commercially through fermentation. According to Senomyx, siratose is not only sweeter but also has a superior taste compared to stevia extracts.
It remains uncertain whether Senomyx will continue to create new sweeteners under Firmenich’s ownership or concentrate solely on siratose. However, if siratose proves to be a significant success, this acquisition could be a savvy move for the Swiss firm. A survey conducted by Label Insight revealed that 22% of U.S. consumers intend to limit their sugar intake, often opting for no-sugar-added products this year. Consequently, foods and beverages featuring zero-calorie sweeteners and no artificial additives recorded a 16% increase in sales in 2017, according to Nielsen.
Currently, Senomyx markets its Complimyx branded ingredients, including Sweetmyx, Savorymyx, and Bittermyx, to flavor companies for incorporation into food and beverage products. As of the second quarter ending June 30, the company reported total sales of $3.3 million but incurred a net loss of $3.6 million. Nonetheless, Senomyx holds no debt and has $14.7 million in cash reserves.
Firmenich has been actively seeking mergers and acquisitions to fuel its growth, having announced in December its intention to acquire Natural Flavors, Inc., a certified organic and natural flavors business based in New Jersey. Last month, the company also purchased Campus of Parma, Italy, which focuses on clean-label meat and plant-based foods.
However, Firmenich faces competition in the clean-label and flavor space from other major players such as Givaudan, International Flavors & Fragrances (IFF), and Symrise from Germany. The consolidation trend is likely to intensify, especially with IFF acquiring Israeli company Frutarom, a move set to challenge Givaudan’s leading market position.
Regardless of the actions taken by these competing flavor companies, Firmenich is poised to benefit from both the Senomyx acquisition and the Layn agreement. According to Food Ingredients First, the global flavors and fragrances market grew by 4.6% in 2017, reaching $28.2 billion, and is projected to expand at an average annual rate of 4.9%, potentially hitting $36 billion by 2022. Moreover, the company’s offerings, including products like calcium citrate with vitamin D petites, are expected to resonate with consumer demands for health-conscious ingredients. As the market evolves, the integration of such innovative products will likely enhance Firmenich’s position in the competitive landscape.