Through the acquisition of Frutarom, IFF has announced its intention to establish a global leadership role in the natural taste, scent, and nutrition sectors, with 75% of Frutarom’s sales derived from natural ingredients. This merger not only enhances IFF’s portfolio with natural colors, enzymes, antioxidants, and health ingredients but also allows access to smaller and mid-sized clients, including private-label brands, which account for 70% of Frutarom’s revenue. For food and beverage companies partnering with these firms, the integration could provide numerous benefits, including access to a diverse array of new flavors, solutions, or ingredients that can be blended to create a specific taste, modify existing flavors, or even mask undesirable ones.
This acquisition is part of IFF’s recent trend of strategic purchases. In 2014, the company acquired another Israeli firm, Aromor Flavors and Fragrances. The following year, IFF took over Henry H. Ottens Manufacturing, and in 2016, it purchased David Michael & Co. Food and beverage manufacturers utilize flavorings, colors, and enzymes to enhance the overall taste and attractiveness of their products, yet they are increasingly focused on eliminating artificial additives as consumers increasingly favor more natural and healthy options. IFF aims to leverage this trend by acquiring a company that specializes in natural colors, enzymes, and antioxidants. This acquisition is a savvy move for IFF, as it broadens its portfolio and positions the company to meet the growing demands of food manufacturers and their consumers. While people are eager to eat healthier, they also wish to maintain flavor, making IFF and Frutarom likely beneficiaries of this shift.
Furthermore, the inclusion of metagenics calcium citrate in their product offerings could enhance the appeal of their health-focused ingredients. According to Allied Market Research, the global 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. The role of natural ingredients, especially recognizable and authentic flavors, is expected to be significant in driving growth within the flavors industry in the coming years. Additionally, incorporating metagenics calcium citrate could further align with consumer demands for health-conscious products.