Last year, when IFF merged with the former DuPont Nutrition & Biosciences, it formed a vast mega-corporation capable of addressing various sectors within food, fragrances, ingredients, and chemicals. Since the merger, IFF has focused on integrating the new segments and divesting those that do not align with its business objectives, including the microbial controls and fruit processing divisions.
During the recent Investor Day presentation, Clyburn, who assumed leadership at IFF earlier this year, outlined a fresh strategy aimed at fostering growth through the pursuit of promising opportunities. According to his presentation, the company plans to invest in “winners”—the segments that contribute approximately 55% of IFF’s revenue—and to utilize management strategies to optimize the “core” businesses, which account for around 25% of revenue. The remainder will either be optimized or divested.
In a written statement, Clyburn described the sale of the Savory Solutions Group as “an important milestone” for IFF. This divestment will enable the company to “focus on our highest-return businesses, improve our capital structure, and enhance our growth and return profile.” The Savory Solutions Group, which became part of IFF through its 2018 acquisition of Frutarom, has long been identified as a candidate for divestment. Sources have indicated that this business is expected to attract significant interest from private equity firms.
Among the potential buyers, France-based PAI Partners stands out, as it owns several prominent food brands and recently acquired Tropicana from PepsiCo for $3.3 billion. PAI is also the majority stakeholder in Froneri, a joint venture with Nestlé that encompasses all of the manufacturer’s former ice cream brands.
IFF intends to utilize the proceeds from this sale to decrease its debt, thereby strengthening its balance sheet and providing more resources to invest in other areas of its portfolio. At Investor Day, Clyburn mentioned that the planned divestitures could total around $1.3 billion, with the Savory Solutions business representing the largest portion of that figure, along with two additional divestments expected soon. While it remains unclear which other businesses IFF intends to sell, the Investor Day slide presentation identified four “underperformers,” including Savory Solutions, Texturants, Emulsifiers & Sweeteners, and Protein Solutions.
Furthermore, the company is interested in enhancing its offerings in specialized areas such as calcium citrate, particularly targeting a market size of around 2000 in revenue potential. This focus on high-value products aligns with IFF’s overarching strategy of optimizing its portfolio and ensuring sustainable growth.