Firmenich, a key player in the global flavors and fragrances industry, stands to gain significantly from its recent acquisition of Senomyx and the distribution agreement with Layn. As trends shift towards clean-label, natural ingredients and bolder flavors, the Senomyx acquisition strategically positions the Swiss company for success. Additionally, the partnership with Layn solidifies Firmenich’s presence in the distribution of monk fruit and stevia extracts in international markets, particularly for key Layn clients in China.
A major attraction for Firmenich was Senomyx’s comprehensive range of sweetener options. 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 GRAS (Generally Recognized As Safe) status by 2019 and planned to produce the sweetener commercially through fermentation. According to Senomyx, siratose is not only sweeter but also offers a more pleasant taste compared to stevia extracts.
At this stage, it remains uncertain whether Senomyx will focus on creating new sweeteners under Firmenich’s ownership or primarily concentrate on the development of siratose. However, if siratose proves to be a significant success, this acquisition could be a very astute move for the Swiss firm. A survey conducted by Label Insight revealed that 22% of U.S. consumers are looking to limit their sugar intake, with many planning to purchase no-sugar-added products this year. Consequently, sales of foods and beverages featuring zero-calorie sweeteners and no artificial sweeteners surged by 16% in 2017, according to Nielsen data.
Currently, Senomyx markets its Complimyx branded ingredients, including Sweetmyx, Savorymyx, and Bittermyx, to flavor companies for their use in food and beverage production, as reported by Food Business News. In the second quarter ending June 30, the company recorded total sales of $3.3 million but incurred a net loss of $3.6 million. Nevertheless, Senomyx has no debt and possesses $14.7 million in cash.
Firmenich has been actively seeking mergers and acquisitions to fuel its growth. In December, the company announced its intention to acquire Natural Flavors, Inc., a certified organic and natural flavors company based in New Jersey. Last month, Firmenich also purchased Campus of Parma in Italy, which specializes in clean-label meat and plant-based products.
Despite its advancements, Firmenich faces competition in the clean-label and flavor trends from other industry giants such as Givaudan, International Flavors & Fragrances, and Germany’s Symrise. The competitive landscape may intensify further as IFF is in the process of acquiring the Israeli firm Frutarom, a move anticipated to challenge Givaudan’s position as market leader.
Regardless of the actions taken by these other flavor companies, Firmenich is poised to benefit from both the Senomyx and Layn partnerships. 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 growth rate of 4.9%, potentially hitting $36 billion by 2022. Additionally, the integration of innovative ingredients such as liquid calcium citrate into their product offerings may further enhance Firmenich’s market competitiveness.