MarketsandMarkets http://www.marketresearch.com/marketsandmarkets-v3719/ Publisher Sample Phone: 800.298.5699 (US) or +1.240.747.3093 or +1.240.747.3093 (Int'l) Hours: Monday - Thursday: 5:30am - 6:30pm EST Fridays: 5:30am - 5:30pm EST Email: customerservice@marketresearch.com MarketResearch.com
FOOD FLAVORS MARKET BY TYPE NATURAL (Natural Extract, Aroma Chemical, Essential Oil) & SYNTHETIC (Savory, Citrus, Fruit), APPLICATION (Beverage, Savory & Snack, Bakery & Confectionery, Dairy & Frozen), & GEOGRAPHY MarketsandMarkets sales@marketsandmarkets.com www.marketsandmarkets.com
MarketsandMarkets is a global market research and consulting company based in the U.S. We publish strategically analyzed market research reports and serve as a business intelligence partner to Fortune 500 companies across the world. MarketsandMarkets also provides multi-client reports, company profiles, databases, and custom research services. MarketsandMarkets covers fourteen industry verticals, including aerospace & defence, advanced materials, automotives and transportation, banking and financial services, biotechnology, chemicals, consumer goods, energy and power, food and beverages, industrial automation, medical devices, pharmaceuticals, semiconductor and electronics, and telecommunications and IT. Copyright 2014 MarketsandMarkets All Rights Reserved. This document contains highly confidential information and is the sole property of MarketsandMarkets. No part of it may be circulated, copied, quoted, or otherwise reproduced without the approval of MarketsandMarkets. MarketsandMarkets 2
1 EXECUTIVE SUMMARY Flavors are used in wide ranges of products that include bakery, snacks, confectionery, meat, poultry, seafood, etc. The food flavors market includes natural and synthetic flavors. The market is driven by changing consumer trends and food preferences. The food & beverage (F&B) processing industry also influences the food flavors market. F&B manufacturers widely use synthetic flavors to provide the product with the desired taste. However, synthetic flavors may result in adverse reactions when exposed to sensitive consumers. FDA regulates the concentration range of synthetic flavors in food products and has banned synthetics that are harmful upon consumption. The awareness among consumers that are related to these risks of food additives impacts the food flavors market. The market is characterized by the growing demand for natural food flavors. The trend of natural flavors originated from the appeal of European nations to market clean label food products that are free of additives, especially synthetic variants. Hence, the changing lifestyle and the booming food and beverage industry have driven the demand for natural flavors. The leading F&B manufacturers demand natural flavors to extend their product quality. Consequently, various new food flavors extraction technologies are employed in combination with natural food flavors to add desired tastes and flavors in food. MarketsandMarkets 3
FIGURE 1 FOOD FLAVORS MARKET VALUE, BY TYPE & GEOGRAPHY, 2012 ($MILLION) Market value 2012 ($million) Market value 2012 ($million) North America Europe Asia- Pacific ROW Natural Synthetic North America Europe Asia- Pacific ROW Source: MarketsandMarkets Analysis The food flavors market was dominated by artificial flavors in 2012. The natural flavors market was dominated by Europe that was worth $ million in 2012. The natural flavors market is projected to grow with increasing consumer demand for natural food and for products with minimal synthetic additives. In 2012, North America accounted for the largest share, followed by Asia-Pacific in the food flavors market. Emerging markets such as China and India drive the Asia-Pacific market. The North American and Asia-Pacific food flavors markets, together accounted for a value share of about % in 2012. Leading players in the market include companies such as Givaudan (Switzerland), Firmenich (Switzerland), IFF (U.S.), Takasago International Corporation (Japan), Symrise (Germany), etc. The leading companies invest in the development and innovation of lead molecules from natural sources such as plants and animals, and are a healthier alternative to synthetic flavors. MarketsandMarkets 4
2 PREMIUM INSIGHTS FIGURE 2 FOOD FLAVORS MARKET SEGMENTATION FOOD FLAVORS MARKET TYPE APPLICATION GEOGRAPHY Natural Synthetic Beverages Savory & snacks Bakery & conf ectionery Dairy& frozen Others* North America Europe Asia-Pacific ROW *- Sauces, dressings, etc. Source: MarketsandMarkets Analysis The global food flavors market is segmented in terms of geography, types, and applications. In terms of geography, the market is divided into North America, Europe, Asia-Pacific, and Rest of the World (ROW), where North America emerges as the global leader, followed by Asia-Pacific and Europe. Key food flavors types include natural and synthetic. Food flavors find wide applications in the food and beverage industry such as beverages, bakery and confectionery, dairy & frozen food, and meat products. MarketsandMarkets 5
FIGURE 3 FOOD FLAVORS MARKET VALUE ANALYSIS, BY GEOGRAPHY, 2012 2018 ($MILLION) CAGR % (2013 2018) Market value, 2012 ($million) *Bubble size indicates Market value, 2018-p ($million) p - Projected Source: MarketsandMarkets Analysis The global food flavors market is projected to reach $ million by 2018, growing at a CAGR of % from 2013 to 2018. North America led the market with % of the share in 2012 and is projected to reach $ million by 2018, followed by the Asia-Pacific market. Due to the increasing use of processed food, Asia-Pacific has the fastest projected growth, with a CAGR of %, followed by Europe, which is projected to witness the second-fastest growth at a CAGR of %. MarketsandMarkets 6
3 INDUSTRY ANALYSIS 3.1 INTRODUCTION Market forces play a predominant role in the growth of the flavor industry despite there being an economic slowdown globally in 2012. The taste of most of the canned and frozen food along with most of the beverages is enhanced by the flavors added to it. Flavors are also used in oral care and the pharmaceutical industry. The demand for food flavors had increased phenomenally in recently, the reason being a considerable increase in the food choices of consumers wherein the food flavor is the main ingredient that influences the choices of consumer. There is an increase in demand for the consumption of food that consists of different flavors, globally. This demands a highly cost effective and innovative ways of production of flavors to be added as an ingredient. The production of natural food flavors turns out to be expensive when compared to synthetic food flavors. Across the globe, the flavor industry is functioning in the environment where high competition and innovation persists. However, it is one of the most established industries in the world. The market of flavors varies from country to country and is also regiocentric within the country as the flavors in demand differ from place to place. For example, roasted meat flavor is of high demand in most of the parts of Europe, but the Chinese population is fond of boiled meat flavor whereas India has hardly any market for the aforesaid flavors. Therefore population plays a vital role in the flavor industry, which makes flavor companies trigger upon the densely populated geographical regions that increases the scope of regions such as Asia-Pacific, Latin America, Africa, and the Middle East. There is an increasing importance for dairy flavors such as Indian Lassi, Finnish Kefir, and Greek Yoghurt. The dairy flavor industry is routing itself more towards ethnic and exotic flavors such as banana, chocolate, vanilla, or strawberry. In the developed markets, there is a growing significance for savory snacks, soups, and ready-to-eat or canned food, which in turn led to a huge demand for savory flavors. Sauces and seasonings are the premium lines for growth of the flavor industry. Consumers prefer sauces and seasoning for a fine-dine experience. Also, in addition to domestic purposes it is also used in the restaurant industry that MarketsandMarkets 7
results in an increased demand for savory flavors. There is a dire need for the companies present in the flavor industry to capitalize the demand that prevails for the aforesaid flavors and innovate new cost effective methods of production, which will help increase the tight profit margins of the flavor industry. 3.2 SUPPLY CHAIN ANALYSIS FIGURE 4 FOOD FLAVORS MARKET SUPPLY CHAIN ANALYSIS Basic Intermediate Chemical Manufacturer Food flavors manufacturer Food flavors blends manufacturer Food & Beverage Manufacturer Natural Ingredient Supplier Distributor Source: Related Research Publications and MarketsandMarkets Analysis The diagram above describes the supply chain of food flavors that starts from the basic intermediate chemicals and extracts manufacturers and natural ingredient suppliers, and ends at the food & beverage manufacturer. Basic intermediate chemicals and natural ingredients are supplied to food flavors manufacturers. The manufacturers sell their products to the blends manufacturer, if required, which is then passed to food and beverage manufacturers. The food flavor supply chain is composed of a wide range of products and companies, which sell a variety of products. MarketsandMarkets 8
Most of the global bodies follow the lead of either the U.S. or EU when determining if a flavor is natural. Although the U.S. and EU regulatory requirements are similar, they do have distinct differences. Definition of natural flavor in the U.S.: An essential oil, oleoresin, essence or extractive, protein hydrolysate, distillate, or any product of roasting, heating or enzymolysis Definition of natural flavor in the EU: Vegetable, animal, or microbiological source material. It must be produced by a traditional food preparation process. In the U.S., a material is deemed natural when it is derived from a product such as a spice, fruit, extract, oleoresin, or from a group of materials that the FDA recognizes as natural starting materials. There is a long list of processes that can be applied to derive the flavor with a natural claim still being permitted, such as distillation, extraction, roasting, heating, enzymolysis, hydrolysis, and fermentation. The real weight in the U.S. definition of natural is given to illustrate that the flavor is derived from a natural source, and not from the process used. Regulations are a bit more rigorous in the EU since the EFSA is more restrictive with the permitted processes. The EU Directive 1334/2008 contains a list of processes that are acceptable to produce a natural item. The differences also carry over into labeling requirements. On labels in the U.S., a natural ingredient is either described as a natural or natural flavor, wherein according to the EU, the description tends to be broader. Other EU definitions include natural flavoring substance, which signifies a single, high-purity molecule that may have been processed in some way or a natural flavoring preparation, which indicates that several different compounds are present in the ingredient. 3.3 HISTORY & EVOLUTION Flavor provides immense satisfaction and pleasure to the senses of consumers. Human brain functioning also depends on the food intake. Humans are highly impacted by the sense of aroma and taste, which paved a way for the evolution of flavors. Flavors existed right from the pre-historic times wherein the main ingredients for flavoring purposes were herbs, fruits, aromatic plants, and spices. MarketsandMarkets 9
The prominent methods adopted to obtain essential oils and resins from natural sources during the pre-christian period by Egyptians were distillation and extraction, which was later implemented by Arabs due to their civilization in the perfume industry. These methods were also used to produce pharmaceutical products such as Balsamic oils during the period when there was an increase in the significance of fragrances. The source for food flavoring was identified by monks in the medieval period, who became leaders in extracting natural essences and food flavoring agents. Though flavors existed from the Egyptian times, the manufacture of essential oils came into existence in the 19th century. In of the mid 19th century the importance for chemical compounds increased, which led to the evolution of synthetic flavors. Despite the existence of flavors in the Egyptian times, synthetic flavors evolved only 170 years ago due to the decrease in supply of natural flavors-the reason being scarcity of natural resources. The decrease in the supply of natural flavors resulted in an increase of costs. Hence, to have cost effectiveness along with the growing importance of chemicals, synthetic flavors evolved and led to the development of the flavor industry. Vanilla was the first ever flavoring agent derived out of an alcoholic extract of vanilla beans in, following which artificial wintergreen oil and artificial butter almond oil were extracted for fruit aroma. MarketsandMarkets 10
4 MARKET ANALYSIS 4.1 INTRODUCTION A flavor is an integral part of food, without which food will not have an appetite value. Flavor is a stage where imaginations are endless, and no limits can restrict its growth. Culture plays a crucial role in formulating the flavors in foods; every culture has a specialty flavor. Flavors have been immensely growing from food to cosmetics, medicines to personal care, and several others in the recent past. When the world suffered from the tsunami, the recession, and an economical downturn in almost all industries, the flavor industry had a swift recovery with remarkable performance. Divergence towards health concerns twisted the tale of the flavor industry and introduced fundaments of naturalness in food flavors. Several manufacturers adopted this newer concept in great appreciation and molded it in various food segments. Consumers changing awareness of healthy foods and growth of the industry moved hand in hand. Along with the connection to nature, natural flavors illustrate an improvement in health functionality, for which it grabbed a majority of the market. Junk food products, which are seen at every corner of a supermarket, are the unhealthiest ones, and manufacturers are worried of the depleting market for unhealthy junk foods as the trend for healthy food is growing. Hence, these manufacturers have junk food a healthy face, by imparting natural flavors and referencing them to be a part of a healthy diet. Applications of flavors are wider and have ample scope in the food industry. Natural flavors face the constraints of availability, which is gradually getting resolved through innovation in technology. Technology, with a continuum in innovations in food applicability of natural flavors, is the most important part for the industry to grow and widen up. A few companies that are a part of this market include Givaudan SA (Switzerland), IFF Inc. (U.S.), Firmenich SA (Switzerland), Frutarom Ltd. (Israel), Takasago International Corporation (Japan), T. Hasegawa Co. Ltd. (Japan), Sensient Technologies (U.S.), and Robertet SA (Germany). MarketsandMarkets 11
4.2 BURNING ISSUE 4.2.1 HEALTH ISSUES RELATED TO THE CONSUMPTION OF SYNTHETIC FLAVORS Synthetic flavorings that are used as low-cost substitutes for natural flavorings are not usually listed individually. One that may be listed separately is vanillin (imitation vanilla), widely used in chocolate as well as in vanilla-flavored items. A few consumers who believe they are allergic to chocolate may actually be reacting to this artificial flavoring. One source of imitation vanilla flavoring is the waste product of paper mills, and another is petroleum. Therefore, while vanillin is technically identical to one of the chemicals in pure vanilla flavoring, the manufacturing methods result in high levels of sulfites and other contaminants. A single synthetic flavoring can be a combination of hundreds of individual chemicals, several of which are derived from petroleum. Even when extensive toxicity testing is done, it could be ignored. For example, vanillin continues to be listed as GRAS despite its ability to inhibit the liver enzyme dopamine sulphotransferase by %. Other flavorings affect RNA, thyroid, and enzymes. MarketsandMarkets 12
4.3 MARKET DYNAMICS FIGURE 5 FOOD FLAVORS MARKET DYNAMICS High Impact Medium Growth Impact High Growth Impact Low Impact Low Growth Impact Low High Source: MarketsandMarkets Analysis An increasing demand for ready meals and advanced technological innovations drive the market and moderately impact the market growth. Health effects of synthetic flavors and lesser availability and stability of natural flavors are the main restraints for the market. Food demand, new raw material sources, health issues, and emerging markets can be observed as opportunities for the food flavors market growth. MarketsandMarkets 13
5 FOOD FLAVORS MARKET, BY TYPE 5.1 INTRODUCTION Flavor usage plays a pivotal function in packaged food applications in all regions. Flavor application varies according to the region. Though specific flavor attributes may change from region to region, the spirit of embracing new tastes remains the same. The flavor market is estimated to demonstrate continued regional growth in Asian and Latin American countries. The flavors industry is affected by the projected growth within premium lines of sauces & seasonings, which appeal to consumers who cook exorbitant meals at home, but are still on the lookout for a fine dining experience and restaurant-quality meals. These products often rely on the aspirational values of the consumer. For example, premium vinegars and dressings are frequently marketed by describing the process or vintage to denote the quality of the product. TABLE 1 FOOD FLAVORS MARKET VALUE, BY TYPE, 2011-2018 ($MILLION) Type 2011 2012 2013-e 2018-p CAGR% (2013-2018) Natural Xx Xx Xx Xx Xx Synthetic Xx Xx Xx Xx Xx Total Xx Xx Xx Xx Xx e Estimated; p Projected Source: Related Research Publication, Government Publication, Company Press Release, Company Annual Report, Company Website, Company Publication, and MarketsandMarkets Analysis The food flavors market value was $ million in 2012. The market for natural flavors is projected to reach $ million by 2018, growing at a CAGR of %. The synthetic flavors market was estimated to be $ million in 2013. MarketsandMarkets 14
TABLE 2 FOOD FLAVORS MARKET VOLUME, BY TYPE, 2011-2018 (KT) Type 2011 2012 2013-e 2018-p CAGR% (2013-2018) Natural Xx Xx Xx Xx Xx Synthetic Xx Xx Xx Xx Xx Total Xx Xx Xx Xx Xx e Estimated; p Projected Source: Related Research Publication, Government Publication, Company Press Release, Company Annual Report, Company Website, Company Publication, and MarketsandMarkets Analysis The food flavors market accounted for a volume of KT in 2012. The market for natural flavors in terms of volume is projected to reach KT by 2018, growing at a CAGR of %. The synthetic flavors market in volume was estimated to be KT in 2013. 5.2 NATURAL FLAVORS In the U.S., a natural flavor is defined by the Code of Federal regulations, as the essential oil, oleoresin, essence, or extractive, protein hydrolysate, distillate, of any product of roasting, heating, or enzymolysis, which contains the flavoring constituents derived from a spice, fruit juice, vegetable, or vegetable juice, edible yeast, herb, bud, bark, root, leaf, or similar plant material, meat seafood, poultry, eggs, dairy products or fermentation products thereof whose significant function in food is flavoring, rather than nutrition". Health issues have become perennial concerns in the food industry. With consumers demanding lower sugar, lower fat, and lower salt products, and governments developing new dietary guidelines, manufacturers are faced with the challenge of retaining the taste and texture of products. Flavor companies find solutions to address these challenges with bolder flavors, which can offset the blandness that low-salt or low-fat products would otherwise have. Despite an extensive use of flavors from artificial sources, natural sources continue to provide MarketsandMarkets 15
flavors that are unique and effective. A growing segment of consumers prefers natural foods to foods that contain artificial additives. While modern synthetic methods permit the economical production of artificial flavors on a large scale, the natural flavor industry remains important. TABLE 3 NATURAL FOOD FLAVORS MARKET VALUE, BY GEOGRAPHY, 2011-2018 ($MILLION) Region 2011 2012 2013-e 2018-p CAGR% (2013-2018) North America Xx Xx Xx Xx Xx Europe Xx Xx Xx Xx Xx Asia-Pacific Xx Xx Xx Xx Xx ROW Xx Xx Xx Xx Xx Total Xx Xx Xx Xx Xx e Estimated; p Projected Source: Related Research Publication, Government Publication, Company Press Release, Company Annual Report, Company Website, Company Publication, and MarketsandMarkets Analysis The natural food flavors market value is projected to reach $ million by 2018. The European market for natural flavors was the largest market in 2012. The Asia-Pacific market was estimated to be $ million in 2013 and is projected to grow at a CAGR of %. MarketsandMarkets 16
6 FOOD FLAVORS MARKET, BY APPLICATION 6.1 INTRODUCTION Food flavors have numerous applications in the food and beverage industry. They are used in a wide range of products that range from beverages to frozen food to dairy products. The industry had witnessed consistent growth in the past few years. North America, particularly U.S., is the largest producer of carbonated beverages, snacks, and bakery products in the world. Asia-Pacific has shown the highest growth rates and has huge potential, mainly driven by huge demand from China and India. The food flavor industry works with legislators and regulators to ensure quality and standards of the product. TABLE 4 FOOD FLAVORS MARKET VALUE, BY APPLICATION, 2011-2018 ($MILLION) Application 2011 2012 2013-e 2018-p CAGR% (2013-2018) Beverages Xx Xx Xx Xx Xx Savory & snacks Xx Xx Xx Xx Xx Bakery & confectionery Xx Xx Xx Xx Xx Dairy & frozen products Xx Xx Xx Xx Xx Others Xx Xx Xx Xx Xx Total Xx Xx Xx Xx Xx e Estimated; p Projected Source: Related Research Publication, Government Publication, Company Press Release, Company Annual Report, Company Website, Company Publication, and MarketsandMarkets Analysis MarketsandMarkets 17
The food flavors market was valued at $ million in 2012 and is projected to reach $ million by 2018, growing at a CAGR of % from 2013 to 2018. The Beverages segment dominated the market in 2012. The dairy & frozen products segment was the second-largest market, with a value of $ million in 2012 and is projected to grow at a CAGR of % during the concerned period. In 2012, Bakery and confectionery had the third-largest contribution to the market with a value of $ million, and is projected to reach $ million by 2018, growing at a high CAGR of %. Food flavors market, by geography MarketsandMarkets 18
6.2 INTRODUCTION The global flavor industry is categorized as highly technical, specialized, and innovative. It is highly competitive, and concentrated, compared to other product categories within the food, and beverage market. This industry remains very country-specific, and complex with product formulations, and flavors varying from country to country, as well as from region to region with countries. Processed foods, their flavors and textures, are adapted to local consumers preferences. Local or traditional foods have unique flavors evolving from the indigenous climate, land, etc., which is why trends in flavors closely mirror these in the packaged food and drink market. FIGURE 6 FOOD FLAVORS MARKET VALUE SHARE, BY GEOGRAPHY, 2012 North America Asia- Pacific Europe ROW Source: MarketsandMarkets Analysis MarketsandMarkets 19
6.2.1 NEW INNOVATIONS LEAD THE FOOD FLAVORS MARKET The changing perception of people about the processed foods, and the technological innovations led to an increase in the processed product s demand, and subsequently the food flavors market. The North American food flavors market was estimated at $ million in 2012, and is projected to reach $ million by 2018, growing at a CAGR of % with the leading F&B players present in the market. TABLE 5 FOOD FLAVORS MARKET VALUE, BY GEOGRAPHY, 2011-2018 ($MILLION) Region 2011 2012 2013-e 2018-p CAGR% (2013-2018) North America Xx Xx Xx Xx Xx Europe Xx Xx Xx Xx Xx Asia-Pacific Xx Xx Xx Xx Xx ROW Xx Xx Xx Xx Xx Total Xx Xx Xx Xx Xx e Estimated; p Projected Source: Related Research Publication, Government Publication, Company Press Release, Company Annual Report, Company Website, Company Publication, and MarketsandMarkets Analysis The food flavors market was valued at $ million in 2012, and is projected to reach $ million by 2018, growing at a CAGR of % from 2013. North America dominated the market in 2012. The Asia-Pacific market was the second-largest market, with a value of $ million in 2012 and was growing at the highest CAGR of % during the specified period. In 2012, Europe had the third-largest contribution to the market with a value of $ million, and is projected to reach $ million by 2018, growing at a healthy CAGR of % during the period under consideration. MarketsandMarkets 20
6.3 ASIA-PACIFIC The Asia-Pacific market for food flavors is estimated to rise at a CAGR of %. Asia-Pacific is one of the developing regions which consist of china and India as the fastest growing economies; hence the scope for the flavors market is very high. Large consumption of soft drinks- and dairy-based food and beverages are consumed in these countries.the consumption of packaged foods and convenience foods is also gaining momentum. FIGURE 7 ASIA-PACIFIC: FOOD FLAVORS MARKET VALUE SHARE, BY COUNTRY, 2012 Aus-NZ China India Japan Indonesia Others Source: MarketsandMarkets Analysis MarketsandMarkets 21
TABLE 6 ASIA-PACIFIC: FOOD FLAVORS MARKET VALUE, BY COUNTRY, 2011-2018 ($MILLION) Country 2011 2012 2013-e 2018-p CAGR% (2013-2018) Japan Xx Xx Xx Xx Xx Indonesia Xx Xx Xx Xx Xx India Xx Xx Xx Xx Xx China Xx Xx Xx Xx Xx Australia-New Zealand Xx Xx Xx Xx Xx Others Xx Xx Xx Xx Xx Total Xx Xx Xx Xx Xx e Estimated; p Projected Source: Related Research Publication, Government Publication, Company Press Release, Company Annual Report, Company Website, Company Publication, and MarketsandMarkets Analysis Asia-Pacific food flavors market is projected to grow at CAGR of % from 2013 to 2018, and is estimated to reach $ million by 2018. Australia-New Zealand segment led the Asia-Pacific market by generating $ million value in 2012, and is projected to reach $ million by 2018, rising at a CAGR of %. MarketsandMarkets 22
7 COMPETITIVE LANDSCAPE 7.1 INTRODUCTION This section presents the important growth strategies adopted by companies in the global food flavors market from 2009 to 2013. The main strategies identified are: Mergers & acquisitions Expansions & investments Agreements/Partnerships/Collaborations New product launches The global food flavors market is driven by the increasing demand for processed bakery, snacks, confectionery, meat, poultry and other products from the consumers. The food flavors market includes two types of flavors-synthetic and natural flavors-which are widely used in the food and beverage industries to enhance the flavor of their products. A few of the major food flavor companies include Frutarom Ltd. (Israel), International flavors and Fragrance Inc. (U.S.), Givaudan (Switzerland), Firmenich (Switzerland), etc. MarketsandMarkets 23
FIGURE 8 FOOD FLAVORS MARKET DEVELOPMENTS, 2009-2013 No. of developments Source: MarketsandMarkets Analysis A total of 110 developments were registered in the food flavors market from 2009 to 2013. The flavors market is growing due to changing taste preferences of consumers in terms of food and beverages. New products were launched with a few distinctive flavors such as meaty, juicy, and spicy to meet the growing consumer demand. The number of developments increased from eleven to 30 from 2010 to 2011. MarketsandMarkets 24
8 COMPANY PROFILE 8.1 GIVAUDAN SA 8.1.1 OVERVIEW The company is involved in the manufacturing, and marketing of flavor, fragrance, and products. It offers products through two principle divisions namely, fragrances, and flavors. The Fragrances division offers fine fragrances, consumer products, and fragrance ingredients whereas flavors division offers a wide range of products used in beverages, dairy products, foodservice, health and wellness, savory, snacks and sweets. Givaudan has 33 production site, and facilities in 82 countries including U.S., Europe, Japan, and Asia-Pacific. Subsidiaries of the company are Argentina,Givaudan Argentina SA (Switzerland), Givaudan Australia Pty Ltd. (Australia), Givaudan Austria GmbH (Austria), Givaudan Do Brazil Ltda (Brazil), and Givaudan Private Ltd (India), P.T. Givaudan Flavors, and Fragrances Indonesia (Indonesia), Givaudan Italia S.P.A (Italy), Givaudan Japan K.K. (Japan), and the others. MarketsandMarkets 25
Company at a Glance 2013 Founded : 1895 Headquarters : Vernier, Switzerland Employees : 9,331 Revenue : $ Million R&D : $ Million Ownership : Public SIX : GIVN Geographic Revenue Mix Recent Financials % % % % 2009 2010 2011 2012 2013 Revenue % change Business Revenue Mix % % % Fragrance Division Flavor Division % Source: Company Publication and MarketsandMarkets Analysis MarketsandMarkets 26
8.1.2 PRODUCTS & SERVICES The company provides various tailored programmes about the essentials for flavors. TABLE 7 GIVAUDAN : PRODUCTS & THEIR DESCRIPTION Product Brand Description Beef This program renders a specific roasted taste of the boiled, grilled or fried meat, giving a distinctive flavor profile to the end product. Chicken This program provides the essence, flavor, and aroma of chicken with most of natural ingredients. Citrus This p program yields an authentic and natural citrus taste, and flavor solutions. Givaudan s program offers its citrus flavors to manufacturers of citrus beverage products. Taste Essentials Coffee Dairy This programme provides various flavors of coffee, dairy, and sweetness technology, which helps in stimulating the palette of consumers. This programme provides the flavor of fresh milk, its sweetness and creamy texture that gives an excellent mouth feel. Dairy & cheese The company provides flavors for cheese, and dairy products along with crackers, snacks and the various fillings. Mint The company provides a long lasting, cool, fresh and novel taste of mint with a complete set of flavors. Tea This program provides standard and complete flavors of tea, giving a distinctive flavor. Vanilla This programme offers high quality, authentic vanilla flavor with some distinctive characteristics. MarketsandMarkets 27
Product Brand Description Salt This program helps in reducing the sodium content by giving natural taste in savory foods. Taste Solutions Sweetness Umami This product provides natural solutions for sweetness enhancement. It offers fewer calorie and lower sugar solutions without sacrificing taste. This solution helps to enhance and maintain the original taste by reducing the Monosodium Glutamate (MSG) content in the products. Mouthfeel This program is arranged to create products containing less fat without compromising with the taste, aroma, mouth feel, and texture of the end product. ByNature ByNature is a programme which provides food and beverage manufacturers with natural flavors, seasonings, and natural taste solutions intended for natural flavor labeling on finished products. It provides flavors to food service, beverage, savory, and snack categories. PureDelivery PureDelivery is a technology designed to give desired flavor, essence, texture, look, and feel to the customers when the company delivers the product. Source: Company Publication and MarketsandMarkets Analysis 8.1.3 STRATEGY & INSIGHTS Givaudan continues to bring down the underlying market growth, and further expand its leading position in flavors industry. The company focuses on fast growing developing markets through share to reach % by 2015. The new savory flavors manufacturing facility at Mako, Hungary will help the company to secure its leading position in European developing countries. The company continues to invest $ million per year in its Research & Developments to strengthen its innovation platform. The company continues to capitalize on its technology innovation portfolio such as Taste Solutions, and new products launch periodically to help secure its leading position in global Flavors market. MarketsandMarkets 28
8.1.4 DEVELOPMENTS Date Approach Description June 2013 Expansion Givaudan, laid the foundation of Fragrance Creative Centre, and Compounding Facility in Singapore which will be completed by 2014. This new facility will represent the whole Asia-Pacific branch of Givaudan. It provides training to the performers and will also include facilities to enhance the company s capabilities in fragrance and savory technologies. April 2013 Expansion Givaudan, laid the foundation of a new Savory Facility in Nantong, China. This Facility will help the company to increase the production capacity in culinary flavor blends, snacks seasonings, spray dry, and processed flavors. This facility will be in operative by 2015 with 100 employees. March 2013 Expansion Givaudan, opened its new Innovation Centre in New Mumbai, India in order to bring innovations, and provide solutions in flavors to the Indian customers. Food and Beverage market in India would benefit by this new facility. October 2012 Expansion Givaudan, opened its new manufacturing Best-in-class facility of savory flavors in Mako, Hungary with over 200 staff and a total capacity of tones. This new facility will enable the company to strengthen their supply chain facility, and enhance their culinary and snacks segments. February 2012 New product Development Givaudan, introduced new and effective natural mouthfeel ingredients along with new programmes under the brand name Taste Solutions to overcome the mouthfeel issues in low-calorie products. The new product, and solutions launch helps the company to target the food manufacturers of sweet and dairy products. March 2011 Expansion Givaudan, invested $ million to establish new savory flavors manufacturing facility at Mako, Hungary. The new facility will be established in the first quarter of 2013. This investment is a part of the company s strategy to expand its business in fast- MarketsandMarkets 29
Date Approach Description developing European markets. February 2009 New product Development Givaudan, introduced new proprietary technology under the brand name Taste Solutions to overcome the challenges of high salt levels in processed foods. The new product launch helps the company to target the food manufacturers for great food taste along with salt in limited quantity. November 2009 New product Development Givaudan, introduced 10 new lemon and lime flavors for use in beverages and foods. These flavors are natural and naturallyderived citrus flavors. The new product launch is part of the company s strategy to introduce new products periodically to retain its leading position in flavors market. Source: Company Press Release, Company Annual Report, Company Website, Company Publications, and MarketsandMarkets Analysis 8.1.5 SWOT ANALYSIS Source: MarketsandMarkets Analysis MarketsandMarkets 30
Disclaimer: MarketsandMarkets strategic analysis services are limited publications containing valuable market information provided to a select group of customers in response to orders. Our customers acknowledge, when ordering, that MarketsandMarkets strategic analysis services are for our customers internal use and not for general publication or disclosure to third parties. Quantitative market information is based primarily on interviews and therefore, is subject to fluctuation. MarketsandMarkets does not endorse any vendor, product or service depicted in its research publications. MarketsandMarkets strategic analysis publications consist of the opinions of MarketsandMarkets' research and should not be construed as statements of fact. MarketsandMarkets disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. MarketsandMarkets takes no responsibility for any incorrect information supplied to us by manufacturers or users. All trademarks, copyrights and other forms of intellectual property belong to their respective owners and may be protected by copyright. Under no circumstance may any of these be reproduced in any form without the prior written agreement of their owner. No part of this strategic analysis service may be given, lent, resold or disclosed to noncustomers without written permission. Reproduction and/or transmission in any form and by any means including photocopying, mechanical, electronic, recording or otherwise, without the permission of the publisher is prohibited. MarketsandMarkets 31