KEY INTERVIEW: Symrise – Partnerships Key to Tackling Challenging Changes in Food Industry
01 Feb 2016 --- German flavors and fragrances company Symrise has been a key supplier to the food manufacturing industry for over a century and has specialised to become one of the most successful ingredients suppliers today. Its Flavors division in EAME, headed up by Dirk Bennwitz, has seen first-hand how changes in the food industry in the last ten years have changed the global food landscape, and has strategically changed with the times. Bennwitz spoke to FoodIngredientsFirst about how Symrise has risen to each challenge.
“Consumer preference is about much more than just good food. It is more than good taste, it means also quality and safety of the food and its ingredients and this creates perceived value. This shift in attitude has changed the market for Symrise and what we offer in terms of product portfolio,” he says. “Today we are focussing a lot on this growing desire as good food needs both science and nature to offer consumers the best for them in a safe, ethical, sustainable and high quality way.”
In order to cater for that shift, Symrise has taken a strategic decision to invest especially in the area of natural flavors and sustainable food ingredients, which will set it apart from its competitors and further its share price and profit development, both of which make it one of Germany’s most successful companies on the stock exchange.
In 2014, Symrise bought the French ingredients firm Diana for €1.3bn, which has enabled it to quickly and successfully become a leading supplier of natural flavors and food ingredients. Bennwitz sees further strategic investments in this area as highly likely in the future, as Symrise builds on its ‘natural’ expertise and creates a unique position in the flavors market.
“In order to achieve our Good Food, Great Experience mission, we are bringing science and nature together,” explains Bennwitz. “As a traditional science company teaming up with Diana, which brings natural and sustainable ingredients, we have a lot to play with. For example, Diana is producing natural coloring foodstuff combined with natural flavors we can provide the complete solution and as we supply that complete color/flavor package to our customers, we can create a complete flavor solution in one package, which eliminates the need for two or three ingredients for the customer.”
“So in the purchase of Diana, we have created a major development in our strategy and this is an area that we will continue to invest in,” continues Bennwitz.
Many of the changes in the food industry have been driven by the trend for healthy lifestyle and wellbeing, says Bennwitz, but whilst it certainly started in the more developed areas of Western Europe and North America, this consumer shift is now seen increasingly as a global development and as it progresses it is driven by a demand for more transparency in the food chain. Today’s consumer demands to know where the food on his/her plate comes from, down to whether child labor was used to produce it, or rainforests destroyed to grow it. If Symrise is to continue to be relevant in a society that demands such transparency, then it also needs to follow that route. There is also a lot of pressure on food manufacturers not to harm the environment, people or animals.”
As such, the company has met with its supplier growers and in many cases, initiated programs for workers and their families that ensure they have access to education and good farming practice. In Madagascar, Symrise has its own vanilla extraction plant, so it can produce fully traceable ingredients, while building personal relationships with growers and supporting them to get the best out of the soil and plant but in a sustainable way.
And although all this comes with a higher price tag, Bennwitz notes that people are prepared to pay the extra. “There is a higher cost,” he says, “but this means that we need to provide some added value and then customers and consumers are prepared to pay a higher price. Also, some products, due to supply and demand, are becoming more affordable.”
Natural is not just a buzzword or a trend, nor is the trend for healthy foods. There is a serious side to using natural ingredients to reduce some of the ingredients that are making so many people unhealthy, namely sugar, salt and fat. However, by reducing these unhealthy ingredients, there are also usually taste and functional changes, and this is where much of the innovation of the past years has been, says Bennwitz.
“In order to reduce the sugar, salt or fat, we must look at taste modulation. This is a key area for Symrise which requires not just development capabilities but basic research to identify powerful natural ingredients,” says Bennwitz. “This research is fundamental to our development because of the nature of today’s partnerships with customers. It is no longer enough to just supply a product; the customer wants solutions.”
The role of the ingredient supplier has changed in recent years. It is no longer enough to just supply the required ingredient in the amounts requested, today’s agreement is a partnership, whereby the ingredient supplier gives so much more to the food manufacturer in terms of research & development knowledge, consumer insight, trend forecasting, as well as ensuring sustainability of ingredients.
“This represents a fundamental change in the whole food industry,” says Bennwitz. “It used to be simple, but now you just can’t do it alone. The industry has taken to developing partnerships to look at a problem in a holistic way and develop solutions together. The result is often a high added value product and strengthens the strategic partnership with clients as well.”
So while food manufacturers traditionally sought to drive the market, today, it is being driven by consumer demands, picked up by ingredients manufacturers, who, in many cases, spend several years developing solutions in order to give them to the food manufacturers when they need it. “That kind of development takes time,” explains Bennwitz. “Customers [food manufacturers] realise this and will expect it as well; it’s all part of the partnership.”
Symrise is very successful in terms of business growth and in order to ensure this profitable development Bennwitz is putting all his efforts, by building strategic growth in the form of strategic investments to develop new added value products that will appeal to the consumer and differentiate the company from its competitors. In a more complex industry, the ingredients supplier has become the one to predict the trends and develop the solutions of the future, often before the customer sees the demand. Symrise is at the forefront of the changes, and it is rising to the challenge.
By Kelly Worgan
