Firmenich Posts 4.3% Decline in Overall Sales

The company reported that flavor sales declined overall for the first time in more than eight years, as the global recession weighed on consumer spending. Consumers nevertheless continued to eat and drink.

08 Oct 2009 --- For its 2009 fiscal year, ended June 30, 2009, flavors and fragrances giant Firmenich posted sales of CHF 2’641 million, a decline of 4.3% in local currencies. Consumer products were the most resistant to the global recession that marked the period, as consumers continued to eat and drink, wash and clean, while Fine Fragrance was affected by lower demand.

The Group preserved its financial strength through controlled spending, while maintaining key investments to respond to future client and consumer needs.

The challenges of a global economic crisis drove our focus on innovation. Thirty-two new patent applications for new fragrance and flavor ingredients, unique delivery systems and original processes were filed during the year, while the company's perfumers and flavorists continued to create the great fragrances and tastes that are the hallmark of the Firmenich Group.

The company reported that flavor sales declined overall for the first time in more than eight years, as the global recession weighed on consumer spending. Consumers nevertheless continued to eat and drink. The Sweet Goods segment resisted the crisis best, posting slightly higher sales, thanks in particular to nutritional and confectionary products, while Savory Foods and Beverages recorded modest declines. Beverages were affected in particular by changing habits, as consumers switched from bottled drinks to tap water, while Savory categories like snacks and soups posted growth.

Geographically, although all markets were affected by the downturn, Western Europe and North America posted the weakest performance, while emerging markets posted continued growth, albeit at a slower pace. In this turbulent environment, we continued the integration of our Danisco acquisition and folded integration activities into ongoing operations at the end of the fiscal year, according to plan.

Firmenich noted that they are continuing to invest in innovation as a key to our future. “As part of our efforts to support healthier diets, we reinforced our sweet taste enhancement program with the purchase of exclusive rights to a novel sweet enhancer developed by US start-up Senomyx”. The companies entered into a collaborative research, development, commercialization and license agreement for Senomyx's novel flavor ingredients intended to enhance the taste of sucrose (table sugar), fructose, and Rebaudioside (stevia) in August. The move will give clients the opportunity to access flavors that reduce the need for sweeteners, without compromising on taste, and should offer consumers a significant reduction in calories in a cross-section of every-day staples, including dairy products, instant drinks and desserts. New flavor ingredients introduced during the year, included new fruity/tropical tastes and natural flavors for meat and savory applications.

“At the end of the year, we had a healthy new product development pipeline. With most of the recession hopefully behind us, we look forward to leveraging our position as one of the most innovative Flavor companies in the world to take advantage of the recovery,” the company said in a statement.