Givaudan’s 2025 strategy: Flavor segment renamed, local businesses in focus

27 Aug 2020 --- Givaudan has officially unveiled its 2025 strategy, which is driven by portfolio expansion, investments in high growth markets like China and the trend for smaller and more local brands. The roadmap also comprises major financial targets for the next five years. Under the company’s new divisional renaming, its Flavour Division will be rebranded as Taste & Wellbeing to bring to the fore a sharpened focus on nutritional ingredients.

“‘Committed to Growth, with Purpose’ is our vision and roadmap for the next five years, continuing to create long-term value for all our stakeholders,” says Givaudan CEO Gilles Andrier. “We aim for continued ambitious financial targets while striving toward achieving our longer-term purpose ambitions in the areas of creations, nature, people and communities.”

In the period leading up to 2025, Givaudan aims to deliver an average organic sales growth of 4 to 5 percent on a like-for-like basis. In addition, the company targets an average free cash flow of at least 12 percent.

Three growth drivers
“Expand the portfolio” is Givaudan’s first growth driver, which comprises synergies between the company’s core business and the enhanced value proposition from the sixteen acquisitions integrated since 2014. The company aims to further expand beyond the current portfolio of flavors and fragrances, naturals and delivery systems into nutrition and food ingredients. 

The trend for smaller and local brands is expected to drive growth in the regional customer segment, while there will be continued potential with larger global customers.

“This broader offering will help customers to better respond to consumer demand for products that support health and wellbeing, positive aging and changing lifestyles, while meeting their ethical and responsible business expectations,” the company details.

Givaudan’s second target is “Extend customer reach,” which taps into a rapidly changing and more fragmented customer landscape. The trend for smaller and local brands is expected to drive growth in the local and regional customer segment, while there will be continued potential with larger international and global customers. 

“Focused market strategies” is Givaudan’s third target, which responds to the growth forecast in global consumption. In the last strategy cycle, the company made a number of investments in high growth markets to ensure greater proximity to its customers and develop further understanding of local consumer preferences. 

Over the next five years, the company intends to maximize mature market opportunities while at the same time extend its high growth market leadership, particularly in China.

Business highlights
Linked to the COVID-19 pandemic, Givaudan’s Flavour Division (Taste & Wellbeing) recently experienced a shift in demand from foodservice and alcoholic beverages into established products in categories such as Juice Based Beverages, Culinary Solutions, Nutritional Bars, Savoury and Snacks. 

This is in line with the company’s strong performance of high growth markets, which saw overall sales rise by 4.0 percent, and Flavour Division sales increased 3.6 percent (both on a like-for-like basis). According to the company, there was “excellent performance in parts of the portfolio that were not impacted by the pandemic.”

In other headlines, the flavor producer announced its intention to become a certified B Corp last month. The B Corp certification recognizes organizations that meet the verified standards of social and environmental performance, public transparency, legal accountability and balance of profit and purpose. 

Within its innovation pipeline, Givaudan’s latest partnership with Redefine Meat developed the world’s first “Alt-Steak” plant-based meat alternatives using industrial 3D printing technology. These have the texture, flavor and appearance of beef steak and can be produced in the volume and cost to enable large-scale market launch.

Tapping into the alternative meat sector in Asia, Givaudan and Bühler joined forces in Singapore to open an Innovation Center dedicated to plant-based food. Shortly after, the supplier unveiled a new line of natural red colors designed specifically for meat substitutes: Vegebrite Veggie Reds.

In other innovative moves this year, Givaudan launched a multi-sensorial virtual reality tool for citrus beverage applications, building on its long-term partnership with the University of California, Riverside (UCR). The flavor giant is combining sight, sound and smell, with a “truly surprising experience” that the company says will enable customers to learn about the citrus market landscape and co-create their own flavors.

Edited by Benjamin Ferrer