Symrise eyes growth in "beyond clean label" flavors and emerging markets

29 Aug 2017 --- Symrise is targeting growth in flavors and ingredients that goes beyond clean label, as well as particularly eyeing expansion opportunities in emerging markets in Asia, as the flavor & fragrance giant enjoys strong growth and benefits from the incorporation of Diana’s know-how in ingredients into its’ portfolio.

Earlier this month, Symrise AG reported strong growth in the first half of the current fiscal year, remaining on track for full-year. The group increased sales in all segments and regions and was once again among the fastest-growing companies in the industry. Sales were up 3.6 percent in the first half of the year to €1.51bn (H1 2016: €1.46bn). 

Earlier this year, Symrise signed an agreement to acquire Cobell, the largest supplier of processed fruit and vegetable juices in Great Britain and a leading supplier across Europe. Cobell ideally complements the activities and will enhance Symrise’s local presence and customer proximity.

FoodIngredientsFirst caught up with Heinrich Schaper, Executive Board Member and Global President Flavors at Symrise, who discussed the drivers behind the strong growth at the company: “For the Flavor division, we had strong organic growth through our key taste platforms, which we launched some years ago. This is all about vanilla, meat flavors, vegetables and our mint program. So they were the drivers across all regions.”

For Symrise, the vanilla market in particular has been very successful, as the company has operations on the ground in Madagascar and extensive farmer support programs. “We support about 7,000 partner farmers and their families in helping them in how they do their growing and ensuring that they do not harvest beans too early and cure them in the right way,” explains Schaper. 

“This high level of engagement helps us achieve security of supply and a sound quality base, which our customers really appreciate. With the ups and downs in the vanilla market, we tend to stay away from the wheeling and dealing and establish longer term partnerships with our customers. This ensures that we have business relationship stability and appropriately manage price fluctuations, in order to create the benefits for our customers of that kind of long term business model.” 

But this year’s turbulence in the vanilla market has once again illustrated how finite an amount of vanilla there is, when the vast majority is sourced from Madagascar. How can Symrise overcome this challenge when the clean label trend only continues?

“Consumer demands have driven consistent demand growth for certain fruits, botanicals and indeed vanilla,” notes Schaper. “A key part of the Symrise strategy is working diligently to secure top quality naturals in consistent and secure sourcing arrangements through backwards integration programs.”

“With high vanilla prices, countries other than Madagascar such as Indonesia, India and Uganda step up their production, but there is always a delay between the demand growth and the supply growth,” he continues. “The only difference is that Madagascar, Reunion and Comoros can claim “Bourbon” quality standard, whereas the other countries produce natural vanilla extracts. Madagascar currently accounts for around three-quarters of the natural vanilla bean production, so any interruption in supply produces challenges.”

“Vanilla grows very slowly from the planting of the vines and it can take up to three years until the first harvest. Nevertheless, some of the increase in planting has already taken place two years ago, so we are waiting patiently,” he adds. 

Still, Schaper is very confident for the outlook of the flavors sector as a whole. “We believe that the future looks positive, he says. “The market continues to grow at around 3 percent and when you look at changing consumer habits in fast growing population countries such as Indonesia, they are increasing their consumption of pre-prepared foods.”

“In Africa, there is huge potential in beverages, as the urbanization continues. If you look at the high-growth countries in terms of GDP and population, they provide a very healthy growth for the flavor industry. That is why Symrise is focusing on the high-growth countries like China, Pakistan, Bangladesh and Indonesia,” he explains. “This is why we have assets on the ground to ensure that we can provide for our customers there, as well as for sustaining our business performance in the future. We are just breaking ground on a new state-of-the-art plant in China. We have increased our production and development capabilities in Indonesia and opened a new state-of-the-art research facility in Singapore, allowing us to deliver first class service to our customers in the Asia-Pacific region,” Schaper finalizes. 

At FiE 2017 in Frankfurt at the end of this year, Symrise will present a new platform around naturalness, based on the incorporation of the Diana portfolio. “When I look at the cross-disciplinary areas that we are conducting, we will be coming up with a new platform on naturalness, which is more than just clean label – it is about making the most of nature’s biodiversity. We understand nature at a molecular level and are combining this with state-of-the-art processing and isolation capabilities. We will be able to offer new food solutions with distinctive signature flavor notes,” Schaper says. 

“For example, rather than just an onion or garlic ‘flavor,’ we will provide products with the same intensity and cost-in-use, which are called ‘fried onion oil’ or ‘fried garlic oil,’ which is an accurate and more consumer-friendly descriptor for our customers to put on the label of their savory products. We will be explaining and displaying some of that at FiE later this year in Frankfurt. There will also be products to come beyond savory, but also in the meat and fruits area. But the current focus is on savory; and meat and vegetables in particular. We will also be launching highly sophisticated and authentic botanicals that are easy to use, which serve as extracts rather than flavors. We are moving beyond clean label in, it is really about unlocking naturalness, authentic great taste, transparency and sustainability,” he notes.

The September issue of The World of Food Ingredients will feature a detailed interview with Heinrich Schaper. A podcast can be found here. 

By Robin Wyers & Elizabeth Green