BASF closes acquisition of vegetable seeds business from Bayer

Today, BASF closed the acquisition of Bayer’s global vegetable seeds business, mainly operating under the brand Nunhems®. The transaction adds a well-recognized brand with a very successful business track record to BASF’s portfolio. The acquired vegetable seeds business comprises 24 crops and about 2,600  varieties. It also includes well-established, strong R&D and breeding systems with over 100 unique breeding programs in more than 15 crops. The addition of the vegetable seeds business enhances BASF’s global offer to farmers. It strengthens BASF’s seed platform and complements the recently expanded Agricultural Solutions portfolio, which includes seeds and traits, chemical and biological crop protection, soil management, plant health, pest control and digital farming. This closing completes BASF’s acquisition of a significant range of businesses and assets with combined 2017 sales of €2.2 billion, which Bayer offered to divest in the context of its takeover of Monsanto. The all-cash purchase price amounts to a total of €7.6 billion, subject to certain adjustments at closing.

ADM Opens Technical Innovation Center in Shanghai

State-of-the-art facility to support development of innovative, on-trend, nutritious products to meet growing food and beverage demand in Asia-Pacific SHANGHAI--(BUSINESS WIRE)-- Archer Daniels Midland Company (NYSE: ADM) today celebrated the opening of its new regional office and state-of-the-art flavor and ingredient creation, application, development and customer innovation center in Shanghai, China. The opening of the space was announced at a dedication and ribbon-cutting ceremony. “With today’s busy lifestyles, people are turning to healthier eating habits, accelerating changes in consumer tastes and preferences at an unprecedented rate. For ADM, Shanghai has played a critical role in our continued growth and innovation. To help Asia-Pacific food and beverage customers remain a step ahead, we’re excited to leverage our technology, expertise and global scale,” said Donald Chen, ADM’s president, Asia. Shanghai’s technical innovation center will enable ADM to work closely with customers to create complete flavor and specialty ingredient solutions. It will be staffed by a team of food scientists, flavorists and applications experts, along with sales, marketing and regulatory personnel. The new Shanghai facility joins our recently opened Singapore Innovation Center in helping ADM meet growing demand in the region. “Around the world, ADM continues to invest to ensure that we are the go-to solution providers for clean label, sustainable ingredients and great taste,” said Vince Macciocchi, president of ADM’s Nutrition business. “This new facility enhances our portfolio and capabilities ensuring our customers meet consumer demands for new, innovative food and beverages.” The new innovation center features a wide range of capabilities, including a food and flavor analytic lab; beverage and dairy applications labs and pilot plants; a bakery lab; a confectionery and personal care lab; a culinary kitchen; flavor creation labs; sensory evaluation facilities; and a customer innovation center. China is home to approximately 675 ADM employees, with application labs in Beijing, Shanghai and Guangzhou; a flavor production facility in Beijing; sweeteners and soluble fiber complex in Tianjin; animal nutrition facilities in Dalian, Tianjin, Nanjing, Zhangzhou and Xiangtan. ADM has more than 1,000 employees throughout the wider Asia-Pacific region, where the company operates a wide range of processing facilities, including several animal feed facilities; a flavor and ingredient facility; food and flavor labs in Japan, Singapore and Australia; and sales offices in every major market in the region. Source: ADM

ADM Strengthens Global Footprint with Acquisition of Brazilian Oilseeds Facilities

Addition of Algar Agro plants in Uberlândia and Porto Franco enhances ADM’s position in important Brazilian meal and bottled oil markets CHICAGO--(BUSINESS WIRE)-- Archer Daniels Midland Company (NYSE: ADM) announced today that it has reached an agreement to purchase certain assets of Brazil-based Algar Agro, including oilseeds processing facilities in Uberlândia in the state of Minas Gerais, and Porto Franco in Maranhão. “ADM is already the most diversified oilseeds processor in the world, and now we are once more expanding our capabilities to help meet growing global demand,” said Greg Morris, senior vice president and president of ADM’s Oilseeds business. “The acquisition of Algar Agro’s crush and refinery plants in Minas Gerais and Maranhão strengthens our position in key Brazilian demand regions, and continues our strategic global growth. We’ve recently launched our new oilseeds joint venture with Cargill in Egypt, and we have completed several enhancements to our European and North American processing operations. With the addition of these new plants in Brazil, we are further enhancing and strengthening our global network at a time when both the near- and long-term outlook for global meal demand continues to be strong. We’re excited about this bolt-on acquisition, and about all of the actions we are taking to deliver on our strategic plan to enhance shareholder value.” Under the terms of the deal, ADM will become owner of integrated crush and oil refining/bottling facilities in Uberlândia and Porto Franco. ADM will also gain access to an extensive network of origination and storage silos throughout northeastern and southeastern Brazil. “Demand for meal and bottled oil in the northeast and southeast regions of Brazil continues to grow, and we are excited to expand our capabilities there,” said Domingo Lastra, ADM’s president, South America. “We’re looking forward to working with the great Algar Agro team, not to mention customers throughout both regions, as we continue to provide the highest quality meal and oils.” “This deal represents an important step towards the implementation of Algar Group´s portfolio and capital allocation strategy,” said Luiz Alexandre Garcia, CEO, Algar Group. “In the Agribusiness sector, we are exiting the soybean crushing and trading segment and focusing on grains production (Algar Farming). We also are strengthening our position in the Information & Communications Technology (Algar Telecom and Algar Tech), Tourism & Entertainment (Rio Quente Resorts and Costa do Sauipe) and Renewable Energy sectors (Alsol). We firmly believe that ADM was the best partner to engage with and execute this transaction, given the long term relationship we have with ADM and its distinctive capabilities and leadership in the Agribusiness sector.” ADM’s current Oilseeds operations in Brazil include soy processing plants in Rondonópolis, Campo Grande, Ipameri, Joaçaba and Uberlândia; a sunflower plant in Campo Novo dos Parecis; biodiesel refineries in Rondonópolis and Joaçaba; and a network of storage facilities with a total capacity of 2.2 million metric tons. The company produces and sells the Concórdia™, Corcovado™ and Vitaliv™ brands of cooking oils. The deal, which requires Brazilian regulatory approval, is expected to close by the end of the year. When the transaction is complete, Algar Agro’s approximately 400 employees will transfer to ADM. Forward-Looking Statements Some of the above statements constitute forward-looking statements. ADM’s filings with the SEC provide detailed information on such statements and risks, and should be consulted along with this release. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements. Source: ADM

Natural preservatives expansion: Natural Products Canada invests in Chinova Bioworks

Natural Products Canada has invested in Chinova Bioworks, a Canadian company whose mushroom-based natural preservative has previously captured the interest of major food industry partners such as DSM Ventures, Rhapsody and AgFunder. “Chinova has discovered a unique solution to create a clean label, natural preservative that meets the demands of industry and consumers,” says Shelley King, CEO of Natural Products Canada. “We are thrilled with the progress they’ve made since we started working with them 18 months ago, and we’re proud to participate in this investment round with DSM Ventures, AgFunder and Rhapsody.” “There is a tremendous opportunity right now in Canadian technology and innovation. Canadian research institutions and the country’s longstanding agricultural focus have created an abundance of highly applicable innovations to the food/ingredient/processing industry. Chinova is a great example, meeting a big need for natural ‘clean label’ preservatives. But we’ve also just witnessed the acquisition of Mazza Innovation by Sensient Technologies. Mazza’s advanced botanicals extraction technology met a global need. The quality of these companies and their products and technology, coupled with the supportive national commercialization network is making a lot of people sit up and take notice of Canadian opportunities,” King tells FoodIngredientsFirst. Chinova, based in Atlantic Canada, is focused on the development of natural preservatives using mushroom chitosan, a natural fiber whose antimicrobial properties are effective against a broad spectrum of microorganisms. “We are pleased to have NPC as a part of this seed round,” says CEO, Natasha Dhayagude. “The valuable business, technical and financial assistance we’ve received from them has been instrumental to our early success in the market.” Chinova’s technology, coupled with their ambitious plans for growth, made them an ideal client for NPC’s full range of services, including business and technical advisory services and connections to industry resources, according to Natural Products Canada. “It’s been a pleasure to help Chinova navigate the ecosystem and grow their business to the point where it was able to attract such high caliber investors,” notes Stephen Ball, Regional Director for Natural Products Canada. “Their scientific acumen, desire to grow, and ability to attract and retain strategic industry mentors puts them in good standing for future growth.” NPC started its investment fund in 2017 to help Canadian natural product companies achieve their full commercialization potential. To date, it has made four investments and experienced one exit. Along with financial investment and business advice, NPC connects high-potential Canadian companies like Chinova to Canadian and international investors through personal introductions and strategic investor events and meetings. Last month, FoodIngredientsFirst reported how Sensient is eyeing the newly acquired botanical extraction company Mazza Innovation as a strategic pillar for all of its business operations, including colors and flavors. Presented under the new name of “Sensient Natural Extraction” and continuing to operate out of Canada, the new business unit provides a clean extraction opportunity for Sensient Technologies Corp. The acquisition is expected to offer opportunities in sustainability, cost reduction and clean label, as the entire botanical being used can be broken down and distributed among the diverse companies that comprise Sensient.   source: http://www.foodingredientsfirst.com

NTU scientists develop ‘natural’ food preservative

A team of scientists from Nanyang Technological University (NTU) has developed a plant-based food preservative that is said to be more effective than artificial ones. The result is healthier food that stays fresh longer, said NTU on Thursday (Aug 16). Researchers found that by adding genes of a plant to baker’s yeast, it produces natural preservatives with antimicrobial and antioxidant properties – two key elements of preservatives that prevents bacteria growth. “This organic food preservative is derived from plants and produced from food-grade microbes, which means that it is 100 per cent natural and more effective than artificial preservatives,” said Professor William Chen, director of NTU’s Food Science and Technology programme. NTU said tests carried on meat and fruit juice showed that the natural preservative kept samples fresh for two days without refrigeration. On the other hand, the samples with artificial food preservatives became contaminated with bacteria within six hours. The study comes amid growing scrutiny on the health risks of consuming food, especially meat products, with artificial preservatives. The American Academy of Pediatrics, for instance, expressed concern last month about chemical preservatives such as nitrates and nitrites, which it said can interfere with thyroid hormone production. The chemicals have also been linked to gastrointestinal and nervous system cancers. NTU said its team of scientists is in talks with multinational companies to further develop the new food preservative, and hopes that it will be available commercially within two years. “This may open new doors in food preservation technologies, providing a low-cost solution for industries, which will in turn encourage a sustainable food production system that can produce healthier food that stays fresh longer,” said Prof Chen. The team’s findings were published last month in the scientific journal Food Chemistry.   source: https://www.channelnewsasia.com

Strong organic growth of 9.0 % in the first half of 2018

Following a dynamic start to the year, Symrise AG accelerated its organic growth course in the second quarter. All segments and regions contributed to this positive development. Group sales rose significantly by 9.0 % in the first half of 2018. Taking into account portfolio and exchange rate effects, sales grew by 4.0 % to € 1,575.5 million (H1 2017: € 1,515.3 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to € 317.1 million (H1 2017: € 322.9 million). The EBITDA margin remained at a good level of 20.1 %. Against the background of this positive business performance, Symrise is refining its outlook for 2018: The Group now expects an increase in annual sales above the medium-term target corridor of 5 to 7 %, thereby growing significantly faster than the market. “Symrise took advantage of the momentum in the second quarter and significantly expanded business in all segments. Our comprehensive backward integration is proving to be a great asset. Also with a shortage of certain key raw materials for fragrance compositions, we were able to supply our customers reliably,” said Dr. Heinz-Jürgen Bertram, CEO of Symrise AG. “We are moving into the second half of the year from a strong position. Targeted investments in research and development, sales strength and capacity expansions are driving our growth. Therefore, we are raising our sales forecast for the current fiscal year: We expect organic growth above our medium-term target corridor of 5 to 7 % and will therefore significantly exceed market growth.”   High demand in all segments and regions In the first six months, Symrise AG increased its organic sales by a strong 9.0 %. The second quarter was particularly dynamic with double-digit sales of 10.6 %. Symrise is therefore once again one of the fastest-growing companies in the industry. All segments and regions contributed to this positive business performance. Considering portfolio effects, such as the contribution from the recently acquired companies Cobell and Citratus, and exchange rate effects, sales grew by 4.0 % to € 1,575.5 million (H1 2017: € 1,515.3 million). As in the previous quarter, sales trend in reporting currency was impacted by unfavorable exchange rates, in particular by the appreciation of the euro against the US dollar. As before, Latin America was the key growth driver at the regional level. During the reporting period, the region recorded organic sales growth of 16.1 %. In the second quarter, growth reached even 20.2 %. The Asia/Pacific region sales grew by 12.3 % in the first half of the year, followed by EAME and North America with growth rates of 7.4 % and 5.2 %, respectively. In Emerging Markets, Symrise increased sales by 12.8 %. These markets, which are characterized by dynamic growth, contributed 43 % to total sales.   Profitability remains strong within challenging environment In the first half of 2018, Symrise generated earnings before interest, taxes, depreciation and amortization (EBITDA) of € 317.1 million (H1 2017: € 322.9 million). In addition to higher raw material costs and unfavorable exchange rate effects, this slight decline also reflects increased investments in strategic growth projects. With these expenses too, Symrise maintained a very good profitability. The EBITDA margin was with 20.1 % at a good level (H1 2017: 21.3 %). Net income for the period grew to € 142.3 million (H1 2017: € 141.8 million). Earnings per share rose slightly to € 1.10 (H1 2017: € 1.09).   Solid capital resources Cash flow from operating activities for the first half of 2018 of € 151.3 million was € 23.7 million lower than in the previous year (€ 175.0 million). The reason for the decline is an increase in working capital due to the high growth dynamics and the associated increase in inventories alongside higher raw material costs. Net debt amounted to € 1,514 million (31 December 2017: € 1,398 million). The ratio of net debt to EBITDA amounted to 2.4 (31 December 2017: 2.2). With an equity ratio of 37.0 %, Symrise has a solid capital base to continue driving the future business development forward in a sustained manner.   Scent & Care segment In a challenging environment, the Scent & Care segment achieved strong organic growth of 10.1 % in the first half of the year. In this continuing tense situation of the raw material markets, especially with the supply of important aromatic substances, the segment sustained the dynamic development from the previous quarter and grew by 13.6 % between April and June. Taking into account negative exchange rate effects and the portfolio effect from the acquisition of Citratus, the segment increased sales by 3.4 % to € 660.1 million (H1 2017: € 638.2 million). Growth was driven by the Cosmetic Ingredients and Aroma Molecules divisions. Each posted organic double-digit sales growth rates. The Fragrance business also developed positively and achieved a good single-digit growth rate. The second quarter was also marked by failure to deliver raw materials of some suppliers and an overall rise in price level. Scent & Care again benefited from its comprehensive backward integration in fragrances – recently strengthened by the acquisition of Pinova in 2016 – and its mostly own broad raw material base. As in the previous quarter, Symrise was therefore fully capable of delivering to its clients. To compensate for the increased raw material costs, the company is in close dialogue with its customers to actively implement price increases. Also in view of significantly higher raw material prices, which led to cost increases, the segment’s EBITDA of € 127.9 million was on prior-year level (H1 2017: € 128.4 million). Crucial when comparing with the reference period is that it included a one-off gain of € 4.7 million from the purchase price adjustment related to the sale of the Pinova industrial activities. The EBITDA margin of the segment was 19.4 % (H1 2017: 20.1 %). Adjusted for the one-off effect, the EBITDA margin for the same period in the prior year was 19.4 %.   Flavor segment Flavor achieved strong organic sales growth of 10.9 % in the reporting period. All regions and application areas significantly expanded their sales. The segment also benefited from new business with vanilla and the high price level of vanilla applications. Considering exchange rate effects and the Cobell acquisition, the segment’s sales grew by 9.0 % to € 604.7 million (H1 2017: € 554.8 million). In the EAME region, the Flavor segment achieved double-digit organic growth rates. Significant growth impetus came mainly from applications for Sweets and for Savory in Western Europe and Russia. The Asia/Pacific region recorded high single-digit, and for some areas even double-digit, growth rates across all application areas. The markets of China, India, South Korea and Singapore developed particularly well. Latin America also showed a very good development with organic growth rates in the upper single-digit range. Sweets and Savory performed especially well, achieving double-digit growth in Argentina, Brazil and Mexico. The North America region achieved double-digit organic sales growth rates as well and therefore also showed a very positive development. The first half of the year was particularly dynamic in the Beverages application area. EBITDA in the Flavor segment increased in the first half of 2018 by 3.3 % to € 127.0 million (H1 2017: € 123.0 million). At 21.0 %, the EBITDA margin remained at a very good level (H1 2017: 22.2 %).   Nutrition segment Nutrition generated organic growth of 3.6 % in the first six months. This figure reflects the temporarily destocking of one major customer of Probi. Adjusted for this effect, growth in the segment amounted to 7.6 %. Taking into account negative exchange rate effects, sales amounted to € 310.6 million (H1 2017: € 322.2 million). Order intake at Probi is expected to normalize in the second half of the year. The Food and Pet Food application areas each recorded solid single-digit organic growth rates, with particularly high growth rates in EAME, North and Latin America. Aqua benefited from numerous business wins in the EAME and Asia/Pacific regions and achieved a double-digit organic growth rate. Nutrition generated an EBITDA of € 62.2 million in the first half of 2018 (H1 2017: € 71.6 million). The temporary decline mainly reflects the lower sales contribution from Probi and ramp-up costs for the new Diana site in the USA. With all these special effects, the EBITDA margin was at stable 20.0 % (H1 2017: 22.2 %).   Symrise raises outlook for sales growth in 2018 Based on the strong growth momentum of the first six months, Symrise is refining its sales guidance for the current fiscal year: For 2018, the Group expects to significantly exceed market growth, which is expected to range between 3 to 4 %. Symrise now expects sales growth of more than 7 %, and thus above the medium-term target corridor of 5 to 7 %. In addition to good demand, the Group’s organic growth will accelerate primarily as a result of numerous investment projects to expand capacity. In August, for example, the capacity expansion for cosmetic ingredients will be successfully completed in South Carolina. Moreover, the new Diana Food Ingredients site in Georgia will start production in the fourth quarter. Symrise also expects for the second half of the year that the continuing shortage of key raw materials for perfume compositions will not lead to any shortfalls in its supply. Nevertheless, as in the first half-year, higher purchase costs for raw materials are likely. Overall, the Company considers itself well positioned to compensate for market shortages on the basis of its own backward integration. Symrise therefore intends to remain one of the most profitable companies in the industry in 2018 with an EBITDA margin of around 20 %. The medium-term targets through to the end of the fiscal year 2020 remain in effect, including a compound annual growth rate (CAGR) in the 5–7 % range and an EBITDA margin between 19–22 %.   Source: Symrise

Healthy soils are essential to achieve Zero Hunger, peace and prosperity

FAO Director-General urges countries to scale up soils' potential to help address climate change Healthy soils help grow our food, clean our water, store carbon, and reduce risks of droughts and floods. 13 August 2018, Rio de Janeiro - Improving the health of the world's soils is essential to achieve the Sustainable Development Goals, including Zero Hunger and combating climate change and its impacts, FAO Director-General José Graziano da Silva, today told participants of the World Congress of Soil Science. In a video message to the event, which is being attended by more than 2,000 scientists from around the world, Graziano da Silva noted that approximately one third of the Earth's soil is degraded. "Soil degradation affects food production, causing hunger and malnutrition, amplifying food-price volatility, forcing land abandonment and involuntary migration-leading millions into poverty," he said. The FAO The Status of the World's Soil Resources report has identified 10 major threats to soil functions including soil erosion, soil nutrient imbalance, soil carbon and biodiversity losses, soil acidification, contamination, soil salinization, and soil compaction. Graziano da Silva stressed the importance of sustainable soil management as an "essential part of the Zero Hunger equation" in a world where more than 815 million people are suffering from hunger and malnutrition. Soils and climate change "Although soils are hidden and frequently forgotten, we rely on them for our daily activities and for the future of the planet," the FAO Director-General said, underscoring the important role soils can play to support efforts by countries to mitigate or adapt to a changing climate. In particular, he pointed to the potential of soils for carbon sequestration and storage, which has been documented in a global soil organic carbon map released by FAO. "Maintaining and increasing soil carbon stock should become a priority," Graziano da Silva said. He also noted how soils act as filters for contaminants, preventing their entry into the food chain and reaching water bodies such as rivers, lakes, seas and oceans, but that this potential is limited when contamination exceeds the capacity of soils to cope with pollution. Global Soil Partnership In his message, Graziano da Silva pointed to the Global Soil Partnership in which FAO works with governments and other partners to build technical capacity and exchange knowledge regarding sustainable soil management through the Voluntary Guidelines for Sustainable Soil Management. "Let us make make soils a vehicle of prosperity and peace, and show the contribution of soils to achieve the Sustainable Development Goals," the FAO Director-General said. Source: FAO

Fall Armyworm likely to spread from India to other parts of Asia with South East Asia and South China most at risk

FAO offers its expertise to farmers and governments in Asia on best ways to manage the invasive pest Fall Armyworm munching on maize. 14 August 2018, Rome/Bangkok - Fall Armyworm could threaten the food security and livelihoods of millions of small-scale farmers in Asia as the invasive crop-eating pest is highly likely to spread further from India, with South East Asia and South China most at risk, FAO warned today. Recently detected in India - the first time it has been found in Asia - the insect has the capacity to fly over long distances (100 km per night) and ravage crops all year round given the region's favourable tropical and sub-tropical climate, which means there are always crops and weeds around that Fall Armyworm can feed on. Fall Armyworm can eat maize and some 80 other crops, including rice, vegetables, groundnuts and cotton. "Fall Armyworm could have a devastating impact on Asia's maize and rice producers - mostly small-scale farmers who depend on their crops for food and to make a living. This is a threat that we cannot ignore," said Kundhavi Kadiresan, FAO Assistant Director-General and Regional Representative for Asia and the Pacific. In Asia, where small-scale farmers cultivate about 80 percent of the region's farmlands, rice and maize are amongst the most produced and consumed cereals. Over 200 million hectares of maize and rice are cultivated annually in Asia. China is the second-largest maize-producing country in the world, and over 90 percent of the world's rice is produced and consumed in the Asia-Pacific region. Native to the Americas, Fall Armyworm has already spread across Africa where it was first detected in early 2016. By early 2018, all but 10 (mostly in the north of the continent) African states and territories have reported infestations and the pest has affected millions of hectares of maize and sorghum. FAO offers its expertise on sustainable management of Fall Armyworm  Given FAO's knowledge and coordination role towards a sustainable management of Fall Armyworm in Africa, FAO is offering its expertise to famers and governments in Asia who will quickly face decisions about best ways to manage the pest. "Much of what FAO has already done in sub-Saharan Africa to help farmers and governments better monitor and mitigate Fall Armyworm damage can also be applied in Asia. This includes recommendations on pesticide management, monitoring and early warning, and a practical guide for farmers and government extension workers on how to best manage the pest," said Hans Dreyer, Director of FAO's Plant Production and Protection Division. FAO offers its expertise to help farmers and member states in Asia to: Implement the Fall Armyworm Monitoring and Early Warning System (FAMEWS) to monitor, analyse and produce early warnings, including risk to food security; Produce accurate estimates of potential crop-loss, based on the FAMEWS data and estimates of yield loss due to Fall Armyworm; Provide policy and technical advice about best management options for farmers, especially smallholder farmers, including on pesticide management; Rollout a continent-wide programme of farmer education and communication, based on training guides and materials, including locally adapted versions of the Fall Armyworm Farmer Field School Guide and other guidance material produced by FAO; Maintain technical backstopping and coordination efforts at country, sub-regional, regional and global level in order to continue enabling member countries, farmers' organizations and individual farmers to manage the pest. In Africa, FAO took immediate steps as soon as Fall Armyworm was detected, bringing together experts to share knowledge and experiences on sustainable Fall Armyworm management; developing tools (farmers' manual, mobile apps, web-platform, FAWRisk-Map) to build early warning, monitoring and response mechanisms; and supporting countries to mitigate pest damage, develop action plans and policies, and train extension workers and farmers. To date, more than 30 FAO-supported projects have been rolled out in Africa to fight the pest. Source: FAO

Global flavors & fragrances market to reach US$36 billion in 2022

The global flavors and fragrances market continues to show good rates of growth across the various regions, according to IAL Consultants. The company has published the 11th edition of its report on the global markets for Flavors & Fragrances. The total global market reached US$28.2 billion in 2017, an increase of 4.6 percent compared to the previous year and is expected to grow at an average annual rate of 4.9 percent p.a. to reach approximately US$36 billion in 2022. Of the total world market, flavors account for approximately 56 percent and fragrances for the remaining 44 percent. Of the main global regions, the combined flavors and fragrances market is most significant in Asia-Pacific, followed by North America and Western Europe. While the West European and North American markets are quite mature, there is still potential for growth as consumers develop more sophisticated tastes and preferences. There is still plenty of opportunity for growth in the CEE, MEA and Asia Pacific regions, particularly in parts of Africa and Asia where access to processed foods and consumer goods is still growing. The fastest growth rates in the medium term are expected in Asia-Pacific, according to the report. The beverages sector was the largest global end-use market for flavors in 2017 with a share of 33 percent, followed by the dairy industry at 13 percent. Givaudan, IFF, Firmenich and Symrise continue to occupy the top four positions in the global flavors and fragrances market. Their combined sales of compound flavors and fragrances in 2017 represented around 44 percent of the worldwide market. IFF’s intended acquisition of Frutarom, which IAL currently ranks as no. 7 in the world Flavors & Fragrance market, could pose a threat to Givaudan’s leading position, the report notes. The publication of the report comes amid a period of high consolidation within the flavors space. The first six months of 2018 were dominated by the shift in the traditional flavors segment, where major players such as Givaudan and IFF diversify their portfolio to look beyond their core base and target the more holistic concept of taste as opposed to pure flavor. The clean label trend is central to this market dynamic, as Firmenich also looks to this arena with the creation of a Clean Label & Natural platform. In May, IFF agreed to buy Israeli flavors and ingredients company, Frutarom, in a transaction valued at approximately US$7.1 billion. By combining with Frutarom, IFF said it is seeking to accelerate its Vision 2020 strategy to create a global leader in natural taste, scent and nutrition. As the dust settled on the IFF and Frutarom deal, all eyes were on the flavors and fragrances industry, as the company went up against current market leader Givaudan. Givaudan completed the acquisition of 40.5 percent of the share capital of Naturex in March for a total consideration of €522 million. Plans are in place to acquire the whole of Naturex. This transaction is part of Givaudan's 2020 strategy to strengthen its capabilities in natural flavor solutions. Today’s connected world creates an opportunity for new ethnic flavors, street food inspired meals and the revival of culinary classics. Innova Market Insights has reported an average annualgrowth rate of 20 percent in food and beverage launches with global flavors (Global, 2013-2017), with growth in platforms such as chili, herb and floral flavors. In 2017, 23 percent of the new product launches tracked with an ethnic flavor were private label brands relative to 19 percent in 2013. NPD based on world flavor ranges have become increasingly popular and food truck and street food flavors have been a source of inspiration for NPD for retail. According to Innova Market Insight data, there has been a 24 percent growth in food & beverage launches with a food truck or street food claim (Global, 2017 vs. 2016). As the population becomes more diverse, consumers are embracing bold flavors, which were once unfamiliar. Consumers are seeking intense experiences with flavor combinations that challenge the normal level of spiciness. For example, the average annual growth of food and beverage launches with selected chili flavor (Global, 2013-2017) is 59 percent Sriracha chili, 19 percent Habanero chili and 15 percent Chipotle chili. At this year’s IFT Food Expo, in Chicago, Innova Market Insights presented their ethnic flavors trends, amongst others, at their Taste the Trend pavilion.   source: http://www.foodingredientsfirst.com

What Caused IFF's Flavors Segment's Margin to Expand in Q2 2018?

IFF’s Flavors segment in the second quarter International Flavors & Fragrances’ (IFF) Flavors segment saw a fall in its contribution to the company’s overall revenue by 0.2 percentage points in the second quarter. The segment accounted for 49% of IFF’s revenue in the quarter compared to 49.2% in the second quarter of 2017. The Flavors segment reported revenue of $450.54 million in the second quarter, an increase of 8.7% on a YoY (year-over-year) basis. In the second quarter of 2017, the segment reported revenue of $414.3 million. The growth in the segment’s revenue was driven primarily by price increases and higher volume growth across all its categories and regions. North America led this growth at 9% driven by growth in the Tastepoint brand and new business wins in the beverage, dairy, and sweet categories. Latin American revenue rose 8% on higher demand in Argentina and Mexico. The EMEA (Europe, the Middle East, and Africa) region’s revenue rose 5%, while revenue in Asia rose 2%. Segment’s profit and margin The segment reported a net profit of $109.6 million in the second quarter, a rise of 13.2% YoY. In the second quarter, the segment reported a net profit of $96.8 million. The growth in the segment’s profit was driven by higher volume growth and benefits from productivity initiatives. As a result, the segment’s net profit margin expanded to 24.3% in the second quarter compared to 24.2% in the second quarter of 2017, implying a rise of 10 basis points on a YoY basis. Outlook The segment’s revenue could continue its growth trend driven by new business wins. Its profit and margin could continue to expand as a result of continued productivity initiatives.   source: http://marketrealist.com