F&F Vertical Expansion
Editorial Advisory Board
President and CEO,
Flavor Dynamics, Inc.
Ph.D., Independent vanilla and
Independent flavor consultant
BRIAN M. LAWRENCE
Natural Products Editor,
Perfumer & Flavorist magazine;
Journal of Essential Oil Research
Senior flavorist, Abelei Flavors
President, Leslie C. Smith
Regulatory affairs manager,
FONA International, Inc.
Independent flavorist and author
Creative perfumer, Seven Scent
It seems the only way to go is up in F&F expansion. We’re seeing companies driven by a desire to be vertically integrated, whether through ingredients or applications, or both. Our feature article this issue will present the current state of
M&A affairs in the F&F industry (page 26). What are the key challenges of
understanding M&A dynamics, and its effects? And can smaller companies
compete with the big 10 in the applications business?
Access to raw materials, capital pressures and competitiveness by the top
four companies are key drivers for smaller companies to sell. The biggest
trend is the acquisition of smaller companies that offer complementary
production capabilities or services for larger companies. This way, the more
niche and specialized companies have entrance into a regulated environment
with commercial production capabilities; whereas the larger counterparts
can now fine tune its production of a particular ingredient based on the
smaller company’s area of expertise (think Symrise’s fine tuning of menthol
when it acquired Pinova in 2015).
M&A activity is certainly not what it used to be with factors such as
supply chain transparency, evolving consumer preferences, stricter regulatory requirements (including safety testing, page 50) that drive companies to
look outside of its normal offerings, rather than expanding organically.
I hope you enjoy this issue. Happy learning to you.
With warmth from New York City,