Saturday, July 13, 2002

Takeover makes firm tops in flavor


Adding Nestle unit made Givaudan industry leader

By Mike Boyer, mboyer@enquirer.com
The Cincinnati Enquirer

        Givaudan SA., the Swiss flavor and fragrance maker whose North American flavor business is in Bond Hill, will go to the ends of the earth to find new tastes and aromas — literally.

[photo] Bob Pellegrino, in the flora-filled atrium of his company's Bond Hill facility, sees only growth for Givaudan Flavors.
(Michael E. Keating photos)
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        The company's researchers and flavorists regularly trek to remote places such as Gabon in Central Africa in 1999 and the rain forests of Madagascar last fall to find new flavors and fragrances among the flora and fauna.

        So it's no surprise the company, which employs more than 600 in Greater Cincinnati, jumped at the opportunity to bolster its flavor operations last year by acquiring Nestle's Food Ingredients Specialties unit.

        The acquisition, completed in May, increases the size of Givaudan's flavor business to more than $1 billion, overtaking the flavor business of industry leader International Flavors & Fragrances Inc., says Bob Pellegrino, president of Givaudan's North American flavors business.
       

Bond Hill jobs

        For the Bond Hill facility, which is the worldwide center for Givaudan's basic flavor research, the acquisition will mean the addition of up to 40 jobs as Givaudan relocates most of Nestle's flavor researchers here.

        “We're already looking at whether we need to do another expansion,” Mr. Pellegrino said of the Bond Hill research facility, on the TechSolve campus which has been expanded twice since Givaudan acquired the former Tastemakers facility in 1997.

        Givaudan, which was spun off as a separate public company by Roche in 2000, has invested more than $40 million in two expansions of the facility, which now employs about 340. Givaudan also employs about 260 at its Carthage flavors plant, west of Interstate 75, which produces spray-dry flavors for powders, desserts and cake mixes and another 40 at its savory flavors plant in Devon in Northern Kentucky.

[photo] The Virtual aroma synthesizer mixes ingredients to create what the customer wants. Flavorist Yuangang Zhang operates the high-tech mixer, which was created for Givaudan.
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        Besides acquiring Nestle facilities in Solon, Ohio, and New Milford, Conn., and continuing to supply Nestle with flavors, the acquisition spices up Givaudan's expertise in the so-called savory flavors area — meats, snacks, soups and sauces.
       

Taste all in the mouth

        Givaudan's savory expertise is what's known as “base notes,” the tastes that gives foods their basic mouth feel such as chicken versus beef. Nestle's expertise is in the “top notes,” that differentiate between, say, roast chicken and barbecue chicken, Mr. Pellegrino said.

        “We see savory as a growth opportunity,” he said, adding that Givaudan sees it as a $1 billion global market, growing about 5 percent a year.

        Givaudan, which had worldwide flavor and fragrance revenues last year of about $1.5 billion — about equally divided between the two categories — won't forecast future sales, but has indicated it wants to grow about twice as fast as the industry's 2 to 3 percent annual rate. Mr. Pellegrino said the savory flavor market is being driven by demand for convenience and easy meal preparation not only in North America but around the world.

        “There are more single-parent homes and dual-income families where time is a premium,” he said. “Most grown-ups were raised on home cooking and they desire that taste.”

        The growth in ready-to-eat foods in grocery chains as well as food service for restaurants is fueling more demand for ingredients with these flavors.
       

One-stop flavor shop

        The combination of Nestle's and Givaudan's flavor expertise “offers our clients a complete (flavor) profile,” he said. “We're now a one-stop shop.”

        That's important because food manufacturers are introducing new products and entering new markets much faster than in the past.

        “They rely on us to do product development for them more than ever before,” he said.

        Givaudan is using a high-tech solution to creating new flavors and fragrances for its customers.

        Called the Virtual Aroma Synthesizer (VAS), the system allows Givaudan flavorists to combine up to 20 different ingredients by mixing and matching client likes and dislikes.

        The VAS remembers the formulations, allowing Givaudan to recreate them for the customer.
       



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