IFF pads ingredient portfolio, R&D through merger

IFF pads ingredient portfolio, R&D through merger

NEW YORK — A merger has brought more ingredients and more technologies to IFF, which means the New York-based company has more ways to meet customer requests.

International Flavors & Fragrances early in February completed its merger with DuPont Nutrition & Biosciences, a business unit of DuPont. The combined company, called IFF, now offers multiple ingredients such as sweeteners, probiotics, texturants, colors, flavors, preservatives and cultures that may be sold individually or as bundles. IFF holds the No. 1 or No. 2 spot in several core ingredient categories.

“Many customers still want to have just single ingredients,” said Andreas Fibig, chief executive officer, on Feb. 17 during a Consumer Analyst Group of New York virtual event. “We can do it. We can deliver single ingredients, single technology.

“We can do multiple ingredients. We can combine these ingredients and technologies. If you want a potato chip and you want the seasoning and the food protection and the natural color from one supplier altogether in one solution, we can do it. But if you want to have a whole plant-based burger with everything together, the new IFF can deliver it.”

The market for flavors, fragrances and ingredients in general has evolved from a couple of years ago, he said.

“First of all, we see that is very important to be exposed to naturals,” Mr. Fibig said. “We see that you have to be exposed to some of the smaller customers, but also that more and more of our customers are asking us to combine ingredients and technologies or even come up with integrated solutions, and it’s so important that a company like IFF reacts on it and basically goes forward to satisfy all of these customer needs of our big customers and the smaller customers as well.”

IFF now has more than 45,000 customers, with about 52% being large consumer packaged goods companies and the other 48% being mid-sized, small and private label CPGs. Customer overlap was 20% between DuPont Nutrition & Biosciences and International Flavors & Fragrances, Mr. Fibig said.

IFF expects annual revenues of $11.2 billion and annual EBITDA of about $2.5 billion in 2021. Revenue synergies in 2021 should be $20 million in sales and $5 million in EBITDA. Cost synergies are expected to be $45 million in realized savings and $120 million in run-rate savings.

Financial outlooks include 4% to 5% growth in currency neutral organic sales and an EBITDA margin of about 26% in 2023.

IFF now has more than 50 research, creative and application centers, more than 12,000 patents granted and filed, and more than 40 university partnerships.

IFF made a “significant step forward” with the merger, Mr. Fibig said.

“We have a very, very solid R&D organization now together with all the capabilities, which are important for our customers, like biotech, like coming up as the right enabling technologies encapsulation solutions and so on,” he said.