Even though companies have been behaving under the notion that we’re better and stronger together, the pandemic breathed new life into this idea. It remains an undercurrent in a lot of what we experience today – mergers and acquisitions being no exception, as companies become bonded and often strengthened. Whether the intent is to expand reach, grow into new categories and markets, increase market share, support a succession plan, or simply survive in an increasingly competitive world, mergers and acquisitions help keep our economy moving, while keeping the rest of us on our toes. Within the flavor and ingredient industry, we’ve witnessed strategic alliances and consolidations designed to expand portfolios, gain expertise, push innovation and novel technology, and maximize profitability.
Recent M&A Activity
- Robertet acquired Aroma Esencial for their “know-how, a high-end industrial tool for fractionation and molecular distillation, […] and strategic products for fine fragrances.”
- OC Flavors acquired Novotaste for an expanded footprint in Canada and the NE U.S., which includes a test kitchen and sensory lab.
- Batory Foods acquired Tri-State Companies whose 100k ft2 distribution center offers “cutting-edge cold storage solutions” which will help reduce shipping times.
- DSM and Firmenich merger complete
- Doehler and Ixora Scientific entered an investment partnership for taste modulation research
- Univar and Kalsecentered an exclusive distribution agreement in Colombia
- Symrise acquired stake in EvodiaBio
The Upside
If you’re working with a company that acquires additional capabilities, facilities, or ingredients, you may have some unrealized gains
Advantages can include:
- Access to new and specialized expertise
- Access to novel and disruptive technology
- A larger selection of items from an expanded portfolio
- Economies of scale driving costs down
- Increased R&D capabilities
- Supply chain improvements
- Shorter project timelines
The Downside
Disadvantages include:
- Depending on the size of your business and the new entity, it may be harder to get a hold of the best person to deliver the support you need
- Lack of individualized attention to projects, customization, and flexibility
- Increased costs as consolidated financials are evaluated, new pricing strategies roll out, and fewer entities to offer competitive pricing
- Offerings may change as companies evaluate new opportunities and next phase of growth
- Slowed pace may be informed by additional rigor or red tape due to larger size and/or additional policy and process implementation
Have you encountered any challenges resulting from M&A activity of a flavor or ingredient supplier? We’d love to hear about your experience and learnings. Was there more of an upside or downside?
Something to keep in mind when moving forward with the optimization of your current portfolio or expansion into new categories is the value in collaborating with agile partners. As a reliable and responsive supplier of flavors, taste modulation ingredients, and sweeteners designed for our product development team and often distributed directly to other product development teams, Imbibe is focused on maintaining that human connection for every project we touch, whether we’re working with the brand directly, through a co-man, or an ingredient supplier. Don’t get lost in the chaos – with Imbibe’s expert ingredients and guidance, you’ll get great tasting products that fit your planned timelines.
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