From iconic tastes to regulations: Givaudan flavour chief shares insights

The number one flavour company in the world, Givaudan reported sales of CHF2135m in 2009 and EBITDA of CHF450m – on a par with 2008 and a very fair result in a year marked by economic upheaval. In the last three years, the company has been bolstered by its acquisition of rival Quest for a massive CHF2.8bn.

“It’s been a very successful integration process for us,”​ Graber said of the Quest acquisition. “We benefited from the diversity of both companies and we’ve benefited in our strategic imperatives. For example developing markets is a large opportunity for us. ​

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“The Quest footprint helped us reinforce our position in developing markets – India, Indonesia, South Africa being the examples.” ​

He added that the acquisition has also reinforced Givaudan’s technological capabilities, For example, in flavour delivery it has combined Quest and Givaudan technology to develop a new platform called Pure Delivery.

People, too, have been a big part of the process. “I think we’ve successfully integrated the talents of both companies in a way that we engage our customers, engage our suppliers and engage our people in the concept of having great passion for working with the sense of taste.”​

Graber agreed that there could be more opportunities for strategic bolt-on acquisitions in the future – indeed, acquisitions have been fundamental to putting Givaudan at the top of the flavour industry charts, as today’s company is the product of some 20 acquisitions throughout its history.

“Right now with our market share I would not see us making necessarily a large market share acquisition. I think we have the size and scope to differentiate in the industry. But in our areas of strategic focus, if specific acquisitions came up, we would definitely consider that.”​

Strategic priorities ​

Amongst the areas of strategic focus are the eight ‘icon’ flavours that Givaudan has identified as being instrumental for food manufacturers to differentiate their products and garner “connectivity of their brand to the consumer”.​ These are: Cheese/dairy, citrus, coffee, tea, chicken, beef, mint and vanilla.

“My concept of signature flavours is working very close with our customers to develop flavours that engage the customers with their brands”. ​

Givaudan’s approach is to use both artistry and technical capabilities – its in-house chefs and flavourists work very closely together, but the company puts a lot of store by consumer understanding. While food manufacturers do a lot of research on consumers, from the moment of purchase to the moment of consumption, a flavour company comes in when it comes to taste preference.

“When I talk about consumer understanding it’s about the drivers of flavour,”​ said Graber. “What makes a consumer tick, and what makes them prefer a specific flavour in a specific application.” ​

While there are some over-arching elements of preference that can be global or regional, to a large extent flavour remains local, he added, so Givaudan goes into the key markets and strives to understand preferences for a food in a specific market. It then researches molecules and finds ways to replicate taste preferences in flavours.

Healthy business​

Another big driver is health and wellness. As food manufacturers are striving to reduce fat, sugar, salt and additives in their products, it’s down to the flavour companies to come up with ways to make sure the healthier products still taste good.

In salt reduction, for instance, Graber explained: “For a long time companies were working on how do I make this taste as a full salted product with lower salt. We have moved beyond that. We have moved into resolving the following problem: How do you reduce salt and deliver a great tasting product?”​

In fat reduction, the challenge is to bring back the mouthfeel, or “fattiness perception”,​ in low fat foods.

Clean label is also a big deal for food manufacturers, as consumers are wary of long additive lists. This is an area that Givaudan has tacked in its work on umami – the so-called fifth taste – so it can give the option of more succulent flavours without the use of ingredients that have a negative ring with consumers, such as monosodium glutamate.

Regulations​

The regulatory scene for flavours around the world is changing, and Graber said this is not only in Europe, but there are shifts in developing countries too.

“The developing markets are becoming more important so you will see for sure evolving regulations in the BRIC countries,”​ [Brazil, Russia, India and China]. He also identified the so-called MIST countries – Mexico, Indonesia, South Africa and Turkey – as places to watch.

“I think engagement by the associations of the flavour industry, working with all the stakeholders – government offices, customers, and consumer groups – will make sure good regulation services the needs of society… It should help governments ensure there is proper regulation to food and safety and it should help customers and the flavour industry to have a competitive landscape.” ​

In particular, he said the definition of ‘natural’ is an important matter, especially in Europe. More broadly, he said a strong science programme is important to ensure there is a globally approved palate of ingredients used in flavours; and associations such as IOFI (the International Organization of the Flavor Industry) have an advocacy role to play, “in making sure that we engage and are actively working with the regulators in drafting regulation that is effective for all the stakeholders.” ​

Jess Halliday interviewed Mauricio Graber at Givaudan’s headquarters in Switzerland, and her visit was funded by Givaudan. ​