Across the chemical enterprise, companies have been reporting punishing, double-digit drops in sales and earnings as the COVID-19 pandemic caused demand for their products to dry up.
But the news from the industry’s flavor and fragrance corner is different. At two leading players—Givaudan and Symrise—both sales and earnings were up, and sales fell only modestly at International Flavors & Fragrances. It turns out that demand for the consumer products their ingredients go into has held up during the pandemic—and in many cases has even grown.
Givaudan, a Swiss firm that calls itself the world’s leading provider of flavors and fragrances, says its sales in the first half of 2020 rose 4.0% to about $3.5 billion. Like most Swiss companies, Givaudan reports half-year rather than quarterly results.
In Givaudan’s fragrance division, sales of consumer products rose 11.8% in the first half, driven by COVID-19-related buying of household goods. In contrast, sales of fine fragrances dropped 16.4% as both traditional and travel-related retail channels closed.
At Symrise, sales increased 4.6% in the second quarter and 3.4% in the first 6 months of 2020. Sales of fragrances for consumer and oral-care products were strong in the first half. On the other hand, the firm experienced reduced demand for sun-protection products—due to a drop in travel to vacation spots.
Sales were basically flat on the flavor side of Symrise’s business. Within the segment, the trend toward cooking and eating at home spurred demand for savory ingredients, while reduced out-of-home eating and drinking lowered demand for beverage ingredients and sweets.In contrast,
International Flavors & Fragrances didn’t manage to post growth. IFF’s second-quarter sales totaled $1.2 billion, a decline of 7%, mainly because sales in its fine fragrance and food service businesses plummeted a combined 38%.
IFF says July was an inflection point, with a small sales increase, but the company remains cautious. “The environment is volatile, and much uncertainty remains about the duration and impact of the pandemic,” CEO Andreas Fibig said in announcing results.