Consumer demand for natural ingredients is spurring deals in the flavor and fragrance industry. The ingredient supplier Firmenich has agreed to buy a 17% stake in Robertet, a French natural ingredient company. Separately, the chemical maker BASF has acquired Isobionics, a biotech firm focused on aroma chemicals, and is partnering with the biotech firm Conagen to offer natural vanillin.
Firmenich bought its shares in Robertet from the private equity firm First Eagle Investment Management. Control of Robertet remains in the hands of the founding Maubert family. But Firmenich said it is interested in buying a larger—or even a controlling—stake.
Firms like Firmenich that sell raw materials to the food and cosmetics industries are increasingly being asked to supply natural ingredients. Firmenich’s deal for the stake in Robertet is only its latest move to capture more of the naturals market. Last year, the Swiss firm bought New Jersey–based Natural Flavors, a supplier of organic food ingredients.
Meanwhile, demand for synthetic ingredients has plummeted in recent years, as marketers at many brand firms “no longer want to use artificial flavors at all,” says John Leffingwell of the flavor and fragrance consulting firm Leffingwell & Associates.
BASF is a leading supplier of synthetic aroma ingredients, and its purchase of Isobionics heralds its entrance into the natural flavor and fragrance market. Isobionics brings fermentation-based production of the grapefruit essence nootkatone and the orange flavor valencene. BASF’s deal with Conagen, meanwhile, brings fermentation-derived vanillin, the main flavor and scent component of vanilla.
By turning to biotechnology, BASF can address a gap in the market between scarce and costly plant-derived flavors and fragrances and cheaper but unpopular synthetic versions, according to Kantha Shelke, principal at the food science and research firm Corvus Blue. But food companies are more likely to use the biotech versions in new products than in existing flagship brands “because consumer noses know the difference and will call them out,” she says.
Last year, Firmenich signaled its own interest in biotech ingredients by buying Senomyx. Before the deal, Senomyx said it was working on a fermentation method to make a high-intensity sweetener called siratose, which is more commonly extracted from monk fruit grown in China.