Flavour firms find success in emerging markets, despite cost pressures

09-Nov-2011 - Last updated on 13-Mar-2017 at 09:37 GMT

Related tags Raw material Foreign exchange market

Global flavour and ingredients firms Symrise and IFF have both reported strong growth in Q3 results, especially in emerging markets, despite increasing financial pressures from increasing raw material costs.

Flavour giants International Flavors & Fragrances (IFF) and Symrise, today filed third quarter results reporting strong results in emerging markets, and stability in established markets despite further economic slowdown and sustained high raw material prices.

IFF results

"The Flavours business continued to gain market share led by our innovative health and wellness portfolio and double-digit growth in the emerging markets,” said Doug Tough, chairman and CEO of IFF.

IFF reported that local currency sales in Q3 increased by 8%, with double-digit growth in emerging markets continuing to drive results. “In the developed markets, growth in North America was once again the strongest, led by several health and wellness initiatives,” said the company.

The company added that its savoury and beverage divisions were witnessing particular success, with savoury applications continuing double-digit growth for the fourth consecutive quarter, whilst beverage growth was reported to be in the high single-digits for the eighth consecutive quarter.

"Despite the challenging economic conditions, we continue to believe we can deliver adjusted operating profit growth above our long-term targets driven by our efforts in pricing, the benefit of previous restructuring activities, and cost control initiatives," he added.

Symrise success

Dr. Heinz-Jürgen Bertram, CEO of Symrise AG explained that although market dynamics have continued to slow in the third quarter due to reduced economic prospects and continuing tension on the raw material and foreign exchange markets, the company has made “notable gains in our business with global customers.”

The global flavour and ingredients firm reported that its Flavour & Nutrition division grew sales by around 2% to €596.6 million in Q3 – corresponding to a 3% growth at local currency sales – adding that emerging markets accounted for 46% of total sales.

Symrise said that Flavour & Nutrition continued to perform well, posting gains of 7% sales from global customers, however the company said that these earnings were negatively affected by sustained high raw material costs and volatile exchange rates.

Total Flavour & Nutrition sales grew by 2% (to € 596.6 million), with the strongest regions of growth seen to be European, Africa, & Middle Eastern (EAME). The company said that beverage applications and consumer health departments had developed particularly well in the region. In Latin America Symrise said it has “benefitted particularly from solid demand for savoury applications and citrus products.”