The German chemical giant has acquired Isobionics, an 'innovation leader' in biotechnology serving the global market for natural flavours and fragrances. It has also entered into a cooperation agreement with biotechnology research company Conagen. Financial details of the transactions were not disclosed.
BASF is a leading supplier of synthetic aroma ingredients. The move into naturals is a strategically important step for the group, Julia Raquet, head of BASF’s aroma ingredients unit, told FoodNavigator.
“Within BASF, we have broad experiences in biotech, for example in our human and animal nutrition businesses. However, within our BASF aroma ingredients business, this is the first move towards the natural aroma ingredients sector. So far, we have been developing and producing synthetic aroma ingredients. So, yes, this is a significant strategic decision for us,” she explained.
Through the acquisition and cooperation agreements, BASF will add a number of natural ingredients to its portfolio. Isobionics is a biotech-based aroma ingredients company located in Geleen, the Netherlands. It develops and produces a 'wide range' of natural ingredients with a focus on citrus oil components such as nootkatone and valencene. Meanwhile, through the Conagen tie-up, BASF will be able to serve the market with natural vanillin. The natural vanillin that BASF will initially market is based on ferulic acid sourced from rice and therefore named 'Natural Vanillin F'.
BASF said it would also ‘advance the technology’ for biotech-based aroma ingredients, combining its own R&D experience and market access with the know-how and expertise of Isobionics and Conagen.
Isobionics founder Toine Janssen was upbeat on the prospect that the deal would step-up biotech innovation. “By combining our biotechbased product portfolio and strong development pipeline with BASF’s expertise and its global market reach, we can provide the natural aroma ingredients market with even more innovations – and boost our growth,“ he predicted.
Biotech’s answer to sustainability and quality concerns
BASF said that consumers and its customers are seeking out natural ingredients. However, this trend is seeing natural
resources stretched to meet market demand. Biotech offers a solution, Raquet believes.
“By using biotech innovations in fermentation, highly complex natural ingredients can be produced biosynthetically, providing an efficient and sustainable route of production. Fermentation is an ancient cultural technique well known from processes like brewing beer and baking bread. It uses microorganisms like bacteria or fungi to convert one substance into another,” she noted.
Significantly, products of fermentation are recognised as natural under both US and EU regulations and BASF will therefore be able to produce ‘natural’ ingredients through biotech processes.
“Biotech innovation is not only an answer to a growing customer and consumer demand for natural aroma ingredients, but also eases the constraints of finite natural resources. Various plants that are the basis for natural aroma extracts are rare or even at the brink of extinction, fermentation-based production can have a sustainability advantage over natural extracts,” Raquet claimed.
Biotechnology also offers a solution to quality challenges, which can vary depending on the quality of crop, she continued.
“Most natural aroma ingredients available on the market are sourced from plant materials. Any such natural extract is very much dependent on the harvest quality, which in turn is influenced by [variables such as] weather, harvesting or storage conditions, etc. Natural extracts therefore fluctuate in quality, availability and price.
“With fermentation technology, the production happens in a closed environment, namely a fermenter. We can tightly control all conditions so that the quality of our biotech-based, natural aroma ingredients will be consistent. We can furthermore produce year-round, while natural product availability is often dependent on the harvest season.”
Synthetics still relevant
Given the jump in demand for so-called ‘clean label’ or natural products, does Raquet see a space in the market for the synthetic ingredients that currently make up the bulk of BASF’s sales?
The answer is definitive: “Sure, we do.”
In fact, BASF sees growing demand for both natural and synthetic aromas. “The overall aroma ingredients market is growing for both synthetic and biotech-based aroma ingredients. With our broad portfolio of synthetic and now also biotech-based natural aroma ingredients, our customers can choose exactly the right ingredient covering their current needs and the latest market demands.”
Raquet is bullish on the prospect that BASF will quickly be able to convert the know-how and capabilities it has acquired into the naturals space into sales success.
“We already do have a very broad portfolio of synthetic aroma ingredients. Now we aim to successively expand our natural aroma ingredient portfolio according to our customers' needs. We will leverage the joint know-how in R&D and technology of BASF, Isobionics and Conagen to quickly address these needs – with an attractive biotech-based aroma ingredients portfolio in superior quality,” she told this publication.
Isobionics – and all its employees - will become part of BASF’s aroma ingredients business.