The four giants of flavors and fragrances take over half of the country

　　IHS Markit's recently released Specialty Chemicals Industry Overview shows that thanks to industry mergers and acquisitions, the four giants of Givaudan, International Flavors & Fragrances (IFF), Symrise and Firmenich have collectively created 50% of global sales in the flavors and fragrances (F&F) industry. According to IHS Markit, Givaudan was the world's largest producer of flavors and fragrances (F&F) in 2019, with a market share of about 16%, followed by IFF, Firmenich and Tokushin. A recent report by Bernstein Research in the United Kingdom shows that in 2020, Givaudan's market share is still expanding, and Dezhixin has lost some of its market share, and IFF has basically maintained its share. Firmenich has not released the relevant data. According to market participants, the market share of the four giants may continue to expand.

　　Givaudan recently announced that sales in 2020 increased by 1.9% to CHF 6.32 billion. The company has seen growth in most product areas and regions, particularly in the areas of home, health and personal care, packaged foods and nutraceuticals. The company said sales in its daily fragrance business increased by 4.5 percent to CHF 2.92 billion, mainly due to strong sales growth in consumer goods, offsetting the negative impact of the COVID-19 pandemic on sales of fine fragrances and beauty active ingredients. According to Givaudan's 2025 development strategy, the company aims to achieve organic sales growth of 4% to 5% on the basis of the same kind. Bernstein predicts that the company's organic growth rate in 2021 will be at the lower level of its 5-year guidance, at 4.3%.

　　Dezhixin said that the company achieved an organic increase in sales of 2.7% in 2020, which is slightly lower than the target growth rate of 3% to 4%. Due to the cybersecurity attack in mid-December 2020, the business operation was temporarily seriously disrupted, which affected the sales business. "In the market environment fully affected by the new crown pneumonia epidemic, Dezhixin has maintained a very stable performance." Heinz-Jürgen Bertram, CEO of Tokuyukina, said, "We maintained a good operating performance until mid-December 2020, during which time we were the target of cybersecurity crime attacks. Our business operations are sometimes severely constrained, so we can't fully achieve our growth goals. Bernstein said the cyberattack cost 35 million euros ($42.4 million) in sales in the fourth quarter, but expects sales to recover growth of about 10 percent in the first quarter of 2021.

　　Andreas Fibig, Chairman of the Board and Chief Executive Officer of IFF, said: "While the challenges and complexities of COVID-19 remain, we expect results in 2020 to exceed our expectations. IFF's merger with DuPont's Nutrition and Biosciences (N&B) businesses creates a global ingredient and solutions leader in the food and beverage, home and personal care, and health end markets, with combined sales revenue expected to exceed $11 billion in 2020. Bernstein said the portfolio of IFF and DuPont Nutrition and Biosciences (N&B) gives the combined company a leading position in the taste, odor, nutrition, enzymes, cultures, soy protein and probiotic ingredient categories. IFF said that after the merger is completed, it expects the annual sales growth rate of the new company to reach 4% to 5% by 2023, achieving a cost reduction of $300 million and a revenue synergy of $400 million.

　　According to IHS Markit, mergers and acquisitions are the main reason why Givaudan, IFF, Firmenich and Takshin account for nearly 50% of sales in the flavors and fragrances industry. The merger of IFF and DuPont Nutrition and Biosciences (N&B) is the latest example of an acquisition by a flavor and fragrance company to expand its growth market and meet consumer demand for natural flavors and fragrances. IHS Markit noted that despite the non-stop mergers and acquisitions in the sector, the flavors and fragrances industry is still relatively fragmented, with many players still operating small family businesses in a single region and focusing on certain market segments. The major leading flavor and fragrance companies are headquartered in Western Europe, the United States and Japan. IHS Markit said chinese and Indian flavor and fragrance companies still have a small market share at the moment, but their position on the global stage is increasing and will continue to challenge the traditional dominance of Western European, American and Japanese companies.