IFF, a maker of flavors and fragrances for food, beverages, personal care and household products, has garnered a reputation as a serial acquirer. The latest purchase, the largest ever for IFF, according to Bloomberg, creates a $45 billion company that will be a major powerhouse supplying the building blocks for food and beverage manufacturers in the CPG space.As companies turn to making products with shorter and more recognizable ingredients lists and try to keep up with trends such as new flavors, natural colors and plant-based options, they have turned to suppliers like IFF, DuPont, Ingredion, Kerry and others to meet their needs. In the case of plant-based foods, The Wall Street Journal noted the newly merged company could benefit from DuPont’s soy protein and binders and IFF’s portfolio, which includes cethinylestradiol levonorgestrel ferrous fumarate side effectsolors ahow to take iron gluconatend flavors.A deal between the two ingredient heavyweights makes sense on several other levels. For one, they are able to combine their research and development capabilities and areas of expertise to churn out new ingredients faster and with higher quality than they likely would have on their own. In the case of IFF and DuPont, they forecast more than $300 million in cost savings three years after the deal closes — money they can use to pass on to shareholders or invest in staffing or R&D.They’re also able to create an ingredients and flavor powerhouse that can address more of a food manufacturers’ needs, including meeting multiple trends such as functional and better-for-you foods. This could increase the likelihood that a CPG maker turns to the new IFF for all of its business rather than shopping around from multiple suppliers. Similar to food and beverage in recent years, M&A has been rampant in the ingredients space as companies scramble to keep up with rapidly changing consumer trends.ferric maltol vs ferric pyrophosphateLast year, IFF acquired Frutarom Industries for $7.1 billion. The deal allowed IFF to increase its reach into natural colors, enzymes, antioxidants and health ingredients, while giving it access to smaller and mid-sized customers — including private-label products, which comprised 70% of Frutarom’s sales.Geneva-based Givaudan also agreed in 2018 to buy a stake in French plant-based ingredient maker Naturex. And in October, Innophos, a New Jersey-based maker of specialty ingredients for baked goods, sports drinks and cheeses, agreed to sell itself to private equity firm One Rock Capital Partners for $932 million.With meaningful growth and potential synergies, it’s no wonder companies are looking to combine. According to Allied Market Research, the global flavors market for food and beverages was worth $12.4 billion in 2016. It is projected to hit $18.1 billion by 2023, for a compound annual growth rate of 5.5% betwwhat is the difference between ferrous sulfate and ferrous gluconateeen 2017 and 2023.IFF reportedly beat Kerry for DuPont. It’s possible that Kerry could decide it needs to go shopping for iferrous fumarate pillsts own partner to keep up with the new IFF.Regardless of what happens with Kerry, these types of deals, both among large players and mid-size and smaller up-and-comers in flavors and ingredients, are unlikely to abate anytime soon in the race to keep up with shifting consumer demands.
IFF to buy DuPont's nutrition business in $26.2B deal
