Kelly Frederick, Associate Editor

Abstract: How one company is positioning for the booming organic flavor market

It is estimated that organic food sales have increased by nearly 20% annually since 1990, with consumer sales reaching $16.7 billion in 2006. And, according to Mintel, this “trend” will continue to grow; organic food sales are expected to rise 59% by 2012, while the organic beverage market is projected to grow by 65% over the same period. With the increased demand to introduce new organic products to consumers, it’s no wonder that the flavor industry has had to dramatically increase its organic flavor development.
Aromatech, a French-based flavors company created in 1987, launched its first organic flavor range in 2000. Yvan Grattarola, the company’s general manager, explained that delving into organics was a way for the company to differentiate itself from the big F&F players. Guided primarily by customer requests, Aromatech worked closely with Ecocert (a France-based organic certification organization) to develop some of its first organic flavors. From there, Grattarola explains, “we attended our first trade show in Biofach [World First Organic Fair] where we improved our knowledge in the National Organic Program thanks to BCS [BCS Öko-Garantie GmbH], our current certifier in the United States.” At the beginning of its organic endeavors the company focused on beverage, dairy and fruit flavors. These categories are still today three of the top four organic food categories in sales (see T-1).

In 2004, the organic industry saw a rising interest in the tea market, at which time Aromatech took its knowledge of organic flavors for the beverage market and dedicated its energy to the growing tea segment. Although the cost of organic flavors is more expensive in comparison to other flavors, it wasn’t too difficult for Aromatech to enter this new market, given the high cost of tea when taken by volume. Thus, the flavor was still a relatively small amount of the final price. Today, organic tea and coffee flavors make up the largest segment of Aromatech’s customer requests (see F-1). And the company keeps pushing the envelope: “Our latest development concerns encapsulated and granulated flavors specially dedicated to the organic tea segment,” says Grattarola. All this work has paid off; five years ago organic sales accounted for only 1% of Aromatech’s turnover, today it is 9%.

Other topics discussed: US vs. Europe; Formulating Technologies; Regulations and the Supply Chain; Trends