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Perfumer & Flavorist 2008 Flavor & Fragrance Leaders

By: Jeb Gleason-Allured, Editor, and Kelly Frederick, Associate Editor
Posted: July 18, 2008, from the August 2008 issue of P&F magazine.
As we wait for the latest M&A news, we pres ent P&F magazine’s 2008 Flavor and Fragrance Leaders (FFL), a ranking of top fl avor and fragrance companies, complete with analysis and insights into the activities that will shape them in the years ahead. (See A Note on Rankings.)

Due to acquisitions in the industry, the rankings of some companies have changed year-over-year, and space has been cleared to make room for some new entrants. As with previous editions, this year’s list includes two unranked entities—Cargill and Mastertaste—which belong among the top tier of F&F, despite unavailable fi rm sales data. The order in which these two companies appear on the 2008 FFL is no refl ection on their actual rank within the industry.

2008 FFL: the Analysts’ View

What is most striking about the 2008 FFL is the fact that the top 10 companies’ sales for 2007 total ~$13.7 billion, or just shy of 70% of total industry sales. Companies outside of this group have combined sales of approximately $5.7 billion. As companies continue to consolidate, so will sales. 

A recent report from Business Insights, “The Top 10 Flavor and Fragrance Companies,” provides some understanding of this phenomenon. “Huge overhead costs due to rising raw material prices and R&D expenses are encouraging smaller companies to merge with bigger ones,” the report states, adding that heavy investments are necessary for organizations to keep up research, innovation and service. Business Insights also cites globalization as a key driver of F&F consolidation. “As tastes vary according to geographies, flavor manufacturers are required to have a thorough knowledge of local tastes in each of the countries in which they are active.”