Since 1979, the world flavor and fragrance industry has experienced a period of lower profitability brought about by lower nominal (calculated in current U.S. dollars and local currencies) and real (quantity) growth rates as well as increased competitive pressures. Table I analyses in detail worldwide sales of 35 public and private companies (16 individually and 19 collectively) during the period 1979-1981 (with growth rates in current U.S. dollars and local currencies).
Calculated in current U.S. dollars, worldwide sales of flavors and fragrances were $4,200 million in 1981 against $4,000 million in 1979, thus growing at an average annual rate of only 2.5% during this period. Worldwide sales increased by 6.2% between 1979 and 1980, from $4,000 million to $4,250 million, but there was a slight decrease of 1.2% between 1980 and 1981 from $4,250 million to $4,200 million.
It is important to keep in mind that due to the present world monetary system of flexible (fluctuating) foreign exchange rates (e.g. changing periods of dollar depreciation versus appreciation, etc.), all calculations/consolidations in current U.S. dollars are tainted with considerable distortions. Indeed, calculated in current local currencies, the average annual growth rate of the flavor and fragrance industry was substantially higher during the years 1979-1981: 8.2%, including a growth rate of 5.7% between 1979 and 1980 and 10.7% between 1980 and 1981.