Sales creep up for IFF
flavours group International Flavours and Fragrances (IFF) with the
firm reporting an overall drop in sales for the region but growth
elsewhere keeps firm on track for rest of 2004.
The New-York based firm reported an 8.7 per cent lift in sales for the second quarter of 2004 to $524.2 million but the results were knocked by $7.7 million in restructuring costs and charges linked to European fruit business assets, and the closure of the company's Canadian manufacturing facility last month.
In May this year IFF announced the sale of its fruit preparations businesses in Switzerland and Germany to fellow flavour firm Frutarom. Sales from these businesses, which manufacture processed fruit and other natural product preparations for food products - to include baked goods and dairy products - topped $90 million in 2003.
Richard A. Goldstein, chairman and CEO of IFF, said yesterday the firm was on track to meet 2004 expectations. "Our results were mainly driven by new customer wins and strong demand for our core flavour and fragrance products," adding that the board's decision to raise the quarterly dividend by 9.4 per cent in May was a sign of confidence in the firm's progress.
The results released this week confirm previous growth announced in April this year when IFF saw improved flavour sales for the first quarter, suggesting that strategies in 2003 to get the company back into profitability could be starting to show rewards.
"The actions that we have taken over the past several years to better our processes, increase efficiencies and improve customer service are clearly paying off," said Goldstein at the time.
And the second quarter figures unveiled on Thursday imply the US flavours firm, last year pushed from the number one global flavours perch by Swiss competitor Givaudan, might be back on track in the highly competitive $5.45 billion (€4.2bn) global flavours market.
Earlier this year US agri-giant Cargill joined the competition through its first flavours acquisition in Europe of UK flavours firm Duckworth. Leading Danish ingredients firm Danisco also has ambitions in flavours, with clear aims to become one of the top five global flavours players.
Key areas for growth include the ongoing consumer desire for natural ingredients, combined with a growing interest in more complex and authentic flavours. These factors are set to drive market demand for flavours and fragrances in the US to a value of $4.4 billion (€3.4bn) by 2007, according to a recent report from US market research company Freedonia.
The report estimates that the market will increase by a steady 3.5 per cent over the next three years, on the back of more expensive natural ingredients, complex flavours and a strong growth in low fat and low carbohydrate foods and beverages.
