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Givaudan Seeks Out New Flavors for Hot Markets

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Submitted By garrett9669
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Introduction This article focuses on a company named Givaudan who is one of four major players in the flavor industry accounting for around 65% of the global market share in the industry. Givaudan is a company that makes flavors and scents that are included in products internationally ranging from solid foods, to liquid foods and even drinks. Their goal is to help the manufacturers ensure that the flavors are as consistent and accurate as possible. This article points out that, just in the last 10-15 years, in order to remain competitive in their markets, food and beverage makers are increasingly outsourcing the flavor and fragrance portion of their R&D spend to companies such as Givaudan. As of the writing of this article, 80% of all R&D spend for flavor and fragrance development is outsourced to companies. This makes sense, because the amount of capital that would be needed to finance R&D in-house for such a small portion of the products cost, would be higher than contracting with an outside source that already has the tools and skills and people necessary to help. Emerging markets are representative of around 42% of Givaudan's sales and this number is only expected to grow, showcasing that trade and services between companies and developed countries are not the only way an international company can generate revenues. Another key issue raised in this article is the fact that the raw materials supply pricing is increasing and as such Givaudan is looking for ways to try and reduce costs and stay competitive with the others in the industry. Givaudan only needs to invest between 6% and 8% of its annual sales back into R&D in contrast to companies like Pfizer and other pharmaceutical players who have R&D budgets that are much larger.

The rest of the article, after stating these facts, discusses the process that Givaudan undertook to try and recreate the picanha taste for the Latin American markets. Part of the research process includes, what I deem to be the toughest part of the job, going to multiple restaurants and cafes in the targeted areas and eating a lot of food to try and be able to recreate the specific flavors and scents they are seeking. The engineers then take those flavors back with them to the lab and attempt to recreate them for inclusion by their customers into their food and beverage products.

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