International Flavors & Fragrances Inc Stock

International Flavors & Fragrances Inc. and its subsidiaries operate as a creator and manufacturer of food, beverage, health and biosciences, scent and pharma solutions and complementary adjacent products, including cosmetic active and natural health ingredients, which are used in a wide variety of consumer products.

The company’s products are sold principally to manufacturers of dairy, meat, beverages, snacks, savory, sweet, baked goods and other foods, personal care products, soaps and detergents, cleaning products, perfumes and cosmetics, dietary supplements, food protection, infant and elderly nutrition, functional food, pharmaceutical and oral care products. As a result, the company holds global leadership positions in the Food & Beverage, Home & Personal Care and Health & Wellness markets; and across key Tastes, Textures, Scents, Nutrition, Enzymes, Cultures, Soy Proteins, Pharmaceutical Excipients and Probiotics categories.

Based on 2022 sales, approximately 42% of sales were to global consumer products companies and approximately 58% of sales were to small and mid-sized companies. During 2022, the company’s 25 largest customers accounted for 28% of sales.

Product Offerings and Segments

The company’s business consists of four segments: Nourish, Health & Biosciences, Scent and Pharma Solutions. As part of the company’s ongoing transformation and business initiatives, the company intends to reorganize its segments around end markets: Food & Beverage, Household & Personal Care and Health.

Nourish

As a leading creator of ingredients and solutions, the company helps its customers deliver on the promise of healthy and delicious foods and drinks that appeal to consumers. The company creates products in its regional creative centers, which allows the company to satisfy local customer preferences, while also helping to ensure regulatory compliance and production standards. The company develops thousands of different Nourish offerings, most of which are tailor-made, and the company continually develops new ingredients and solutions to meet changing consumer preferences and customer needs.

The company’s Nourish segment consists of an innovative and broad portfolio of natural-based ingredients to enhance nutritional value, texture and functionality in a wide range of beverage, dairy, bakery, confectionery and culinary applications and consists of three business units: Ingredients, Flavors and Food Designs.

Ingredients include a diversified portfolio across natural and plant-based specialty food ingredients derived from herbs and plants that provide texturizing solutions used in the food industry, food protection solutions used in food and beverage products, as well as specialty soy and pea protein with value-added formulations, emulsifiers and sweeteners. Natural food protection ingredients consist of natural antioxidants and anti-microbials used for natural food preservation and shelf-life extension for beverages, cosmetic and healthcare products, pet food and feed additives.

Flavors include a range of flavor compounds and natural taste solutions that are ultimately used by the company’s customers in savory products (soups, sauces, meat, fish, poultry, snacks, etc.), beverages (juice drinks, carbonated or flavored beverages, spirits, etc.), sweets (bakery products, candy, cereal, chewing gum, etc.), and dairy products (yogurt, ice cream, cheese, etc.). Flavors also include value-added spices and seasoning ingredients for meat, food service, convenience, alternative protein and culinary products.

Food Designs include savory solution products, such as spices, sauces, marinades and mixtures. During the fourth quarter of 2022, the company announced its entry into an agreement to sell the Savory Solutions Group. The company expects that the transaction will close in the second quarter of 2023, subject to customary closing conditions. Additionally, Food Designs provide inclusion products that help with taste and texture by, among other things, combining flavorings with fruit, vegetables, and other natural ingredients for a wide range of food products, such as health snacks, baked goods, cereals, pastries, ice cream and other dairy products.

Health & Biosciences

The company’s Health & Biosciences segment consists of the development and production of an advanced biotechnology-derived portfolio of enzymes, food cultures, probiotics and specialty ingredients for food and non-food applications. Among many other applications, this biotechnology-driven portfolio includes cultures for use in fermented foods, such as yogurt, cheese and fermented beverages, probiotic strains, many with documented clinical health claims for use as dietary supplements and through industrial fermentation the production of enzymes and microorganisms that provide product and process performance benefits to household detergents, animal feed, ethanol production and brewing.

Health & Biosciences is consisted of five business units: Health, Cultures & Food Enzymes, Home & Personal Care, Animal Nutrition and Grain Processing. On July 1, 2022, the company completed the divestiture of its Microbial Control business unit.

Health provides ingredients for dietary supplements, functional food and beverage, specialized nutrition, and pharma.

Cultures & Food Enzymes provides products that aim to serve the global demand for healthy, natural, clean label and fermented food for fresh dairy, cheese, bakery and brewing products. Such products contribute to extended shelf life, stability, taste and texture, helping the company’s customers to improve their product offerings. The business’s enzyme solutions also allow the company’s customers to provide low sugar, high fiber and lactose-free dairy products.

Home & Personal Care produces enzymes for laundry and dishwashing detergents, cleaning and textiles to help enhance the product and process performance of products in the fabric and home care, textiles and industrials and personal care markets.

Animal Nutrition produces feed enzymes and animal health solutions that help to improve welfare, performance and sustainability of livestock animal farming.

Grain Processing produces yeasts and enzymes for biofuel production and carbohydrate processing.

Scent

The company’s Scent segment creates fragrance compounds, fragrance ingredients and cosmetic ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products. Consumer insights science and creativity are at the heart of the company’s Scent business, and along with its unique portfolio of natural and synthetic ingredients, global footprint, innovative technologies and know-how, and customer intimacy, the company is a market leader in scent products.

The Scent segment is consisted of three business units: Fragrance Compounds, Fragrance Ingredients and Cosmetic Actives.

Fragrance Compounds are unique and proprietary combinations of multiple fragrance ingredients that are ultimately used by the company’s customers in their consumer goods. The company’s creative and commercial teams within fragrance compounds are organized into two broad categories: fine fragrances and consumer fragrances.

The company’s perfumers harness creativity and leverage its innovative captive molecules, sustainable natural ingredients obtained with innovative processes, biotech ingredients, data science, and consumer insights to create unique and inspiring fragrances driving consumer preferences.

The company’s fine fragrances focus on perfumes and colognes, creating global and local namesake brands, from high luxury to mass market, from market leading to ultra-niche products.

The company’s consumer fragrances include three end-use categories of products:

Fabric Care, including laundry detergents, fabric softeners and specialty laundry products;

Home Care, including household cleaners, dishwashing detergents and air fresheners; and

Body Care, including personal wash, hair care and toiletries products.

Fragrance Ingredients are natural and synthetic, and active and functional ingredients that are used internally and sold to third parties, including competitors, for use in the preparation of compounds. While the principal role of the company’s fragrance ingredients facilities is to support the company’s fragrance compounds business, it utilizes excess manufacturing capacity to manufacture and sell certain fragrance ingredients to third parties, enabling the company to leverage its fixed costs while maintaining the security of its supply for the company’s perfumers and ultimately its customers. Flavor ingredients include natural flavor extracts, specialty botanical extracts, distillates, essential oils, citrus products, aroma chemicals and natural gums and resins. Such ingredients are used for food, beverage and flavors; and are often sold directly to food and beverage manufacturers who use them in producing consumer products.

Cosmetic Actives designs, develops, manufactures and markets innovative ingredients for the cosmetics and personal care industry, while offering active ingredients, functional ingredients, and delivery systems.

Pharma Solutions

The company’s Pharma Solutions segment produces, among other things, a vast portfolio of cellulosics and seaweed-based pharmaceutical excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling the development of more effective pharmaceutical finished dosage formulations. The company’s excipients are used in prescription and over-the-counter pharmaceuticals and dietary supplements. The company’s Pharma Solutions products also serve a variety of other specialty and industrial end-uses, including coatings, inks, electronics, agriculture, and consumer products.

Intellectual Property

As of December 31, 2022, the company had 940 granted U.S. patents, and 546 pending U.S. patent applications, as well as numerous other granted patents and pending patent applications around the world.

Governmental Regulation

The company’s products and operations are subject to regulation by governmental agencies in each of the markets in which the company operate. These agencies include the Food and Drug Administration and equivalent international agencies that regulate flavors, pharmaceutical excipients and other ingredients in consumer products; the Environmental Protection Agency and equivalent international agencies that regulate the company’s manufacturing facilities, as well as fragrance products (including encapsulation systems); the Occupational Safety and Health Administration and equivalent international agencies that regulate the working conditions in the company’s manufacturing, research laboratories and creative centers; local and international agencies that regulate trade and customs; the Drug Enforcement Administration and other local or international agencies that regulate controlled chemicals that the company uses in its operations; the Chemical Registration/Notification authorities that regulate chemicals that the company uses in, or transports to, the various countries in which the company manufactures and/or markets its products; and the U.S. Department of Agriculture and equivalent international authorities with respect to, among other things, labeling of consumer products.

The company has seen an increase in registration and reporting requirements concerning the use of certain chemicals in a number of countries, such as Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulations in the European Union, as well as similar regulations in other countries.

The company’s safety management system is based on the U.S. Occupational Safety and Health Administration (OSHA) standards, which apply to all of the company’s sites in conjunction with any local regulations.

Competition

The company’s main competitors consist of other large global companies, such as Givaudan, Firmenich Symrise, DSM, Kerry, ADM, Novozymes, and Chr. Hansen.

History

International Flavors & Fragrances Inc. was founded in 1833. The company was incorporated in 1909.