DSM to acquire Amyris’ Flavor & Fragrance bio-based intermediates business

Source: fooddive.com

Dive Brief:

  • Royal DSM has reached an agreement to acquire the flavor and fragrance bio-based intermediaries business of Amyris, according to a press release. The deal, which has an upfront payment of $150 million, includes seven of Amyris’ intermediate products, which will be added to DSM’s Personal Care and Aroma Ingredients portfolio.
  • Amyris will continue to create and commercialize its existing flavor and fragrance ingredients with the support of DSM and its current partners, who have extended their collaboration agreements by 15 years for ongoing R&D of future products.
  • The deal is the latest between the two ingredients specialists, which have a strategic partnership dating back to 2017. In recent years, DSM has acquired the license to supply Amyris’ farnesene bio-based compound to Givaudan, as well as its Brazil-based Brotas fermentation facility.

Dive Insight:

With fingers in the nutrition and health industries, DSM is bolstering its sustainability credentials with this latest Amyris acquisition. Specifically, the Dutch company said the deal would strengthen its biotechnology activities in nutritional ingredients; broaden its offerings in aroma ingredients; and bolster its sustainability profile, since the bio-based flavor and fragrance ingredients can be alternatives to chemistry-based products.

The timing is good: Products with a sustainability claim have continued to drive growth, even amid the pandemic, according to a recent report from IRI and the NYU Stern Center for Sustainable Business. 

DSM and Amyris have struck a number of deals together over the years including the acquisition of the latter’s fermentation-based production facility, which can churn out large quantities of farnesene, a chemical derived from sugar that is thought to have calming and sedative effects. Fermentation techniques are being used in a variety of food applications including developing proteins for alternative protein products, a segment that has attracted a record amount of funding in the past year. 

Acquiring Amyris’ intermediates products also could give DSM greater access to the company’s machine learning, robotics and artificial intelligence tech experience. At the same time, Amyris will benefit from access to DSM’s resources, network and reach.

California-based Amyris has a track record of growth, with ingredients in over 3,000 household products and three consumer brands built around its No Compromise brand of clean ingredients. This includes Purecane, a zero-calorie sweetener naturally derived from sugarcane.

Earlier this year, Amyris released its 2020 financial report, which showed strong performance. The company has launched six new ingredients, raised $200 million in equity financing and offloaded debt. It also posted its highest sales to date at $173 million in 2020, a 13% jump over 2019. The clean label movement is also boosting demand for its ingredients, with product revenue increasing 72%.

DSM has also been active with innovation, forming a joint venture in 2018 with Cargill to develop stevia-based sweeteners. In 2019, it announced a partnership with French agro-industrial group Avril to collaborate on developing plant-based protein from non-GMO canola. The ingredient could be available by the end of 2021, according to the companies. And last year, it launched a line of cheese cultures to improve the taste, melt and stretch of mozzarella.