It’s been more than a year since IFF announced its planned acquisition of the former DuPont division. The leaders at both businesses had ample time to plan the merger and figure out their new capabilities. And in the last two and a half months, as the companies came together, they have been putting those into place.
With the release of the videos and the pro forma numbers, IFF is showing the world exactly what those plans and capabilities entail, as well as giving concrete evidence of how much of a powerhouse the company is. The information serves both as a showcase of capabilities for potential clients, but also as a reintroduction of the newly reinforced company to competitors.
At his presentation in February at the virtual Consumer Analysts Group of New York conference — a few weeks after the merger was completed — IFF Chairman and CEO Andreas Fibig explained why it was important for IFF to modernize its capabilities. The market dynamic has changed dramatically in the last couple of years, he said, and both small and big players are looking for different things.
“More and more of our customers are asking us to combine ingredients and technologies, or even come up with integrated solutions,” Fibig said at the conference. “And it’s so important that a company like IFF reacts on it, and basically goes forward to satisfy all of these customer needs of our big customers and the smaller customers as well.”
A big part of the new company’s focus is ramping up its research and development. The R&D capabilities are so important for IFF to show off that the company made a video, even though R&D is not its own separate division for business purposes. In the presentation, Greg Yep, executive vice president, chief R&D and global integrated solutions and sustainability officer, talks about the company’s priority on R&D — with about a $620 million annual spend — and offered a detailed look at its platforms and capabilities.
The food-related components also are key to the company’s continued success, as Nourish division President Kathy Fortmann breaks down in her video. The newly combined segment, she said, serves more than 43,000 customers. About 40% of the business is in the ingredients unit, about 40% is food design and the remainder is flavors.
Beverages and culinary — frozen and refrigerated food, sauces, plant-based protein and dehydrated items — are the biggest core categories. But, she said, the company is now a leader in many of the ingredients capabilities throughout the food and beverage business.
Not only does all of this show IFF’s capabilities to customers and competitors, but it also seeks to prove its ability to smoothly merge with doubtful investors and analysts. Soon after the merger with DuPont N&B, activist investor Sachem Head Capital Management reportedly took a $1 billion stake in IFF, hoping to force the company to improve its finances and smoothly integrate with the DuPont division.
IFF has a track record for bumpy integrations. The company discovered in 2019 — years after acquiring Frutarom— that two of Frutarom’s operations in Russia and Ukraine may have paid bribes to customs officials and given kickbacks to distributors. IFF is currently battling a federal class action suit with investors about the deal. Last month, IFF offered Sachem Head Managing Partner Scott Ferguson a seat on its board.