A clutch of recent acquisitions in the wellness domain reflects findings from a new report by Frost & Sullivan that suggests the consolidation phenomenon kick-started a few years ago is still gaining momentum. "Companies are looking forward to exploiting the wellness trend by either acquiring the company or the expertise to manufacturer additives and ingredients, which are perceived as natural or add functional benefits," states the report. Buying into the wellness trend Buying-in knowledge through a bolt-on acquisition or a financial stake provides firms with an immediate 'expertise' springboard. German ingredients giant Cognis, for example, recently gained access to one of the world's largest natural compounds databases in a move it hopes will generate business in new functional foods, supplements and cosmeceutical applications. In March this year the firm took an undisclosed share in fellow German company, InterMed Discovery GmbH, with which it had entered into a cooperation agreement that will grant Cognis "exclusive access to selected potential active ingredients". Erik Metz, InterMed's head of business development told NutraIngredients.com at the time that the database consisted of single compounds, extracts and blends, of which 40 per cent were novel. A further example comes from the recent move by Gallic supplier, the Iranex Group, to acquire fellow French natural extracts specialist Bio Serae Laboratoires, as part of a strategic drive into the health and wellness sector. Colloides Naturels International (CNI), the Iranex arm that specialises in prebiotic acacia gum and wheat-derived soluble and insoluble fibres, will work most closely with Bio Serae. Olivier Houalla, former CNI global sales manager and now president and CEO of Bio Serae Laboratoires of Bio Serae, said in a November 2007 NutraIngredients.com video interview that "the trend is to the natural product". He stated that purchasing Bio Serae would give CNI extra tools to negotiate the European and international functional foods market. Economies of scale Consolidation is, arguably, not just about buying-in knowledge. In the previous decade consolidation within the food industry has been a necessary strategy to compete in a testing environment. As the big retailers and food makers gained in critical mass, the supply chain felt the impact of price pressures. Consolidation represents a solution to beat the pressures through economies of scale and opportunities to trim margins. "Consolidating food industry...may reduce the margins forcing companies to acquire economies of scope, not only in production but also in R&D, as investment in R&D increases by the day," says the Frost & Sullivan report, 'Consolidation patterns in food additives and ingredients market.' A further example that mirrors the potency of the health and wellness trend: French natural ingredients manufacturer Naturex has made a string of acquisitions in the last year. In January a €9.5m deal brought the active ingredients division of compatriot Berkem into its fold. The acquisition has given Naturex immediate access to a line of innovative botanical extracts that are backed up by clinical studies, including Svetol, the green coffee bean-derived ingredient that has been attracting considerable interest in the market in the past year. The acquisition followed swiftly from Naturex's acquisition of US-based Chart Corporation in December 2007, that brought in a range of flavouring plant extracts in solid and fluid forms for the beverage and flavour industries. Earlier in 2007, the French firm paid €2.2m for Italian player HP Botanicals.