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Frutarom firming nutrition form after 4 years


- Last updated on GMT


Related tags Nutrition

In 2012 Frutarom appointed a new chief of its health and nutrition division, with the Swiss-Israeli flavours and ingredients house making no secret of its ambition to expand its supplements and functional foods footprint.

Holger Riemensperger, general manager of Frutarom Health, was that man and he has overseen a period of rapid change in the division. Not to mention growth and a swathe of acquisitions to build its portfolio at the nutritious end of the spectrum.

“We are performing very well and we are very happy with our progress. We are doing good,” ​Riemensperger told us from Vitafoods Europe in Geneva recently.

“Now it is the moment where we can begin to show the real Frutarom to the market.We have only just begun to explore the depth of the market. We have only scratched the surface in terms of extracting some of the synergies from our acquisitions.”

Holger Riemensperger-Frutram-H&Nchief

“There is so much more we can get out of the collaborations. It’s really exciting. It’s too much," he quipped. "It can be difficult to choose what to focus on sometimes.”

In 2015 Haifa, Israel-HQ’d Frutarom. In September it acquired 79% of Spanish firm Nutrafur in a €10.3m sale, which it hoped would develop its portfolio of natural plant extracts for food preservation.

In June it acquired New Zealand-based fruit ingredients company Taura Natural Ingredients for about €65m and in February it took UK savoury ingredients business FoodBlenders for €2.23m plus an estimated extra €550,000 depending on performance.  

Riemensperger said there were no signs of a slowdown in that M&A policy that saw 15 acquisitions in all Frutarom divisions in 2015 and 53 in recent years.

“The pace of acquisition will continue – at least – some take three years, some take three weeks – we still have things in the pipeline and we will continue this way.”

Its range extends to omega-3s and superfruit extracts as well as more traditional botanicals.

Rise of natural

One of the mega-trends driving the growth of Frutarom and other botanical players is rising global demand for products that are ‘natural’ and ‘local’ as consumers move away from synthetic ingredients and engage homegrown ethoses.

“The interest in natural has tremendously increased in the past 12 months – even in supplements and pharma because there are people that want even capsules to have a natural colour. Or then a tablet with a natural colour,” ​Riemensperger said.

Claims dissemination

Riemensperger said Frutarom was not overly concerned about the restricted health claims situation in Europe that sees about 2000 botanical extracts claims on-hold​, ​as he said sections of consumer mistrust had shifted from companies making unverified claims to regulators like the European Food Safety Authority (EFSA).

At any rate, the EU nutrition and health claims regulation (NHCR) was not the only route to market as there also existed indications for products under the EU Traditional Herbal Medicinal Products Directive (THMPD), not to mention the pharma and cosmetic sectors as well as a world beyond the EU. 

Contamination & adulteration

He said a more pressing issue was unintended contamination and economically motivated adulteration in extracts like berries and ginseng where “the perception that things are a lot better in Europe than other regions is not necessarily the case.”

pills plant botanical herbal supplements PushishDonhongsa

“We see a lot of contamination in the ginseng area – often the material is not leaves or roots, it is contaminated like crazy with pesticides,” ​he said.

“Adulteration [substitution of one plant source with another] on the other hand is also a problem in this industry across the world. It is not just a problem of the US, it is not only China – we often see things in the market that are not correct – when you see some of the prices it just doesn’t add up.”

“It is a question of economy – when you have a product that is selling at €30-40 per kilogram, when you have expensive raw materials, adulteration will occur. Ginseng and bilberries have been victims because they are relatively expensive.”

Across its divisions Frutarom aims to achieve sales of about €1.8bn by 2020 and achieved 18% CAGR (Compound Annual Growth Rate) between 2000 and 2014. 

CEO Ori Yehudai has said​ the firm has an M&A warchest of more than €300m.

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