Givaudan’s sturdy presence in China and Japan has helped secure strong Q1 results for its flavour division; with a 9.4% sales increase in Asia Pacific markets.
The Swiss flavour giant pulled in US$613.8 million (CHF 561.2m) of sales for its flavour business arm between January and March 2012, representing a 3% increase in Swiss Francs.
Givaudan said that the Asia Pacific was a strong growth region for the company with double digit growth coming from China, India, Indonesia and Thailand.
“Beverage achieved double digit growth while dairy and savoury performed strongly stemming from new wins and the good growth of existing products,” the company said.
Jean-Philippe Bertschy, financial analyst at Swiss banking group Vontobel, said that Givaudan has a “very strong position” in Asia; a key growth region for the company.
“For instance, in China, Givaudan has a market share of 11% in a very fragmented market with more than 800 players,” Bertschy told FoodNavigator-Asia.
He added that across the Asia Pacific region, the Swiss flavour giant has a stronger presence than its competitor International Flavours and Fragrances (IFF), holding a regional market share of 17% compared to IFF’s 12%.
Tasty growth strategies
Givaudan’s strongest market is Japan, followed by China and then India, Bertschy said.
“India is indeed a fast-growing market. I cannot tell whether that market is growing faster than China, it’s tough to say,” he said.
Flavour firms seem to be investing in both markets, with IFF committing US$100m in 2011 to build two flavour facilities in Singapore and Guangzhou, China by 2014, and Japanese flavour giant set to build a US$10m R&D facility in Southern India; a country it pegs as Asia’s ‘fastest-growing’ flavour market.
“Asian food is very diversified and uses lots of different flavours,” Bertschy said, revealing that for Givaudan, the beverage sector gobbles up nearly a third of its Asia Pacific sales.
The savoury market represents 25% of sales, sweet goods (14%), dairy (13%) and snacks (9%), he added.
He detailed that the global health and wellness trend in the flavours industry will be one the company needs to leverage to secure future growth over the coming year.
While the developing Asian flavour markets of China and India hold promise for Givaudan, Bertschy said that the company does not neglect the developed markets of Japan, Korea and Australia, as its strategy is to ‘go global’.