Changing consumer palates could be strong tailwind for Givaudan
Givaudan are the flavor and fragrance producing company behind an overwhelming number of products. According to the company, the “average person” comes into contact with a scent it’s developed ten times a day. For many of those people, Givaudan’s scents and flavours – via toothpaste, bodywash, or coffee – will be amongst the first things they register in a day. And the company thinks that globalization is likely to have a positive impact on its business.
One of the reasons Givaudan is so rarely spoken about is that its business operations are very hush hush. This is not because there is anything untoward in its products – far from it – but because its clients (which number some of the biggest and most visible companies in the world) wouldn’t necessarily want customers to know where they get that ‘special something’ that makes their soda, chicken, shampoo, or perfume unique.
There is, of course, another consumer-facing reason for secrecy: people tend to worry about lab-built additions to their foods and products. Givaudan, of course, abide by all the relevant safety standards, but scientifically illiterate customers often don’t care or understand when a product is safe (take, for example, the hysteria that often accompanies news of genetically modified crops in the food source).
Whether or not consumers would be heartened to know that Givaudan is behind many of their favourite products, there is little doubt that they like the products themselves. Gilles Halotel, Technical Head of ASEAN at Givaudan, explains how the company remains in strong demand:
"Take chicken stock for example. People expect their food to have a strong chicken taste, and if we had enough chicken livestock around, maybe we wouldn't need stock [products]. We're responding to need."
Saying that it was “not for me to judge whether it’s good or bad,” Halotel also notes that globalization is causing the “overall palate” to change. The rise of big food and beverage chains, and the prevalence of global perfumeries, means that people are beginning to expect some things to taste or smell a certain way. This, of course, is a strong tailwind for the company, who can engineer products to meet those expectations.
Nonetheless, Halotel thinks that there will always be some smells and tastes that remain regional. And that, he says, is a good thing. He says:
“I hope food will continue to be diverse. Everyone already uses iPhones and searches on Google – if we all eat the same food as well, life will be very boring.”
Dominion holds Givaudan in its Global Trends Managed Fund.
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