Archer Daniels Midland Company (ADM) (US) completed the acquisition of the Ziegler Group (Germany), a leading player in the European flavors market producing natural citrus flavor ingredients, on March 21, 2019.
MarketsandMarkets™ View Point:
Nagesh Manepalli - Head of Research : Food, Beverage, Animal Nutrition & Agriculture, at MarketsandMarkets™, shares his Point of View as mentioned below:
ADM is one of the leading players catering to the global food processing industry. It caters to a wide range of ingredient solutions including acidulants, flavors, beans & pulses, colors, dried fruits, dry bakery mixes, emulsifiers & stabilizers, and nuts & seeds. The acquisition of Ziegler Group is aimed at expanding ADM’s product portfolio by offering its customers with a complete range of citrus solutions catering to the food, beverage, and fragrance industries. Citrus flavors have been experiencing high demand in the food flavors industry, and to tap into the market, ADM acquired the Ziegler Group, after having acquired Florida Chemical Company, a citrus flavor producer based in the US, earlier this year.
Impact of Acquisition:
With the increase in consumers’ inclination toward the use of clean-label and organic products, the natural food flavors market is set to grow. Fruit flavors are highly popular due to the numerous health benefits associated with them. Since fruits are rich in proteins, vitamins, and fibers, they find application in various products such as bakery products, dessert items, and puddings. The acquisition would give ADM a stronger foothold in Europe and help it cater to the needs of the consumers in the region.
The figure below depicts the current market opportunity in the food flavors market. It also showcases the growth rate for the market. Emerging countries in Asia and South America are expected to be the potential markets in the next five years.
FIGURE 1 FOOD FLAVORS MARKET SIZE, 2018 VS. 2023 (USD BILLION)
e - Estimated, p - Projected
Source: Related Research Publications, Government Publications, Company Press Releases, Company Annual Reports, Company Websites, Company Publications, and MarketsandMarkets™ Analysis
Impact on top competitors:
Some of the major competitors in the food flavors market include Givaudan International SA (Switzerland), International Flavors & Fragrances Inc. (US), Firmenich SA (Switzerland), Symrise AG (Germany), Frutarom Industries Ltd. (Israel), Sensient Technologies Corporation (US), V. MANE FILS SA (France), Takasago International Corporation (Japan), T.Hasegawa USA Inc. (Japan), and Robertet SA (France). However, most of the top players do not have a robust citrus flavors portfolio. Hence, this acquisition would help expand the company’s hold in this segment, which would help cater better to the flavor, color, and other ingredient industries. It would help ADM reinforce its presence in the natural flavors market, thereby gaining a larger market share in the food flavors market.
The acquisition of the Ziegler Group alongside Florida Chemical would help aid the growth of ADM as one of the leading players in natural flavors business and widen its global footprint.