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Resta said the merger “allows us to tap into a shared customer base and pursue innovative opportunities in beauty, fragrance and naturals.”
The size of the merger certainly attracted attention. “It’s unusual for two giants of this size to come together, but we know that organic growth is difficult these days,” said David Altman, CEO of marketing consultancy and investment firm Marketshare Advisors International.
Eternal supply
The deal comes at a time when the beauty sector faces major challenges in data access. It is hoped that renewable resources based on biotechnology will alleviate these challenges in the long run.
Unusually hot temperatures have damaged the roses. Jivaudan reported rising prices for ingredients such as pink pepper, Arabian jasmine and Siberian pine due to inclement weather, limited runoff supplies and low crop yields.
Firmenich’s Resta DSM-Firmenich highlights how to overcome these issues with safe synthetic ingredients. These synthetic materials are made entirely from their naturally occurring chemical formulas in a laboratory. The chemists have full control over the quality, concentration levels and stability of the formula, so they are considered safe. An example of a biotech product is Dreamwood, launched in 2020 and inspired by sandalwood. It also claims cosmetic benefits. “It’s efficiently designed to be stable in shape, always in supply and less expensive than natural sandalwood,” says Resta.
The technology to develop such renewables is part of an acquisition-heavy strategy by DSM – with a series of major deals in the past 24 months, many in the nutrition sector. In the fragrance sector, an exclusive rights agreement was signed in March 2021 to acquire new fragrances from Amyris, a leading biotech company based in California.
Givaudan is also moving quickly with natural product, ingredient and oil acquisitions, including Centroflora Nutra, Naturex and Albertville. And in the year In 2021, IFF completed a merger with DuPont’s nutrition and bioscience business valued at $26.2 billion (€27.3 billion).
The size of these businesses is no guarantee of their successful growth, Altman says. “Bigger does not mean better when it comes to R&D,” he says. Success is in the culture of the company – how fast they are to market, minimally viable products and the ability to throw ideas at the wall.
DSM-Firmenich has 15 global R&D facilities, 88 production sites, 40 innovation centers, 78 application labs and 70 premix sites. How integrated these are, analysts say, will be an important test for the new business.
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