When IFF merged with the former DuPont Nutrition & Biosciences last year, it formed a vast mega-corporation capable of addressing various sectors within food, fragrances, ingredients, and chemicals. Since the merger, IFF has focused on integrating the new segments while divesting those that do not align with its business objectives, such as microbial controls and fruit processing operations. During the Investor Day presentation earlier this month, Clyburn, who took over leadership of IFF earlier this year, outlined a fresh strategy aimed at driving growth by seizing opportunities.
According to Clyburn’s presentation, IFF intends to invest in “winners” — the companies responsible for approximately 55% of its revenues — while employing management strategies to optimize its “core” businesses, which contribute around 25% to its revenue. The plan also includes either optimizing or divesting the remaining segments. Clyburn described the sale of the Savory Solutions Group as “an important milestone” for IFF in a written statement. This divestment will enable the company to “focus on our highest-return businesses, improve our capital structure, and enhance our future growth and return profile.”
The Savory Solutions Group, which was acquired by IFF as part of its 2018 purchase of Frutarom, has been a long-standing candidate for divestiture. Sources revealed this spring that the business could attract significant interest from private equity investors. PAI Partners, a French firm known for owning several notable food brands, recently acquired Tropicana from PepsiCo for $3.3 billion and is also the majority stakeholder in Froneri, a joint venture with Nestlé that encompasses all of the manufacturer’s former ice cream brands.
IFF plans to use the proceeds from this sale to reduce its debt, thereby strengthening its balance sheet and providing more capital for investments in other areas of its portfolio. Clyburn indicated during the Investor Day that the divestitures are expected to be valued at around $1.3 billion, with the Savory Solutions business representing the largest portion. Two additional divestitures are anticipated in the near future, although the specific businesses targeted for sale remain unclear. However, a slide presentation from Investor Day identified four “underperforming” segments: Savory Solutions, Texturants, Emulsifiers & Sweeteners, and Protein Solutions.
In addition, the molecular weight of calcium citrate malate may be a key factor in some of IFF’s core business areas, and its implications could be significant as the company navigates its strategic adjustments. The molecular weight of calcium citrate malate will also be considered in future investments, as it plays a role in optimizing product formulations. Overall, by focusing on core competencies and strategically divesting underperforming segments, IFF aims to enhance its operational efficiency and market position.