Dr Greg Yep always checks the label. He’s the chief scientific and sustainability officer at International Flavours and Fragrances (IFF), and he needs some tomato sauce. “The first thing I look at is what’s in the product itself,” he explains. “I look at what the sauce is made out of and how it’s produced. Where it’s produced is also important, so I look at where the ingredients come from.”

There are supplements and energy bars on Yep’s list, too. They require a slightly different type of attention. “I look at what it’s going to do for me, if it’s valid and based on credible science. Everything should be transparent, but it should also perform as promised; if I want energy at 2pm, I expect the product that claims to offer that to make it happen.”

He interrupts himself with a laugh. “Obviously I also look at taste. Being in this industry you become a bit of a taste and scent snob. I look for and appreciate the different nuances certain products give to different teas or different ice creams.”

Satisfied, Yep returns home, drops some fish oil capsules into the teapot, douses the ice cream in tomato sauce and grates an energy bar over the sink. As he puts it, “There’s the science, which is based on data and information, chemistry and biology, and then there’s the art of how you put those things together, how you channel your capabilities and tools into something a consumer has never seen before, something to really accentuate their whole sensorial experience.”

“I look for and appreciate the different nuances certain products give to different teas or ice creams.”

This scenario is partly fictionalised. Still, with so much to bear in mind when choosing what food and ingredients to buy, you might forgive shoppers who forget to think about the next step. Enter clean labelling. It’s far less taxing to make an informed decision about what you’re consuming when products contain “natural, familiar, simple ingredients that are easy to recognise, understand and pronounce”, to quote the Go Clean Label campaign.

“I look at it from a slightly different angle,” admits Yep, who won FEMA’s Excellence in Flavor Science Award in 2017, but he’s aware of the difficulties that beset the untrained eye. “A lot of brands want to simplify the label – on the front and on the back – and we help them try to do that with our technology.”

Get it right

Much like its chief scientist, IFF puts a lot of effort into making the right purchases. In April 2017, the group acquired PowderPure, which uses its Infidri technology to eliminate water from fresh products, creating all-natural ingredients without compromising taste, nutrition or colour. A year and a half later, the flavour giant completed its biggest ever purchase, with the $7.1 billion takeover of Israeli natural ingredient experts Frutarom, making IFF comfortably the second-biggest company in the industry behind Givaudan.

This is evidently not a weight loss fad. The year before the PowderPure acquisition, IFF’s sales totalled $3.1 billion; two years later, with both purchases completed, the number was $4 billion. The projection for 2019, the first full year with Frutarom as part of IFF, is $5.2–5.3 billion, a combined sales growth of approximately 5–7%.

Still, after the purchase was announced in May 2018, IFF’s share price fell by 10%. Between 2002 and 2014, the company had focused entirely on organic growth, and even purchases like PowderPure were small additions. By contrast, IFF tripled its debt load to pay for Frutarom – itself the sixth-largest company in the flavours and fragrances industry – and pursue a major change of strategy. That tends to worry investors.

From the other side, however, it’s an important diversification. Frutarom generates 70% of its revenue from small, mid-sized and privatelabel companies, whereas IFF relies on large multinationals for about half of its earnings. Despite their household names, those bigger providers of processed consumer staples are among those companies facing the biggest challenges in adapting to the clean label landscape.

That much had been clear to IFF for a while. For Yep, the group’s success lies as much in its understanding of the consumer tastes and preferences of tomorrow as those of today. “We acquired PowderPure because we saw the trend coming,” he explains. “Then we saw ‘natural’ as a growing consumer preference, and that’s why we made the acquisition of Frutarom.” Three quarters of the Israeli company’s revenue derives from its natural-ingredient portfolio, areas that IFF projects to grow at twice the speed of its core markets. “The reality in research and development is that if you’re relying on consumer insight it’s almost too late to react because the trend’s already here,” Yep continues. “We have to be able to adapt and offer the developing technologies we believe the consumer will embrace in different products.”

“We have to be able to adapt and offer the developing technologies we believe the consumer will embrace in different products.”

As that last sentence implies, the way we get our food is neither natural nor familiar to the average shopper. Clean labelling is unlikely to change that. The closest humans ever came to understanding everything we eat might have been in the Garden of Eden – that early model for the supermarket where Adam and Eve had only to see things to know what they were. And even they couldn’t stick to a diet.

$7.1 billion
The price IFF paid for Frutarom.

Today’s consumers don’t necessarily get nutritional advice from snakes, but they could do with a shared legal definition of ‘natural’ for food labelling. After decades of obesity crises garnishing news bulletins and chemicals like butylhydroxyanisole spattering ingredients lists, it’s clear they prefer the thought of the garden to that of the lab. In many products, butylhydroxyanisole has been replaced by a chemically processed alternative called ‘extract of rosemary’. When it comes to food, seeming ‘natural’ is in, and choosing what we can eat on the basis of what we can pronounce seems natural. Then again, so does quinoa. It’s hard to split the food supply in two.

“Sometimes it’s not aligned with consumer perspectives; a lot of times it’s based on what the choices are,” says Yep, who thinks of the binary on offer as a regulatory paradigm and doesn’t have much of an appetite for picking a side. “Do we see trends moving towards natural and clean label? Absolutely, and we want to give our customers and consumers that choice. But if you look at reasons consumers prefer natural to artificial, they shouldn’t be choosing one over the other because of safety. That doesn’t really correlate.”

The increase in the price of natural vanilla from 2013 to 2017.

In fact, the tendency to equate ‘natural’ with ‘healthy’ might be counterproductive. An easy way for food manufacturers to make labels appear cleaner is to stop fortifying food with vitamins and minerals. According to Euromonitor International, between 2010 and 2015 there were declines in fortified iron, vitamin A and vitamin K consumption in North America, and in fortified vitamin A, vitamin C and vitamin D consumption in Western Europe. More than that, in 2016 US baker Panera tried to please customers by proactively banning ascorbic acid from its ingredients lists. Though it sounds like it might work to remove paint, ascorbic (anti-scurvy) acid is actually vitamin C.

Terms and conditions

Yep would welcome a discussion around the terms ‘natural’ and ‘synthetic’, but he prides himself on his flexibility in meeting different demands. “The reason I chose this industry is that it’s an area where things aren’t as concrete or black and white as you would see in pharma,” he explains. Making the most of people’s preferences is part of the art of flavouring. “Looking at our R&D programmes, if the consumer wants natural, we’re going to give them natural; if they want artificial, we’re going to give them artificial.”

 Not that the public’s desires are quite so symmetrical. Very few health influencers are clamouring for synthetic vanillin for its own sake, or at all, despite the fact that the price for a kilogram of natural vanilla rose from $20 in 2013 to peaks of over $600 in 2017 and 2018. At times vanilla was considerably more expensive than silver. The rapid increase was partly caused by the series of natural disasters that have hit Madagascar in recent years, but it’s a sign of things to come. While the global markets for natural and artificial food flavours were roughly equal in 2018, one projection from Allied Market Research indicates that the former may be almost twice as large as the latter by 2025.

Yep doesn’t remember “natural versus artificial” being an issue until recently, and yet everywhere else in flavours and fragrances he sees similar oppositions fading into irrelevance. “Over my 30 years, the line between biology and chemistry has definitely blurred,” he notes. “And today’s consumers are demanding whole sensorial experiences. I go to a fragrance customer and they want to talk about taste; I go to a taste customer and they want to talk about scent. You don’t separate your senses and say this is a fragrance and this is a flavour, so why should we separate things as a company? Scent is even moving into experiential areas like virtual reality and gaming. Just because we have a taste business unit, a scent business unit and a nutrition business unit, it doesn’t mean I can’t put them all together as the consumer would.” It’s only natural.