Frutarom Health - Healthy profits

The functional food market is growing as consumers look for natural products with scientific merit. Holger Riemensperger, general manager at Frutarom Health, talks about the company's recent expansion and the need to balance health with taste.

Can you give us some background on Frutarom, including the company's growth strategy?

Holger Riemensperger: For many years, we've followed an aggressive strategy that combines above-average industry growth with strategic acquisitions of synergistic companies. As a result, Frutarom is one of the world's largest providers of speciality fine ingredients, flavours and savoury solutions.

Our business unit, Frutarom Health, operates with four production sites in Belgium, Israel, Switzerland and the US, focusing on branded health ingredients with strong proprietary science. We specialise in natural products produced in our own facilities, including GMP-certified operations in Switzerland.

Historically, we come from the pharmaceutical market, with science and compliance our main driving forces, but recently we've expanded into different industries, including dietary supplements, cosmetics and functional food.

On top of this segment expansion, we're also focusing our efforts on regional growth, primarily in Asia and Latin America. However, the high quality of our products - backed by comprehensive proprietary clinical data and the highest compliance standards - remains our core driver.

What are your most salient competitive advantages as an ingredients supplier?

We offer products that are backed by comprehensive proprietary science and the highest compliance standards, and regularly launch innovative natural-based ingredients. Our global reach and market presence adds up to a significant advantage, since most of the players in our industry are either locally or regionally oriented.

What was the motivation behind the company's move into the functional food market?

Functional food is a growing market and consumers are looking for the highest standards of safety and natural products that have scientific merit. However, most consumers do not compromise taste for health. As a business unit of one of the world's largest flavour houses, we have a large network of scientists and technologists that can bring together health ingredients in almost all food matrixes without compromising on taste. Also, we have excellent market access into all food and beverage segments and customers globally.

Frutarom's long tradition in phyto-pharmaceuticals means we are used to supplying products to the highest standards. Together with the capabilities of our application experts, this enables us to deliver what consumers are looking for: safe, effective, scientifically proven and natural health solutions that also offer great taste.

Can you tell us about the products you've developed for the functional food market and future plans?

We've started to transfer existing products that are already successful in dietary supplements into food applications. These include Portusana, a purslane extract for the support of healthy glucose levels in dairy applications, Neuravena, an extract of a proprietary variety of green oat for the improvement of mental fitness for cereals, and Finomate, a mate leaves extract for healthy body weight, and mental and physical vitality in beverages.

We've also been able to transfer products from our complementary portfolio into functional food applications. For dairy and bakery products, AB-Fortis is a microencapsulated iron that offers optimal food fortification without the side-effects of classical iron forms, and UniK2, a natural source of vitamin K2 as menaquinone 7 for bone health support in dairy products. We're currently developing new ingredients and we aim to launch two or three new ones for the functional food market in 2014.

How do you see the market evolving and where do you think the core growth areas will be?

We believe that the market will witness significant changes on the supplier side. The increasing regulatory demands will allow only a few suppliers - those with the necessary potential and financial resources - to stay in the market. On a broader scale, we think the regulatory gap between food and pharma is getting smaller, and that in the long term both markets will merge and have significant overlap.

To be able to grow in the future requires the highest regulatory and scientific standards, as well as sustainability and traceability; Frutarom is very well positioned to fulfil all of these demands. In the different segments, we see the fastest growth in phyto-pharmaceuticals and functional food, while in terms of regions, South-East Asia and Latin America are growing the fastest.

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