30 FOODTECHNOLOGY FEBRUARY 2004 • VOL. 58, NO. 2

James Giese, Internet Editor hat happens two flavor and fragrance companies, both with

strong features and honored traditions, are combined?

Some would say you get the perfect mix and a blending of

two rich cultures. That appears to be the case with Symrise, a new

corporation that was founded in May 2003 by the merger of the two long-

time fragrance and flavorings manufacturers, Dragoco AG and

Haarmann & Reimer GmbH.

Company HistoriesBoth companies came to the merger with a deep history of tradition. In

1874, chemists Ferdinand Tiemann and Wilhelm Haarmann, based inHolzminden, Germany, founded the Haarmann & Reimer company, andsucceeded in synthesizing vanillin from coniferin. Holzminden thus be-came the site where vanillin was first produced industrially.

Haarmann & Reimer was the world’s first factory in which syntheticscents and flavorings were produced. This formed the basis for an entirelynew field: the flavorings and aroma chemicals industry. In 1953, H&R wasacquired by Bayer AG, Leverkusen, Germany. In 1990, the company ex-panded with the acquisition of Creations Aromatiques and, in 1995, withFlorasynth.

Dragoco was founded in 1919 by Carl-Wilhelm Gerberding and hiscousin August Bellmer in Holzminden. Over the course of 80 years, thesmall family-operated business grew to become an international corpora-tion in the field of fragrances and flavorings. The founder’s appreciationof Asian culture led him to select a company symbol that representedgood fortune and success: the dragon. The company produced its first fla-voring compounds in 1930.

Was it inevitable that two world-class flavor companies headquarteredin the same city in Germany would eventually merge? Both companies hada research focus, but H&R, having more resources, and a focus on devel-oping new technologies. Although both companies were strong in their re-

Symrise: A Blendingof Flavor Giants

A merger of two flavor companieswith long and honored traditions hascreated a unique new organization.

W

FOOD TECHNOLOGY Feature

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spective areas, overall market forces increasingly became astronger factor in the flavor industry. Increasingly, there wasprice pressure on food companies as well as on their flavor andingredient suppliers. By 2000, there had been an unbrokentrend of consolidations in the aroma/flavor/fragrance indus-try—in 1995, 10 companies made up 59% of the market share,but by 2000, eight companies had 71% of the market share.

Swedish financial investor EQT Northern Europe PrivateEquity Funds acquired H&R and a minority interest in Drago-co in July 2002, with the objective of merging the two compa-nies. The company’s headquarters remain in Holzminden. In2002, both companies generated sales of about 1.24 billion.This represents a 3.2% rise in sales compared to the perviousyear. This sales growth was generated, in particular, in the fla-vor segment, where sales rose by 6.2%, as well as by the regionsof Europe (+ 6.1%) and South America (+ 7.5%).

According to the company, the Symrise name is linked withits new corporate logo that combines Dragoco’s dragon symbolwith H&R’s hummingbird symbol to form a single entity.Commenting on the new logo, Ray Hughes, President, FlavorsNorth America said, “The logo presents a graphic rationale ofwhat our signature line, “Creating brands. Supporting brands”means to our customers. It’s a visual representation of how ourbusiness focus, core competencies, and global expertise aresupporting the brands customers create.”

Symrise StructureSymrise employs about 5,800 people worldwide, including

2,800 in Germany. The company has subsidiaries on all fivecontinents.

Horst-Otto Gerberding as president of Symrise oversaw the

merger with H&R to create Symrise, and then became ViceChairman of the Board of Symrise in September 2003. Follow-ing the merger that created Symrise, he managed the criticalintegration phase, bringing together more than 5,800 employ-ees in 29 countries. According to the company, the merger rap-idly improved the profitability of the business, while continu-ing to strengthen its multinational customer base.

In his new position as Vice Chairman of the Board of Sym-rise, Gerberding will help oversee the company’s strategic di-rection and help position the company for a potential IPO overthe next 3–4 years. In addition, he will join EQT’s German Se-nior Advisory Group.

James Forman was named Chief Executive Officer, effectiveOctober 1, 2003. Forman spent the past 18 years working inEurope in a number of increasingly responsible general man-agement roles in multinational consumer products companies.Most recently he was CEO of Stollwerck AG.

In North America, Ray Hughes is President of the FlavorDivision; John Cavallo is Senior Vice President, Strategic Busi-ness Unit, Beverage; Anton Angelich is Vice President of theSweet Business Unit; Domenick Luccarelli Jr. Vice President ofthe Savory Business Unit; Matthias Guentert is Vice Presidentof the Flavor Innovation Center; and Michael Springsteen isVice President of Sales.

In addition to the company’s global division structure, theFlavor Division is structured into strategic business units thatare responsible for the global development for each of its prod-uct categories: Savory, Sweet, and Beverages. These businessunits are in charge of consulting for clients’ brands, developingstrategic corporate goals, global expertise, and developing corecompetencies. The business units use marketing, development,

Technician using vacuum headspace technology on strawberries.

32 FOODTECHNOLOGY FEBRUARY 2004 • VOL. 58, NO. 2

Symrise

Flavor Development Center located in Holzminden, Germany (above) andthe vanillin patent issued in 1874 to Holzminden chemists FerdinandTiemann and Wilhelm Haarmann (left).

and application teams to work on individ-ual client projects. Another task of theunits is to support the national Symrisecenters in their marketing and develop-ment tasks as well as establish and main-tain best-practice manufacturing process-es. The regional business units know thetaste preferences of local consumers. Theydevelop individualized concepts for eachmarket and adapt global con-cepts to regional needs.

• The Savory Business Unitis a team of chefs, flavorists,seasonings specialists, and culi-nary technologists spreadacross four regions. The teamdevelops new products playingoff culinary trends in soups,sauces, ready meals, and snackfoods. The unit focuses on fla-vor categories in the vegetableand meat area supported by abranding program. Accordingto the company, a trend towardgreater convenience, dimin-ished cooking times, homemeal replacements, new waysof snacking, and ethnic diversi-ty clearly indicates stronggrowth potential in culinary and snack-food segments over thecoming years. In particular, the seasoning market offers attrac-tive growth opportunities. Dry blended seasonings are used forapplications in snack foods, pot noodles, crackers, and food-service products.

• The Sweet Business Unit is a global network of dedicatedconfectionery, bakery, ice cream, and dairy innovation andbusiness development teams. H&R was a historical pioneer inthe synthesis of vanillin. Over the years, the company hasgreatly extended this expertise with vanilla, mint, and citrusflavors. H&R brought to Symrise significant technology in thesensate area, namely cooling, tingling, and heat sensation prod-ucts. These are used frequently in confectionery products. Thecompany has had a long history in the creation of syntheticmints with its Optamint line. The company has a strong port-folio of Red, Berry, and Brown flavors for sweet goods applica-tions. Cocoa replacement endeavors can be enhanced with thecompany’s cocoa and chocolate reaction flavors. The SweetBusiness Unit has one of the widest ranges of encapsulatedproducts in the flavor industry. It also has a strong researchcommitment to trend tracking and to understanding consum-er needs.

• The Beverage Business Unit is responsible for all activi-ties that have to do with beverage consumption. This group de-velops flavoring compositions for alcoholic, nonalcoholic, andpowdered beverages. Symrise is a leading supplier of flavorings,emulsions, and raw materials in the international beveragemarket. The flavorists in the beverage area work exclusively inthe composition of flavorings for use in beverages. This grouputilizes a modular concept, which involves working processingtechnologies, flavoring compounds and other compunds intoone ingredient solution. The company offers clients completeinformation on these modular ingredient systems, allowing

them to decide—based on their own production capacities—atwhich stage of the production process to introduce their ownraw materials. Symrise then formulates a flavoring or a bever-age compound which can contain vitamins, minerals, and nat-ural plant extracts in addition to flavoring and juice. The mod-ular development process makes it possible for Symrise to re-spond to client needs with customized solutions.

Pilot-plant facilities are used to simulate the industrial con-ditions under which emulsions and raw materials are manufac-tured. This guarantees maximum safety and optimum productquality for the beverage manufacturer. The newest extractionmethods provide special natural flavorings (known as recoveryflavors) from fruits such as oranges, lemons, grapefruit, andpassion fruit, as well as berry flavorings like raspberry andstrawberry—in authentic flavor profiles. These products serveas the basis for new taste combinations in applications wherethe clients want to use natural ingredients exclusively.

Symrise has also developed precursor technology for alco-holic beverages. This allows manufacturers to attain a full-bod-ied and well-rounded flavor in less time. This technology al-lows the beverage to develop its full flavor in less time and theflavor maturing period can be reduced to the legal minimum.

According to the company, natural plant extracts and distil-lates give added value to functional products. They create newaccents in the beverage’s taste profile. The company claims thatby creating these natural flavoring substances, they can moni-tor and govern the entire value chain — from selecting the rawmaterials to choosing the appropriate processes all the way tothe manufacturing procedure itself.

R&D EffortsSymrise invests about 8% of its annual sales in research and

development. The company considers its R&D investments amajor factor for long-term success. In addition to basic re-search, R&D activities also include the elucidation of increas-ingly scarce natural complexes, followed by the development of

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cost-effective processes for synthesizing key constituents.Symrise’s key flavor-related research activities include the

development of natural flavor components through the utiliza-tion of biotechnological, fermentative, and physical processes,as well as the search for new methods of synthesizing nature-identical flavor compounds. The basic development of flavorsdeals with the transformation of research findings into flavorcompositions and the development of new food applications.The R&D team also continuously works to develop and en-hance production processes. The company is especially drivenby a desire to constantly optimize process technologies with aview to ecological aspects. In addition to high product qualityand optimum cost-effectiveness, comprehensive environmentalprotection and the utmost in safety are factors that enjoy equalpriority as corporate objectives.

The primary objective of the company’s R&D operations isto actively and creatively support the brand concept of its cus-tomers, thereby creating successful innovative products. Thestructure of the whole R&D department mirrors the structureof the operating divisions and also contains groups dedicatedto analysis and technology. There is also a group the works onpilot plant research for scaling-up chemical syntheses.

Corporate R&D has about 200 employees including some35 Ph.D.s, most based at headquarters in Holzminden. An ad-ditional group is based at the North American headquarters inTeterboro, N.J.

The vast majority of Corporate R&D’s active researchprojects are very closely connected with their customers’ needs.This helps ensure that R&D works closely with the creation,application, and business development teams of their FlavorDivision and other divisions.

Much of the R&D work results in patents being applied forand granted. This is mainly the case in the areas of new mole-cules, delivery systems, and production and application tech-nologies.

Interface of Research and BusinessSymrise has established a comprehensive global process of

flavor innovation that integrates all the important elements ofthe innovation chain. Starting with the needs of key customersaround the globe, the company uses key account and businessunit planning to define mid- to long-term strategies. Thesestrategies and specific customer needs are then translated intodefined innovation projects.

Flavor innovation is organized around the four regionalcenters, with two Innovation Centers for the Europe/Africa/Middle East and North America regions. The Innovation Cen-ter in North America is under the direction of Vice PresidentMatthias Guentert (see sidebar on page xxx). Together withtwo global teams of experts for the key fields of citrus and culi-nary flavors, the Innovation Centers conduct proactive projectsthat lead to a continuous stream of new products and conceptsfor the company’s internal customers, the various businessunits, as well as for their key accounts throughout the world.Corporate research, based in Holzminden, is constantly pro-viding the latest technologies in such areas as new flavor mole-cules, encapsulation technologies, or product performance,which are then translated into commercially viable solutionsby the innovation team. High-level management committeessteer and monitor all of the innovation projects to ensure thatprojects are prioritized to drive commercial success.

The underlying philosophy is to link both elements—the

technology push and market pull—through defined businessownership, strategic innovation management, and a global net-work approach to provide customers with innovative conceptsand ideas wherever they might require them. The innovationnetwork thus assures that knowledge is globally shared andsuccessfully applied to the benefit of the company’s customers.

OutlookSymrise intends to expand its worldwide position in the fra-

grance and flavor industry. Key growth factors include thecompany’s complementary product portfolio, numerous prod-uct innovations, and increased R&D activities. During 2003,the company found strong growth coming from the expandingmarkets of Asia, South America, and Eastern Europe as well asthe established markets of Western Europe and North America.

In the global food market, flavor manufacturers are beingpresented with new challenges. The industry standards nowinclude providing a global presence, clearly defined core com-petencies, core-suppliers status, new technologies, and inno-vative products. The company is seeking to expand its posi-tion as the third-largest manufacturer of flavorings world-wide and will work with clients to create new, successfulbrands. ●

Profile: Matthias GuentertJust like the company he works for, Matthias Guentert has a stronghistory of tradition. He grew up in Holzminden, Germany, alongsideboth Dragoco and H&R.After receiving a Ph.D infood chemistry, hestarted his career withH&R in 1986. He joinedits flavor division in1994, and in 1999 hewas chosen to head upthe division’s researchefforts. When the twocompanies merged in2003, he was appointedto his present position ofVice President ofSymrise’s FlavorInnovation Center inNorth America.

Guentert is in a unique position, serving as an interface betweenbasic research and the various business units. The Innovation Centerhelps drive the input strategy for flavor research initially, as well astranslates and transfers that research into practical technologyapplications for the business units. The focus of the Center is tomake the research process and eventual application more efficient.

Although his job is made easier in one way because of thesignificant investment that the company makes in research, he isresponsible for making that investment pay off.

Guentert has been a member of the Institute of Food Technolo-gists since 2000 and says that his membership is of most value inhis interaction with other team members who are food technologists.