12 Jun 2024 --- Nutrition and health player dsm-firmenich is on track to sell its Yeast Extracts business to Lesaffre, a global business specializing in fermentation and microorganisms. The transaction, expected to close by the end of this year, is subject to customary regulatory approvals and works council consultations.
Financial details have not yet been disclosed.
The Yeast Extracts business is part of dsm-firmenich’s Taste, Texture & Health business unit, with annual sales of about €120 million (US$128.9 million).
In a statement to Food Ingredients First, a dsm-firmenich spokesperson says: “We recently completed a strategic business and portfolio review, which was announced at our Capital Markets Day on June 3. As part of dsm-firmenich’s tuning of its portfolio, the company has decided to focus on specific business segments in the nutrition, health and beauty space, and deprioritize certain other segments. Today’s agreement is an outcome of that review.”
As part of the new transaction, Lesaffre will supply yeast extracts to dsm-firmenich for its Savory business.
“In this way, knowledge and expertise is maintained and even further expanded within Lesaffre's network of 80 production sites. The partnership will also strengthen Lesaffre’s savory ingredients business, bolstering its R&D expertise and expanding its range of high-quality products,” shares the spokesperson.
After the completion of the deal, dsm-firmenich will continue to supply yeast extracts produced in Delft, the Netherlands to Lesaffre until the end of 2025, after which point the yeast extracts production in Delft will be discontinued.
Lesaffre and dsm-firmenich are collaborating in yeast derivatives serving the savory ingredients space.As part of the deal, some of the dsm-firmenich employees working in Yeast Extracts will transfer to Lesaffre.
Lesaffre will acquire dsm- firmenich’s yeast extract go-to-market organization and know-how.
Acquiring dsm-firmenich’s yeast extract processing technologies will also enable Lesaffre to better serve customers in savory and other fermentation-based applications, Lesaffre shares.
Speaking to Food Ingredients First, Carmen Arruda, general manager of Biospringer by Lesaffre, says: “This acquisition will benefit mainly Lesaffre’s business unit Biospringer by Lesaffre.”
This acquisition enables Biospringer to offer a wider range of high-quality yeast extracts and other yeast-based solutions and “pairs dsm-firmenich’s innovation with Lesaffre’s global manufacturing and supply chain capabilities,” Arruda explains.
“As a result, this enhances Lesaffre’s capability to meet customer needs with greater efficiency and creativity and thus strengthens its position in the savory ingredient markets. Biospringer will produce dsm-firmenich’s products in its plants around the world, offering customers local supply and global contingency.
A boost for savory ingredients
Biospringer by Lesaffre will offer its customers a wider range of products and solutions to improve taste, texture and other desired properties in their various food applications.
According to Lesaffre, it is important to reinforce savory yeast ingredients, firstly because yeast extract is a natural origin ingredient derived from fresh yeast.
“Yeast extracts are safe, naturally fermented, clean label ingredients with good nutritional value. Yeast extracts and its derivatives are natural flavoring ingredients and masking solutions appropriate for most food and beverage applications, including applications such as soups, sauces, seasonings, snacks, prepared meals, animal-free products and more.”
Commenting on the demand for these ingredients, Arruda shares: “Yeast extract is one strategic ingredient for the food and beverage industry that can offer diversity in tastes and meet formulation challenges toward salt, sugar and fat reduction. Indeed, the demand for savory ingredients like yeast extract has increased due to several factors such as changing consumer preferences, growing awareness of health benefits, and the rise of vegetarian and vegan diets.”
“Today, food manufacturers face several challenges when responding to consumer trends — naturalness, nutrition and pleasure are essential criteria in the purchase decision. For example, 55% of global consumers look for natural features when buying products.”
Lesaffre has also invested in new bioscience technologies including high-throughput strain screening in the last few years. According to Brice-Audren Riché, CEO of Lesaffre, the new collaboration will help Lesaffre keep pace in a fast progressing industry and allow it to expand its business with new in-house supply capabilities.
“We look forward to welcoming dsm-firmenich employees within our group to pave with them the way for sustained growth and expanded customer diversification,” he adds.
Patrick Niels, dsm-firmenich BU president Taste, Texture & Health, also comments: “With a similar history of more than 150 years of purpose-driven biotechnology R&D and innovation, to nourish people and our planet, we have found the ‘perfect home’ for our yeast extract business and those employees who will join Lesaffre, where they will have the opportunity to further develop their careers.”
“With this transaction,” he explains, “our customers are ensured continuity of supply of the products and product brands they like and are used to — but now as part of Lesaffre’s portfolio of innovative food solutions. We look forward to working with Lesaffre on the development of yeast extract knowledge and expertise through the technology partnership agreement.”
dsm-firmenich and Lesaffre will enter a technology partnership for the development of yeast extracts.
Nutrition, health & beauty moving forward
dsm-firmenich’s strategy is to create a key global player in nutrition, health and beauty.
“Following the completion of our strategic business and portfolio review, our path forward is guided by a finely tuned strategy, prioritizing specific business segments in that space (i.e. nutrition, health, and beauty),” the company spokesperson notes.
“Our focused approach, supported by continued progress in delivering synergies, ensures we are not just moving fast but moving smart, aligning our efforts with the segments that leverage global macro trends and promise good returns and impact.”
“We are uniquely positioned and in the right market space. The rise of holistic well-being fuels market opportunities in nutrition, health and beauty. Consumers are prioritizing healthy, natural nutrition, and the share of spend on preventative health is increasing year on year.”
By Elizabeth Green
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