The Geneva-based firm reported a 0.3 per cent drop (in local currency) for the group to CHF2.06 billion (€1.32bn), but the flavour division saw a 0.9 per cent rise in sales to CHF1.23bn, up from CHF1.22bn for the same period in 2003.
Beverage and dairy sales were knocked in Europe due to 'adverse weather conditions and strong comparables' that saw a hot summer in 2003 spear ice cream and beverage sales but a lift in savoury sales, thanks 'to a strong product pipeline', helped the sales input.
The Swiss company, that pulled in sales of CHF2.71bn (€2.1bn) last year, has about a 13.5 per cent share of the global flavours market, rapidly followed by US firm IFF with nearly 12 per cent of this competitive, and innovative, industry.
The US and western Europe combined account for about 58 per cent of the global flavour and fragrance industry, but with growth slackening, the industry must look towards new markets and product innovations, highlights a recent article from Frost and Sullivan analyst Vivek Tapuria.
Givaudan told FoodNavigator.com that it rolls out about 2,000 to 3,000 new flavour products each year, approximately 20 per cent of the total 10,000 to 13,000 products coming out of the firm to target the flavours market currently growing at about 2.5 to 3 per cent.
Such development of new flavours and fragrances involve difficult to duplicate research and technical capabilities that create a barrier to entry for the top five flavour houses that can claim about 50 per cent of total flavour sales.
Formulas can involve more than 500 ingredients - natural or synthetic - and subtle changes to single ingredients can dramatically alter the final product.
"The production of high-quality flavours can involve the extraction of natural ingredients in bulk from all over the globe, the selection from thousands of natural and synthetic ingredients, the appropriate blending and mixing these ingredients, and the 'mouth' or 'nose' for testing the desirability of the resulting product," says analyst Vivek Tapuria.