The acquisition will strengthen Givaudan’s foothold in the growing natural flavors sector and move it into a leading position in natural extracts and ingredients market, which is predicted to grow as consumers make the shift from synthetic food ingredients to natural, clean label alternatives.

In the first step of the transaction, Givaudan will acquire 40.6% of Naturex’s shares at €135 per share. Following the acquisition, Givaudan will launch a mandatory cash tender offer for all remaining outstanding shares of Naturex for the same price per share.

Naturex, which had €404.9 million in sales in 2017, develops a range of natural ingredients derived from plant extracts and operates 16 production sites throughout Europe, North America, South America and Asia. Givaudan, which creates flavors and fragrances for the food, beverage and fragrance industry, had sales of 5.1 billion Swiss francs in 2017.

Commenting on the acquisition: Olivier Rigaud, CEO of Naturex, said: “This combination is supported by a strong strategic rationale with an ambition to become the leader in natural ingredients. We are proud to become part of Givaudan and leverage the complementary capabilities for our customers.”

“He who has the ‘gold’ rules,” goes a famous saying. For co-packers, otherwise known as contract packaging organizations, the “gold” is measured by the heavy weight of the truthfulness in its advertising: the capacity to do all it says it can do; a quality team that sets it apart from the rest; and a “5-star-rated” facility, identified as a model in the industry.

In today’s technologically driven businesses, outsourcing to co-packers is the choice packaging method for enlightened dietary and food supplement manufacturers and distributors. Gravitating toward innovative contract packagers for their market-savvy expertise allows brands to focus on their core competencies and product development.

Co-packers have always been a key but quite often unnoticed, service, supply-chain “middle-man” in this industry with the focus primarily on contract manufacturers. More recently, the spotlight is on raw ingredient material suppliers, due to looming enforcement of various FSMA (Food Safety Modernization Act) requirements. But, as the industry grows, so does the need for outsourced expertise. This makes for greater visibility of co-packers to FDA, given their role as an extension of these manufacturers—an accountability that drives co-packers to meet FDA requirements.

For a co-packer to maintain its competitive advantage, attract and keep new customers, and remain profitable, here are five “golden rules” they should follow:

1. Truth in advertising

One of the first steps most manufacturers and/or own-brand distributors take in sourcing a co-packer is via the least costly: Internet searches. Co-packer webpages are examined and information gleaned by a company’s procurement and/or compliance group. “A picture paints a thousand words,” the saying goes, and quite often, “paint” is exactly what some co-packer websites merely do. Drawn by typical buzz phraseology—“state-of-the-art”, “years of experience,” cGMP (current good manufacturing practice), and organic or trade association accreditation logos—contract customers are wooed to make the first call. After a few exchanges of information and desired product packaging service discussions, deals made over the phone become disasters when the finished packaged product arrives on the customer’s dock with multiple non-conformances, or worse, distributed directly from the contract packager’s facility to market without being compliant.

Brands must ensure their co-packers’ websites depict the same integrity of services and information as would be found upon inspecting their facilities. The website is the first line of engagement of trust and the virtual doorway into the establishment.

2. Facility design, capacity and space

Most co-packers service multiple customers and package multiple products. Having adequate space and a clean, well-equipped facility is key to providing capacity and increased production for the customer. Suitable size, construction and design is an FDA requirement stipulated in the various subparts of the food and supplement regulations (21 CFR 110 Subpart 110.20(b); 21 CFR 117.20(b); and 21 CFR 111.20).

Updated and automated equipment gives rise to increased efficiency and manageable inventory systems as well as readily available material resources. These factors serve to facilitate flexibility for customer changes and an occasion for brands to expand their production, while still obtaining rapid turn-around times. Consequently, brands are to likely experience less capital costs and increased opportunity to focus on creating new product launches.

3. Compliance experience, highly trained and qualified staff

Co-packers should be well versed in the contract customer’s product regulations (e.g., 21 CFR Part 110/Part 117; 21 CFR Part 111), with qualified, experienced, technical personnel to oversee and lead in this area. Technical expertise, support of the customer’s packaging needs and design, and proper regulatory and quality oversight from start to finish displays intentional collaboration and commitment to ensuring a mutually beneficial outcome. Co-packers are an extension of the contract customer. Providing the finished packaged and labeled product is a crucial deliverable for the manufacturer and/or brand owner.

4. Adherence to customer specifications and requirements

Co-packers must be aware that they are equally responsible for ensuring compliance of the brand owner’s finished product. Therefore, before receiving inbound kits (e.g., customer product and components) for packaging or proceeding with any production runs, co-packers must ensure they understand the product and packaging specifications provided by the customer. This must be finalized and ensured as FDA regulations are applicable to the co-packers. Although co-packers typically perform a fraction of the production and processing of a finished dietary and/or food supplement or product, co-packers must be able to show compliance with applicable regulations, particularly if it is also involved in co-manufacturing the customer’s finished product (i.e., further processing their product, then packaging). Co-packers that return either bulk packaged product or semi-finished unit product (e.g., un-labeled bottles) to customers are still required to adhere to regulations (e.g., see 21 CFR 111 Subparts G; Subpart L among others).

5. Quality Agreements (QAs)

QAs are becoming an industry best practice, as it serves to define the required cGMP responsibilities of the service provider and contract customer. QAs also help avoid confusion and unnecessary disagreements in times of product and/or packaging issues. They help enhance and solidify partnerships; therefore, it is highly recommended that the co-packer provides a QA in the absence of the customer not presenting one of its own. Keep in mind however, there is no rule against both parties exchanging each other’s QAs, if desired.

Co-packers willing to follow these five “golden rules” are more likely to increase their competitiveness to attract and maintain sustainable contract packaging partnerships, and thus, increase their profitability.

Heather Fairman is an independent consultant with EAS Consulting Group LLC and serves as Technical Advisor for the SIDS DOCK Island Women Open Network (IWON, sidsdock.org), an intergovernmental organization of Small Island Developing States (SIDS), which has all the rights and privileges of a United Nations organization comprised of 32 countries and who are embarking on developing a raw material market for the herbal supply-chain. With almost 30 years of combined quality assurance (QA)/quality control (QC) and regulatory experience gained from FDA-regulated industries, Heather applies her regulatory perspective and approach toward handling FDA matters and compliance requirements relative to all aspects of cGMP (current good manufacturing practice) and development of contract partnerships to ensure mutually beneficial and compliant outcomes. She holds a bachelor's degree in biology and a master's degree in medical microbiology from Long Island University.

The FAO Food Price Index averaged 170.8 points in February, up 1.1% from January but just 2.7% below its year-ago level.

The Cereal Price Index averaged 160.8 points in February, up 2.5% from January and 6.8% from February 2017. The increase in February marked the second consecutive month of notably strong month-on-month rise in the value of the Index after a relatively stable period from August to December of last year. Grain prices were generally firmer in February, underpinned by a brisk trade activity and concerns over unfavorable weather adversely affecting the U.S. winter wheat and Argentina’s maize growing regions. FAO also lowered its projections for worldwide wheat harvests this year, while noting that inventory levels are poised to hit a record high.

The Vegetable Oil Price Index averaged 158 points in February, down 3.1%  from January, to reach its lowest level in 19 months amid prospects of a growing global production surplus in the current year. Palm oil prices dropped the most, reflecting rising inventories in Malaysia and Indonesia, while expectations of record soy crushings in the U.S. weighed on soybean quotations.

The Dairy Price Index averaged 191.1 points in February, up 6.2% from January but still slightly below the corresponding period last year. International price quotations rose for butter, cheese and whole and skim milk powders (SMP). Butter price quotations surged nearly 6% after declining for four consecutive months.

The Sugar Price Index averaged 193 points in February, down 3.4% from January and hitting its lowest level in two years. International sugar prices remained under downward pressure, as production by major producers such as Thailand and Indi, continued to expand production and market participants brace for a sharp rise in output in the European Union due to higher beet yields coupled with larger plantings after the removal of output quotas last year.

The Meat Price Index averaged 169 points in February, unchanged from its slightly revised value for January 2018 and almost 5% higher than at the same point last year. An increase in price quotations for bovine meat was offset by decreases in poultry and pig meat quotations, while those of ovine meat remained almost unchanged.

The up-and-coming trends no doubt will be making their way into new food and beverage product launches as well as the restaurant sector.

Flavor trends include a deeper dive into the Mediterranean Sea; consumers that are making healthy-ish decisions; ingredients found at the intersect of the world’s grid; chefs using a touch of cleverness in the unexpected; an inspiration from our social surroundings; and a “bao of respect” to well-known Chinese provinces of the culinary world.

Here are Bell’s six up-and-coming Spark Flavor Trends:

Touched by the Mediterranean

This trend takes consumers on a journey around the Mediterranean Sea near the Northern coast, filled with an abundance of fresh seafood, and learn the various citruses, crafted-liquors, cheeses and seasonings reigning from this region.

Healthy-ish

Consumers are all about eating healthy without sacrificing taste. This trend explores what’s nutritionally good and making it (actually) fun to eat—by exploring those healthier alternatives and flavor enhancers that create well-balanced and tasty dishes but also make food selection decisions kind of “healthy-ish.”

Longitude and Latitude

Imaginary lines across the globe create a grid of exploration and intrigue for many chefs with the need to learn about new ingredients and flavors.

Unexpected

This 2018 trend combines several perfectly crafted executions with a special dash of surprise that keeps people coming back for more using unexpected flavors nuzzling their way into dishes.

Outdoor Social

This trend zeroes in on foods and beverages that can and should be enjoyed everywhere, and it seems like we all enjoy it just a smidgen more when that “place” is outside.

A Wok Through the Provinces

Move over crab rangoons and fried rice—the world is finally discovering the robust culinary repertoire of China’s eight food regions and their palette-tickling diversity.

The Bell Spark® trend program has evolved over the years to become a dynamic program that analyzes different data points combined with consumer insight to generate trend forecasts for flavor and fragrance predictions and concepts.

“Each year Bell validates our past predictions to see where they have matured in the market place and our success rate has been spot on for each Spark® trend further validating our unique trend curation process. We are excited to ignite your creativity and inspire your senses for future flavor and fragrance developments,” said Kelli Heinz, vice president of marketing, Bell Flavors & Fragrances.

Food Insider Journal recently explored the popularity of ethnic foods and authentic flavors and how it will affect new product development. Download the “Ethnic Flavors Feeding Product Innovation” digital magazine to learn how brands are tapping into new market opportunities in virtually every category in the food and beverage market.

FDA issued guidance explaining how it evaluates whether an ingredient meets its regulatory definition of dietary fiber; a draft guidance on added sugars in honey, maple syrup and certain cranberry products; a final guidance on labeling of honey and honey products; a final guidance on reference amounts customarily consumed (RACCs); and a small entity compliance guide for the Serving Size final rule.

Defining Dietary Fiber

On May 27, 2016, FDA published its first evidence-based definition of dietary fiber. Prior to that date, food and beverage manufacturers could declare synthetic or isolated fibers as dietary fiber on the label, even if they did not have a physiological effect that is beneficial to human health.

The 2016 evidence-based definition allows naturally occurring fibers in fruit, vegetables and whole grains to be considered fiber, as well as seven other isolated (i.e., extracted from plant sources) or synthetic non-digestible carbohydrates (NDCs) or synthetic fibers that are well-recognized by the scientific community for having physiological benefits.

“We’re also aware of evidence that other isolated or synthetic fibers could also benefit human health, such as improving glucose and cholesterol levels, increasing frequency of bowel movements and increasing satiety, which can lead to a reduced calorie intake,” said FDA Commissioner Scott Gottlieb, M.D.

In a change from the draft science review guidance, FDA now will consider evidence from studies with subjects who have a disease associated with the beneficial physiological effect of interest (e.g., lowering blood sugar and/or insulin) in considering whether the research supports a finding that an NDC may have a beneficial effect in “healthy” individuals who do not have the disease. Reducing the rise in blood sugar or glucose levels after people consume a food or beverage would be an example of a physiological effect that is beneficial to human health.

In the final guidance, published March 2 in the Federal Register, FDA clarified that for a study to assess whether an NDC reduces blood glucose and/or insulin levels, the NDC should be added to a food or beverage containing sugar or starch and should not replace any sugars or starches since those refined carbohydrates cause the rise in blood glucose levels. It is also important that the NDC is added to a food or beverage with the same amount of sugar or refined carbohydrate as in the food or beverage that is provided to the study’s control group.

A manufacturer may submit a citizen petition for FDA’s consideration to add a given isolated or synthetic NDC to the FDA’s regulatory definition of “dietary fiber.” The petition should provide scientific evidence that shows the NDC has a beneficial physiological effect on human health.

“Our goal is to provide more detail on our scientific principles for evaluating the fiber products and these petitions.” Gottlieb said. “We want to give the food industry clear guidance on how to meet the new standards before we make final decisions on these petitions. We’ll give petitioners who may want to add information to their petition the opportunity to revise those filings based on the more detailed guidance.”

Gottlieb said FDA has been evaluating data submitted from the food industry in petitions on various NDCs and will communicate its decisions on these petitions soon.

Added Sugars

FDA also issued draft guidance to help industry declare added sugars on the label of honey, maple syrup and certain cranberry products.

While honey and maple syrup meet the definition of added sugars, there were concerns from industry that declaring added sugars on the single-ingredient products may lead consumers to think pure products, such as a jar of honey or maple syrup, contain added table sugar because added sugars are listed on the Nutrition Facts label. FDA also heard from cranberry juice manufacturers that their products need to be sweetened for palatability because cranberries have less natural sugar than other fruits.

“Our draft guidance addresses these concerns by stating our intent to allow manufacturers to use a symbol immediately after the added sugars daily value, directing consumers to language that provides truthful and not misleading contextual information about ‘added sugars’ and what it means for each of these specific products,” Gottlieb said.

The symbol † would be used immediately after the added sugars percent Daily Value (DV) information on certain foods.

“The draft guidance would explain that we intend to consider exercising our enforcement discretion for the use of this symbol on single-ingredient packages and/or containers of pure honey or maple syrup, and certain dried cranberry and cranberry juice products that are sweetened with added sugars and that contain total sugars at levels no greater than comparable products with endogenous (inherent) sugars, but no added sugars,” Gottlieb added.

Serving Sizes and RACCs

FDA also provided guidance on appropriate RACCs for a variety of products to aid manufacturers in determining the appropriate serving sizes to include on the labels of their products.

Under the final rule, regardless of the size of the RACC, all products that are packaged and sold individually and contain less than 200% of the applicable reference amount for that product must be labeled as a single-serving container. However, if the product is more than 150% and less than 200% of the applicable RACC, the manufacturer may voluntarily provide an addition on the Nutrition Facts label, to the left of the column that provides nutrition information per container (i.e., per serving). The voluntary column would list the quantitative amounts and the percent DV per common household measure that most closely approximates the RACC.