IFF opens Creative Center in Shanghai

With an investment of $100 million, the United States-based IFF officially opened the IFF Shanghai Creative Center, the most leading-edge facility among the company's 50 creative centers around the world, on Oct 25.

Equipped with the most modern tools, the facility is also the most integrated with all the company's business sectors located together so that staff can work across business units, including food ingredients, flavors, scents, health and biosciences, to create solutions for customers.

"China is a $1 billion market for the company today, the second-largest market worldwide for us, and I expect it to grow faster than the global rate," said Erik Fyrwald, chief executive officer of IFF, a company with a history of 135 years and first entering China in 1981, in an exclusive interview.

People want healthier versions of products nowadays, but still taste the same great way, he said. Also, they want their clothes to smell good when they wash them, and that the clothes are cleaner without the use of synthetic chemicals.

"We have the innovation to meet consumers' desires. That's why we have the new center here to get better work with customers and to co-create new products that drive the company's growth in China," said Fyrwald.

IFF China should be growing in high single digits — more than 5 percent per year — for the next few years, he said, adding that the company will invest more in the China market in the future.

"This year alone, we've achieved an 8 percent increase across all our business units in China. Notably, our enzymes, flavors and scent businesses have outperformed expectations, driving exceptional growth," Fyrwald said.

"I believe the market here will continue to grow and interact with the rest of the world to bring ideas from the rest of the world to China, and bring ideas from China to the rest of the world," he said, adding that the center in Shanghai will be an important component in the company's global innovation network.

The Shanghai center involves more than 20 labs, fragrance innovation studios and culinary demo kitchens, offering a full range of sensory evaluation facilities, covering the process from concept design to commercial production.

For example, recognizing the diversity in taste preferences in different regions of the vast country — where even spicy chilli taste in one place varies a lot from that in another, the company dives deeply into tailoring their offerings to resonate with the unique characteristics of each market segment and replicates the tastes with their flavor solutions.

Fyrwald said that he sees many areas of growth for IFF globally and specifically in China. They include the business of flavors, fragrances, home and personal care. They include probiotics as well, as China is one of the world's two largest markets in terms of gut health for IFF.

"Positive scents help improve people's emotions, making them feel relaxed and happy. People also prefer using different fragrances for different emotions that they want to trigger," he said.

In terms of manufacturing, the company has six sites around China that make products across its business sectors. In addition to supplying the local market, the sites export more to many parts of the world, including Asia, Europe and the Americas.

According to data by market consultancy iiMedia Research, the market size of China's flavor and fragrance industry was 43.9 billion yuan ($6.18 billion) in 2023, and it is expected to exceed 50 billion yuan in 2026. China is already one of the world's most important markets for flavors and fragrances, and is developing in the direction of high-end, digital and green.