Givaudan SWOT and PESTLE Analysis

Strength

1. Market leader in flavors and fragrances with highest share: Givaudan is the world’s largest company in the flavors and fragrances industry with more than 25% market share. The company’s customized products have over 10,000 natural & synthetic raw materials for customers which have helped Givaudan to be on top of the market. They have created a special place in the value chain of the industry and have excelled in understanding consumer purchasing behavior. In the fragrance division, major revenue comes from consumer products including Home care & fabric care, active beauty growth products, and fine fragrance products. In the flavor’s division, major contributors are health & wellbeing products along with natural fragrances products. There was around 13.4% increase in flavor’s division, whereas Fragrances division saw approximately 10.9% growth for Financial Year 2019-2020. As compared to their competitors, Givaudan has maintained good relationships with multinational customers across the globe and are also focusing on reaching out to local and regional customers. This is achieved by listening to each customer on priority, partnering with them at each step of the creation & value-chain, and remaining flexible & agile in providing offerings.

2. Presence in over 181 countries globally: The organization started from Europe, and gradually ventured in various continents across oceans. Currently, Givaudan is present in over 181 countries with over 73 production sites for Fragrances and Flavours product manufacturing. This has helped them reach out to their customers, get their feedback within stipulated time, and improve their product line. As per updated figures of 2019, they have segregated their presence into 4 divisions including Asia Pacific Region (26.3% sales), Europe Africa and Middle East Region (36% sales), North America Region (26.4% sales) and Latin America Region (11.3% sales). Of the above-mentioned regions, Japan, North America, and Western Europe are considered as mature markets, and account for 57% of the total revenue. These regions are growing at a slower rate, and company now focuses on High growth markets, which include Asia Pacific, Latin America, and Eastern Europe.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Strong focus on sustainability and responsible innovation: With climate change in effect, there is strong requirement for industries to focus on sustainability and innovating their products responsibly. Givaudan has signed US pledge to become climate positive before 2050. They have also pledged to convert their entire electricity supply to fully renewable sources by 2025 and find innovative ways to become energy efficient. The company has started green chemistry for fragrance ingredients palettes and innovative forms of biotransformation in optimization of opportunities for the future. Their “FiveCarbon Path” ambitions to leverage new sustainable chemistry & biotechnology methods to deliver innovative carbon efficient molecules. Givaudan is committed to the strategy “Responsible growth. Shared Success”

2. Impact of Toxic Gas release, and Waste Disposal Management: Many Volatile organic compounds (VOCs) and other gases, including carbon dioxide, are present in significant levels during the processing and production stages of consumer products of Fragrances & Flavours Industry. These residuals remain in the products and may drastically effect during consumption. Also, there is almost zero recovery or recycle mechanism available or is being used by the industry for the disposed waste. The waste mostly ends up rotting in landfills, or in water sources, thus resulting in release of greenhouse gases in the atmosphere. Effective monitoring and detection of gases is essential to provide worker safety in the industry. Givaudan is making all efforts to resolve these issues and become sustainable. They use and discharge water in a socially equitable and sustainable manner. They assess and address water risks in each area, develop water mitigation plans, and include water reuse opportunity across their plants. They also aim to protect the environment from their waste, by reusing materials or recycling them. They target to cut their waste by 4% year-on-year with baseline 2015. Givaudan is set to replace its single use plastics with eco-friendly alternatives before 2030 with their initiative “Green Teams”.

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