Givaudan weighs options for natural ingredients unit to restore growth in flavours

By Rafal Wojciech Nowak

Aug 27 (Reuters) - Givaudan is reviewing options for the underperforming natural ingredients unit within its flavours business, CEO Christian Stammkoetter said on Thursday, as part of a broader push to return the division to earlier growth levels.

Shares in the Swiss fragrance and flavours maker were down 3.4% by 0940 GMT, after Morgan Stanley lowered its recommendation for the stock to "underweight", citing recent sluggish growth in the flavours division due to its unfavourable mix of products.

Stammkoetter told an investor conference that commoditised natural ingredients, such as vegetable powders, were creating significant headwinds for the division, particularly in North America.

The underperforming portfolio accounts for roughly 7% of the flavours division's sales, which grew only 0.5% on a like-for-like basis in the first half of 2026, lagging the 6.5% growth seen in the fragrance business.

The flavours business averaged 5.4% annual like-for-like growth between 2021 and 2025, the company said in a presentation.

To revive the division, Givaudan will also sharpen commercial execution in the Americas and accelerate its high-growth natural colours business, Stammkoetter added.

(Editing by Milla Nissi-Prussak)