FNU: What new projects are you working on?
DR: CBD is definitely a new area of opportunity. We’re doing a lot of work on CBD, which has some off notes similar to pea protein but a bit more intense, a kind of green tomato-like flavor, so we’ve been working on some amazing masking products that we’ve now launched to some of our customer base. The majority of the CBD work we’ve done has been in beverages, but we’ve also worked on some baked goods.
We’re also doing more work in meat alternatives, where there’s a need to counter some of the 'beany' flavors you get in plant-based proteins.
Another area of growth is in sports nutrition products and powdered beverages in particular. When it comes to flavors, the indulgent side is still pretty hot, ice cream flavors, baked goods flavors and so on, plus we’re seeing more exotic fruity flavors in pre-workout products, so mango with Dragonfruit, for example.
FNU: What flavor trends are you monitoring as we head into 2020?
DR: We see botanicals and floral flavors coming through a bit more and growing interest in cardamom, lavender, juniper, and sakura (cherry blossom), which I think we will see more of because of the Olympics in Japan [Tokyo] in 2020, so anything Japanese I think will be trending.
Fermented flavors are also a big growth area. We do flavor kits, where we send 10 flavor samples to customers, and our fermentation kit is by far and away the most requested, as it ties into interest in gut health and international flavors. We have done a lot of work with everything from Gochujang [Korean red chili paste that has sweet, savory and spicy notes] to sambal [an Indonesian chili sauce/paste] to doenjang flavors [fermented soybean paste similar to a Japanese miso, but with a coarser consistency and stronger taste].
FNU: What hot button issues are impacting the flavors market right now?
DR: One issue is the new rules surrounding organic flavors [from December 27, companies using the organic seal have to use organic certified flavors if they are commercially available]. This also affects glycerin, which is a key carrier in the flavor industry. So you used to have conventional glycerin, organic compliant glycerin [ie. it meets organic criteria but hasn’t been through a third party auditing/certification process], and organic certified glycerin, but now that middle category is going away because the organic certified products have to be used if available, so we’ve been working on this over the past 12-18 months
The biggest pinch point we’ve seen has been the turnaround time by the third party organic auditing/certifying companies because they have been inundated by last minute requests as everyone is now realizing the rules are changing, so what used to take 3-4 days is taking upwards of a month and a half.
FNU: Do you predict further consolidation in the flavors industry?
DR: Yes, we predict further consolidation within the flavor industry where the top 20 global flavor houses will look at the other flavor houses for technological advancements that fit into their business models for expansion into a specific customer or entering a new geography. At T. Hasegawa, we have some irons in the fire, which I obviously can’t talk about…
FNU: How is T. Hasegawa differentiating itself in the global flavors market?
DR: We’ve found a lot of success because of our speed to market. Our purchasing team and supply chain managers are also working to differentiate ourselves through building better supply chains for our natural ingredients as well as organic and clean label flavors.
On the R&D side, our team has also done extensive research in flavor release in categories such as energy and nutrition bars and we’ve also been developing more technologies within the reaction flavor classification as we see this as one of our core competencies that separates us from the pack.
This fiscal year we are bringing some new technologies to market with flavor maskers, enhancers and category specific flavors to follow trends of global and exotic.
On the sustainability, side, our operations team is consistently looking at ways to be more sustainable and reduce costs at the same time. We have implemented initiatives throughout the company to reduce our impact on the environment.
As for flavor production technology we have developed some proprietary techniques in encapsulated spray dry flavors, maskers and enhancers that build better stability of the flavor while bringing a bigger impact of flavor to the customized solution we are working on with our customers.
FNU: How is your customer base evolving?
DR: We work with some of the world’s largest companies, but we also work with startups in the beverage space after vetting them and understanding their business strategy, and if it aligns with our development we will work with them because if we partner with them and they do get scooped up by a big company, we’ll stand to benefit.