Givaudan completes Custom Essence acquisition in move to grow fragrance presence
06 Dec 2021 --- Givaudan has completed the acquisition of US-based fragrance creator Custom Essence. Givaudan’s annual revenue is projected to increase by tens of millions as a result.
Business through Custom Essence would have constituted around US$40 million of incremental sales to Givaudan’s 2020 results on a proforma basis. Further financial details have not been released, but the acquisition is funded using existing resources.
The move is a part of Givaudan’s ongoing strategy to develop a more substantial presence within the international fragrance market by 2025.
Seizing market opportunities
The acquisition was first announced last month, and touches upon a growing market for lesser-known labels and natural cosmetics.
A family-owned business with just 70 employees globally, Custom Essence has been in operation since 1981.Custom Essence intends to use the acquisition to scale up its market presence and further enhance the quality of its products. It has had a significant foothold within the fragrance industry for several decades. The company boasts a team of perfumers who are also formally educated chemists.
The fragrance house focuses on producing natural fragrances, which have grown in recent years.
Custom Essence brand is also the maker of ClairSent, a malodor reduction technology.
Increasing earnings per share
Over the past three years, Givaudan has increased its earnings per share by an average of 4.3% annually. The company projects that acquiring Custom Essence will garner even greater success.
The company has long been active in the fragrance space, with recent activities including the creation of the Z-biome Platform. The brand has also recently opened a Digital Space in Shanghai this year to compliment its Parisian Digital Space, opened in 2019.
In its financial results for the first three quarters of 2021, Givaudan reported a significant sales increase in its Fragrance & Beauty segment. Specifically, there was a continuation of the good performance from Fine Fragrances and Active Beauty, with both segments having already shown a strong improvement in the first half of 2021.
This may be spurred by other investments in this space, such as CHF 75 million (US$81 million) for a new extension to its Pedro Escobedo production facility in Mexico to promote its growth in Latin America.
By Olivia Nelson
