A world of flavours Lucta Group

A woRLd of fLAvouRS

Lucta Group, a leading Spanish and international flavour, fragrance and feed additive producer, has enjoyed seven decades of progressive growth. Today, the company runs a global operation and looks at further expansion.

Lucta, a specialist in flavours for the food and drink industries, feed additives for animal nutrition and wellbeing, commemorates its 70th anniversary in 2019. The family-owned business has developed into a global player with a footprint on four continents and an excellent market image.

“The company has a matrix organisation, with functional and geographical hierarchies. This fosters international cooperation across business units and allows autonomy and decision making on a regional level, as attachment to local preferences is deeply rooted in the human experience, and because social and cultural differences vary from one geographic region to another,” explains Mr Manuel Garcia, the Group Director of the Flavours Division.

He points out that Lucta’s global operation today includes five creative centres and five manufacturing sites with 993 associates of 35 different nationalities. “Our extraordinarily talented and experienced human team has been one of the factors behind our market growth. Our skills level is high - every other employee of our company has a university degree, and almost one out of three work in the R&D area.”

Growth by innovation

Traditionally, the Group’s core business has been divided into three divisions - Flavours, Fragrances and Feed Additives. A fourth, Innovation Division, was added a few years ago, with an exclusive dedication to the development of innovative skills and technologies essential to provide the industry with new products, says Mr Garcia. “We are engaged in expanding our flavour application laboratories, in order to further support our customers’ product developments.”

“While our global flavour sales grew by a modest 24 per cent, in Europe we have recorded an organic growth of 45 per cent during the last three years, which is memorable in the mature food and drink markets we serve.”

Lucta’s market position was strengthened considerably in 2015, when the company acquired Flavors & Fragrance Specialties, Inc. (FFS), a New Jersey based company, familiar to Lucta in culture, leadership and values, and complementary in product segments and technologies, mainly in flavours for coffee-based beverages and in fragrances for personal care. “In our first full year exercise after the acquisition, the impact in our operations represented 23 per cent of our total sales,” Mr Garcia points out.

“Today, we are amongst the top 15 largest companies in the consolidated flavour and fragrance arena. We are increasing powder flavour capacity in Colombia and building a complete new plant and creative centre in Mexico. However, it should be noted that we evaluate acquisition opportunities only if there is fit with our core or with adjacent areas.”

meeting new preferences

Lucta’s Flavours Division produces flavours for speciality beverages such as hot and cold brewed coffee or plant-based alternatives to dairy drinks; sweet flavours for dairy, bakery and confectionery, and savoury flavours for processed meat, snacks and fish derivatives.

The company is aware of the importance of staying ahead of trends. “We have conducted consumer research in 10 countries, with the most dynamic and demanding demographic segment - the Millennials. Described as the “Foodie Generation”, Millennials are adventurous and curious flavour consumers who like to take risks with their food. We have learned their taste preferences and we have for instance, identified the main drivers for flavoured coffee growth in dairy-based coffee drinks known as Espresso-based beverages (EBBs),” says Mr Garcia, adding that the company will be showcasing the craft flavours

Carlos Ibáñez, scientist, smelling volatiles at a sniffing port in the Innovation Division

for coffee-based beverages in the “World of Coffee” trade show held in Berlin in June 2019.

“We also see potential in processed meat products that include plant based proteins in their recipes, suiting increased consumer demand for flexitarian diets. As non-meat proteins confer off-flavours to processed meats, it is our goal to integrate these unexpected notes, achieving a tasty and balanced profile as a way to improve enjoyment throughout the eating experience.”

Mr Garcia explains that healthy eating continues to be the most relevant trend in today’s marketplace, pointing out that reducing sugar, salt, and fat may have negative consequences for food enjoyment. “Sugar, salt, and fat reduction can have similar side-effects in the form of diminished flavour perception, satiety and satisfaction. Aroma is the main contributing factor to flavour and enriching and designing more complex flavour profiles could be the best way to build a strong association between aroma and good nutritional feedback. We believe that this is the best recipe for a successful and healthy product.”

Focus on excellence

The Division’s customer base is rather diversified, with the top 20 clients representing around 40 per cent of the flavour sales. The core markets are Western Europe and the Americas, which currently account for 88 per cent of Lucta’s flavour sales. Substantial potential is seen also in Asia, followed by Eastern Europe, Africa and the Middle East.

“We have been developing capabilities in nutritional food and sports supplements, as well as in beverage specialties like craft beer and alcoholic sodas, to mention a few,” affirms Mr Garcia.

“We are committed to profitability with principles – placing fairness first in all business engagements. It is our mission to satisfy our customers’ needs in order to guarantee mutual success. We invest in adaptive teams, capable of responding in time, with creativity and assertiveness.”

“Our key competitive advantage is the in-depth understanding of products, customers, markets and the underlying dynamics of trends that will come to stay. We build on our pillars of specialisation as a guarantee of competitiveness; of innovation, as a guarantee of improvement; and of paramount service, as a guarantee of trust,” says Mr Garcia, noting that there is no expansion without close cooperation.

“As we have consolidated trust-based relationships with our partners, we are in a good position to capture new opportunities in our core markets with a view to reach a turnover of €500 million by 2026. This will possibly, but not necessarily, include an acquisition,” he concludes, summarising the company’s plans for the future. n