18 Jun 2018 --- Italian company Faravelli has grown from a small trading company to a global supplier of food and pharmaceutical ingredients, as well as supplying cosmetic and biochemical industries with ingredients. According to the company, 35 percent of its business is for the food and supplement industry, where Faravelli believes that there is a vast amount of innovation and activity.
FoodIngredientsFirst caught up with Luca Benati, Faravelli CEO, who discussed the business changes, trends and future opportunities. “In my 22 years that I have been in this fast-moving industry, in the past, pharmaceutical has been the backbone of the company, but the industry is quite stacked and has a much longer approval process. Within food, we have a strong presence in thickeners, preservatives, sugars, sweeteners and amino acids.”
Benati also comments on trends that are creating opportunities for the company: “E-commerce and the internet platform is driving the market and we are starting to find our way to run our business on these platforms,” he says.
“From a product point of view, trends that we see often see demands for are gluten-free, lactose-free, and recently we have seen changes in palm oil, which is different for various market segments. Then for sweeteners, which is a vast market, stevia is a huge trend these days,” he continues. “Many companies are using stevia as a common ingredient, we do see monk fruit as an emerging ingredient in Europe and it is already present in the US.”
“In Italy, there is a different need for stevia, in the US they are more settled with stevia and in Italy, it is still early days. There was a big expectation, but there was no real explosion, now are starting to see more interest in plant-based sweeteners,” he claims. “The beverage industry has worked on getting a better aftertaste for stevia, as that was one of the main problems it had to begin with.”
On the innovation and R&D side, Faravelli has been looking at chia seeds, as an alternative source of omega 3. “We source chia from Chile and our supplier is also close to getting novel food approval, for the fibers and proteins from chia. I think this could be a success in the food market,” Benati notes. “There are lots of application areas that we are specifically looking at for food fortification, so that is one thing we are working on.”
“There has been a lot of previous success with chia, and we are hoping to expand on this in the future,” he adds.
The preservation of food is driving innovation for many companies, including Faravelli, according to Benati. “There is a bigger need for cleaner labels and natural food preservatives. This is another topic of interest which is also related to R&D activity. At Faravelli, we have an application lab which is continually working with R&D and recently we have created more opportunities for stricter cooperation between our R&D and our sales side of the business, so there are many more opportunities from that respect.”
In 2014, Faravelli opened up in the US, and Benati says this is because the US has a healthy market, that, at the time, presented social and economic opportunities. “When we expand in other countries, we were always choosing economies that are stable. Emerging markets are mostly places that we go and buy products rather than sell,” he says.
“In Germany, business is growing dramatically and its stable, as well as in the US. Big countries create lots opportunities for us, these are big markets, with significant opportunities,” he adds.
There are also trends to be set in China and Benati says that the company has an excellent connection there when it comes to sourcing of ingredients.
Looking towards the future, Faravelli remains positive. “Consolidations of our US operations are in motion,” Benati notes, “Which will be a working progress for many years. We started there to create something for the future and we plan to see that be a success.”
There is also the continuous maintenance of investments in other countries. “For now, Italy is doing very well, we are pleased about the Italian operations, but also what is going on in Germany, where we are have grown quite dramatically, too.”
“In eastern Europe, we also hope to grow – Spain will be quite substantial, they give us strong support, which can be defined quite easily, right now we are buying from China, so it’s imperative they are not just selling but supporting our business,” he claims.
“In the future, it would be something to see more acquisitions, they are essential to us, not just mergers but also partnerships with distribution companies like ourselves, always without clashing with our existing customers.”
Overall, Benati believes that it is an excellent time to be in this industry: “It’s hectic and fast-paced, and we are dealing with many products, but it’s all very positive.”
“We are working in a universe which is a continuously changing, which of course presents many questions marks. Not only because of the nature of our business but because of all these events which affect the world, if there is a bad crop or a hurricane, for example, they all affect our industry and can create turmoil in our business. Fortunately, we are very versatile, and we don’t just produce one ingredient or product, so at the end, we can play on this battlefield adapting ourselves and our business quite quickly,” he concludes.
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