Most of us wouldn’t think of the sweets and snacks next to the supermarket tills as marvels of modern science. But far more effort goes into engineering the taste of packaged foods than consumers realise. Some of this work isn’t done by manufacturers themselves, but by the enigmatic-sounding “flavour houses” brought in to design the perfect concoction.
- Fast growth in new markets
- Valuation below 10-year average
- Excellent cost control
- Recovery timings uncertain
- Management changes
- Slow growth in heritage categories
Flavour and fragrance provider Treatt (TET) makes about 60 per cent of its revenue from flavour houses, with the remainder coming from direct deals with brands. The group’s expertise is in the fractional distillation of essential oils, and most of its products ultimately wind up in beverages such as flavoured waters and canned cocktails. With its shares up by more than 150 per cent over the past 10 years, long-term investors may well feel that Treatt occupies an appetising niche in the chemicals market.