Resilience Series Part 5: Robertet
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For part five of our resilience series, let’s dive into the natural ingredients company, Robertet.
So far in this series, we’ve covered:
French barrel-maker, TFF Group
Biscoff famous, Lotus Bakeries
Faroe Island fisheries, Bakkafrost
Swiss polymer maker, Ems-Chemie
Background
Robertet is the oldest company we’ve looked at so far. It started all the way back in 1850, when Francois Chauve recruited his nephew, Jean-Baptiste Maubert, to start a perfume business. Then, in 1923, Jean-Baptiste’s son, Maurice, took over management of the company. In 1961, the third generation assumed leadership, as Paul and Jean Maubert explored food flavoring beyond perfume scents. The fourth generation grabbed the torch in 1993 as Phillippe Maubert built a new factory for food flavors in the US. Currently, Phillippe is the acting Chairman and his brothers/nephew act as the directors of the three main segments of the business:
Christophe Maubert, Director Fragrance Division
Julien Maubert (nephew), Director Raw Materials Division
Olivier Maubert, Director Flavor Division
The Maubert family still owns 37% of the overall business. Once again, a long-time family business!
Robertet has diversified its revenue streams. Now the sales breakdown is like this:
Fragrance: 36%
Flavors: 35%
Raw materials: 27%
Active Ingredients: 2%
All in all, Robertet’s business is about taking natural ingredients and extracting the scent or flavor from them to put into products, mainly perfumes and foods.
The company, yet again as we’ve seen in this series, has a focus on vertical integration. In its “Seed to Scent” sourcing program, the company traces each raw material through the supply chain. This is a huge customer value proposition as companies want to be more sustainable and make sure their products aren’t being produced with child labor in poor working conditions. Since Robertet has ownership of the value chain, it can provide true traceability, something that a lot of competitors can’t verify.
In its fragrances segment, Robertet also has a “Seed to Feel” methodology that is quite interesting. The company does large scale studies with people to get their physiological responses to different scents. They have even gone so far as to use VR headsets to get a better sense of these responses. Basically, what you need to know is that the company goes to great lengths to please their customers.
To be clear, Robertet is a supplier of natural materials and the formulation of those materials. It’s really a B2B company that services perfume, beauty, beverage, and food brands. If you want to create a new perfume, you can utilize Robertet’s services of raw material procurement and then their team would help you understand what scents go together to get exactly what you want. It’s a full service operation, from seed to scent! Robertet doesn’t always work directly with brands though. Many times, brands will license out their namesake and allow a company like Interparfums or IFF (International Flavors and Fragrances) to manage all the pieces of actually creating a scent and distributing it. It really depends on the preference of the brand. Some brands prefer to keep more control over the whole process and hiring Robertet directly is a perfect way to do that.
Moat
The main way that Robertet is differentiated from other large competitors like Givaudan is in its focus on natural ingredients. The company searches the globe to find and finance farms of all different types – roses in Turkey, sandalwood from New Caledonia, Cumin in Egypt, Maté in Brazil, jasmine from India, oranges in Tunisia, Myrrh in Somalia, Argentinian grapefruit, vanilla from Madagascar, or Italian lemons. And no, there’s no way I could’ve made all that up; each one of those is a real farm that has supplied natural ingredients to Robertet. And oftentimes, Robertet pre-finances the costs before the first harvest to get the farm going. It would be incredibly difficult to run all of these farms across the globe so Robertet prefers to provide the capital and let the labor remain local to the area. It is also likely more sustainable for the local economies this way.
The company’s competitive advantage stems from its relationships with natural ingredient providers all over the globe. Orchestrating this network at scale is very difficult to do. Once Robertet sources ingredients from around the world, it extracts the oils from the plant material, which is the basis for its services; everything revolves around the extracted natural ingredient. In the company’s annual report, there is a fantastic graphic of the business model:
In the graphic, you may have noticed the company mentions how competitors buy Robertet’s natural ingredients to make synthetic ingredients. As a testament to how much the company focuses on natural ingredients, the word “natural” is used 137 times in the annual report and the word “synthetic” is used only once outside of the above illustration. And customers really value this. Givaudan and Firmenich, two of the biggest flavor and fragrance companies in the world, actually own stakes in Robertet (5% for former and 22% for the latter) because they want to be aligned with an important supplier.
We’ve talked a bit about the fragrance division and we just discussed how Robertet sells some of its natural ingredients to competitors, but what about the flavors division? Well, it’s the same thing as the perfume business but servicing mainly food and beverage companies. As an example, the company helped create some vegan cheeses using plant extracts. It has also supplied agave nectar to sugarless snack brands. These are just two small examples of an ingredient that a food or drink company would need to create a new product.
As mentioned at the beginning, the revenue segments look like this:
Fragrance: 36%
Flavors: 35%
Raw materials: 27%
Active Ingredients: 2%
Active ingredients is a small, but growing business line primarily focused on cosmetics. One example of this is where the company reuses Yerba Maté leaves from its fragrance business to create an antioxidant skin cream.
Wrapping Up
If you need a plant extract in your product, Robertet is the company to call. They have a vast supply chain of hundreds of family farms, many of which Robertet has provided the seed funding for (pun definitely intended, I’m quite proud of this one!)
The company is nearly 200 years old and it’s on the fourth generation of ownership. Similar to the TFF Group, Robertet has a very sticky relationship with customers because different plants grown in different regions may smell slightly different. Customers that care immensely about their brand typically don’t take the risk to switch suppliers. Once again, resilience is found in family ownership, vertical integration, and remaining deeply relevant to your customers.
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