The acquisition was announced last week, and is designed to position the company as one of the world's largest flavour companies. But more than that, Kaden's portfolio of active plant extracts will allow it to create flavours and fragrances that have a functional or health element, too.
"This acquisition gives us a good position on the highly attractive market for functional food and nutraceuticals," said Dr Gerold Linzbach, CEO at Symrise.
"As a result, we can now offer a much broader spectrum, and we can present ourselves even more strongly as a source of comprehensive sensory solutions for nearly every challenge on the market."
Symrise's Katja Derow told NutraIngredients.com that consumers increasingly expect more from a product. They want it to taste or smell nice, but also to be good for their health.
"We think that, one day, there will be no products on the market that does not offer added value," she said.
She explained that the company plans to use the plant extracts in Kaden's portfolio to tailor-make new products which combine sensory and functional attributes.
Headquartered in Hamburg, Germany, Kaden Biochemicals is regarded as a major specialist in the development and production of high purity active ingredients from plant material. It is an owner-operated company in which Heinrich Kaden holds 90 per cent of the stock.
In their search for new ownership, the management at Kaden decided in favour of Symrise, which now owns Kaden Biochemicals completely.
"Symrise was always my partner of choice when we were looking for a successor for my business," said Kaden. " I am confident that these two companies suit each other perfectly in terms of their product portfolio."
The move follows Symrise' recent £1.5 million investment at its Nördlingen production site. The production facility, which specialises in the development and manufacture of flavourings and raw materials, is being expanded in order to meet growing demand - and growing competition - within this specific flavour sector.
Symrise believes that the establishment of the new pilot plant will create perfect conditions for developing and manufacturing innovative beverage flavourings to the standards demanded by the industry. The expansion projects are scheduled for completion in December 2006.
These developments come at a time when the flavour industry as a whole is looking at new ways of increasing margins in what is becoming an increasingly competitive sector. The market for flavours has, historically, been dominated by suppliers from the US, Japan and Western Europe - in particular, France, the UK, Germany and Switzerland.
However these traditional flavour production areas could begin to lose market share to developing areas of the world as the product range and demand expands.
The appeal of functional foods for a company looking to steal a market over its competitors is clear: Functional foods are believed to be the fastest growing sector of the food industry; the market was worth €4 billion ($4.7) in Western Europe and $19 billion (€16.2) in the US in 2004, according to Datamonitor.