Lesaffre acquires yeast extract business from DSM-Firmenich

The Dutch manufacturer originally announced this strategic divestment on June 12, 2024, as part of its broader effort to realign its portfolio toward high-growth areas.

The transaction allows 46 employees from dsm-firmenich’s yeast extract division to join Lesaffre, a major player in fermentation and microorganisms.

Although the companies have not disclosed financial details, the completion marks a significant step in dsm-firmenich’s ongoing strategic shift.

The yeast extract business was part of dsm-firmenich’s taste, texture & health unit, contributing approximately €120 million in annual sales.

As part of the deal, dsm-firmenich and Lesaffre plan to collaborate through a technology partnership to further innovate in yeast extract development, ensuring benefits for both companies and their customers.

A strategic partnership

In addition to the sale, the companies agreed to a supply arrangement, where dsm-firmenich will provide yeast extracts from its Delft facility in the Netherlands to Lesaffre through the end of 2025.

After this period, dsm-firmenich will discontinue yeast extract production in Delft, and Lesaffre will assume full responsibility for ensuring supply continuity to existing customers.

Lesaffre’s acquisition of dsm-firmenich’s yeast extract business strengthens its already dominant position in the fermentation market.

Yeast extracts are critical in various applications within the food and flavor industries by offering natural taste enhancers and meeting the growing demand for clean-label ingredients.

dsm-firmenich’s shift

This transaction is part of dsm-firmenich’s broader plan to sharpen its focus on high-growth and high-margin segments within the nutrition, health and beauty sectors.

The company is actively reviewing its portfolio and divesting from areas it no longer views as priorities. Its marine lipids business sector was recently acquired by KD Pharma.

dsm-firmenich has decided to move away from yeast extracts and other businesses in favor of areas that better align with evolving consumer demands and global macroeconomic trends.

Dimitri de Vreeze, CEO of dsm-firmenich, noted earlier this year that the company’s path forward is focused on leveraging synergies in key areas such as biotechnology, microbiome science and receptor biology, following “a challenging 2023.”

He explained that the company swiftly responded to challenging economic conditions and historically low vitamin prices by speeding up integration efforts, transforming the vitamins business, and reviewing its overall portfolio.

Lesaffre’s growing influence

For Lesaffre, the acquisition represents another step in its expansion within the global fermentation space.

The company also recently announced the acquisition of a 70% majority stake in Biorigin, a business unit of Zilor, the multinational company producing yeast derivative products.

The partnership aims to leverage both companies’ capabilities to offer enhanced yeast derivatives and solutions for the food and animal nutrition markets globally. The deal, pending regulatory approvals, is expected to close soon.

Due to its nutrient-dense profile and bioavailability, yeast extract is often included in supplements to boost energy, improve immune health, and ensure the body receives essential nutrients.