Robertet: Seed To Success 2030
Robertet capital market day update
Robertet is the oldest company in my portfolio, not by holding period, but by legacy. The company has persisted and grown for over 170 years and continues to innovate in the natural Flavor and Fragrances (F&F) space. It is led by the 5th generation of the Maubert family, but recently hired the first outside CEO in its company history. On the 22nd of May, they held their Capital Markets Day. Let’s look into it and how it impacts my investment case in this company with a rich history. You can find the CMD slides here.
Who’s Robertet?
Robertet offers raw materials, flavors and fragrances, exclusively from natural ingredients, to its customers in a fully vertically integrated supply chain. By doing most things in house or with long-term partnerships, the company can ensure quality and offer full traceability of its products. As customers become more eco-conscious, the demand for this kind of transparency increases, giving Robertet a competitive advantage, especially in higher priced/luxury market segments.
Below, you can see a non-exhaustive map of Robertet’s production plants and partnerships to source its ingredients across the globe. Many products, like Bulgarian roses, can only be sourced from specific locations, making a large network necessary and a huge barrier to entry.
Innovation is a key part of Robertet’s strategy, as the leader in naturals. The company actively improves its own operations, explores new unique ingredients in order to enhance R&D and product creation. One overlooked scale benefit is cross using different flavors and fragrances to create new products and scents. The then patented solutions can’t be replicated and typically only account for a small part (0.5-5% of customer COGS) of costs, while having a high importance to its customers. You won’t change the scent of your perfume to get COGS down by 0.5%, especially because it would mean redesigning the process from scratch with another supplier and having the risk that the product will get worse. Robertet thus enjoys high customer switching costs and long customer relationships.
The next leg of growth
Robertet has expanded its global presence organically and inorganically over the last years and wants to continue on this path. The business benefits from a growing middle class (expected to double through 2034 to 687 million globally) favoring local products and eco-friendly/natural solutions. Health-consciousness is also increasing, which drives demand for sugar alternatives to give products flavors, with 20 countries having implemented a sugar tax in the last 10 years.
Emerging markets are a key opportunity for Robertet, as they will rapidly expand on these trends. India, China, Indonesia, Brazil, Mexico, UAE, Vietnam, Saudi Arabia, Thailand and Philippines are the key focus markets and are estimated to account for 55% of the forecasted F&F market growth in the coming years. Driven by its legacy, agility and natural DNA, Robertet aims to capture these markets.
What does it mean for my investment case?
In the premium section I’ll talk about the impacts of the CMD for my investment case into Robertet with new numbers and targets presented. You can read my deep dive into Robertet here.
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