Sensient says advanced technology enabled it to evolve along with the needs of its customers.

Few companies in the world have reached the level of success that has made Sensient Technologies a global leader in sophisticated color, flavor and fragrance systems. Chairman and CEO Kenneth P. Manning attributes this success to acquisitions which transformed the company and to the resulting decentralization through its profit center concept. His general managers enjoy an unusual degree of autonomy in their business units and geographic regions.   

While Sensient’s corporate office reviews the strategic plan and has in place a worldwide reporting system, its business units are highly decentralized. “In order to stay close to our customers, the profit centers have a great deal of autonomy,” Manning says.    

As a result, the company devotes a significant amount of time and effort to choosing and developing its general managers. “Every prospective general manager goes through an extensive interview process, and I meet each candidate personally,” Manning says. “We want to be sure we choose a candidate who can be successful within our organization. In many cases, the manager will be someone promoted within the company.   

“We require exceptional managers to operate our profit centers with a large degree of independence,” he adds. “That’s the only way to manage a company that is as geographically diverse as ours.”

Sensient’s Evolution
Founded in 1882 as gin-maker Meadow Springs Distillery, the company benefited from a booming economy and built itself into a highly diversified organization. When Manning became CEO in 1996, Sensient jettisoned most of its low-profit business units in favor of building up its color and flavor profit centers.    

It was a decision that served the company well, he says. Today, Sensient produces approximately 25,000 flavors and nearly 3,000 colors for a diverse range of clientele in the food, beverage and household and personal care segments. With more than $1.3 billion in annual revenues, it now is the largest food and beverage color company in the world and holds a leading position in flavor, as well.   

As the color, flavor and fragrance business grew and evolved in the past 10 years, so did Sensient. “By developing our technology, we were able to move with those changes when they occurred and were able to grow within each segment of the market,” Manning says. “We have strong technology and are able to quickly develop and deliver the products our customers want.”    

For instance, Sensient has made considerable strides in developing emulsion-based products that are highly versatile. “We’re leaders in emulsion technology, which can be used to produce either flavors or colors,” Manning states. “Our formulations offer superior performance and greater shelf life.”

Sensient’s Transformation
According to Manning, Sensient was formed by 21 strategic acquisitions – most of which possessed unique technology – that have enabled the company to expand its product offering on a local basis by transferring these innovations from one profit center to the next. By creating semi-autonomous business units that serve specific markets – rather than centralizing all operations in one location – the company maximizes the advantage of a global presence.   

Sensient’s main office for the Flavors & Fragrances Group, for instance, is based in Indianapolis, but has profit centers in Germany, Italy, France, Spain, Mexico, Japan, Korea and China. Managers in the overseas offices have authority over operations in their specific geographies. Each has the power to develop specific technologies and products based on local customer needs.   

One example includes a new natural color line for food and beverage clients that was based on shades trademarked as Fusion Precise Natural Colors. “We now can make this product extremely stable; we have an ability to bring the right shade consistently to customers over and over again,” Manning says. “This is a significant advancement in the realm of natural colors.”    

He anticipates the natural color trend to continue in the years ahead. “The percent of natural colors that we sell is steadily growing, and I expect that to continue,” he predicts.

“Not only are we encouraging our customers to use natural colors, more and more people want natural products, so this is working to our advantage.”

The Future is Bright
Sensient’s focus on autonomous profit centers will continue to prove advantageous as it delves into new and emerging markets. Manning says the company intends to expand its distribution network so that it can serve more customers locally and encourage them to embrace the natural products movement, as it continues to develop new technologies.  

“We are looking primarily at Eastern Europe, but we also are expanding quite dramatically in China,” Manning says, adding that all of its business units in China were grassroots. “We didn’t acquire any companies in China; we built the business up from scratch.   

“The future is going to be very exciting,” he continues. “We will see a continuation of products that are focused on health. I think the natural trend is here to stay. Our growth prospects remain very strong, and we’re going to continue to expand geographically.”