Erik Fyrwald, IFF CEO Talks Q2 2024 Strategy on Mad Money | CNBC

Thanks Jim, great to be here.

Sure. First of all, IFF stands for International Flavors and Fragrances as you know. Historically, a 135 year old company grew up in flavors and fragrances. And then six years ago, as you know, started on an acquisition spree. And over the last six years there's been a lot of acquisitions and divestitures, a lot of corporate programs to try to get synergies, a lot of consultants and advisors, and just a lot of confusion and complexity. It was very hard to understand what the company was doing. Yeah, so since January we've really tried to simplify things, get back to basics, and really focus on winning with customers. Five business units, clear authority, end to end authority in each of the business units, and basic focus on customers, bring world leading innovation, drive productivity, and take care of our people.

The best client list in the world, and we still have a great client list. So for the last 7 months I've traveled all around the world and I've met with more than a third of our customer revenue base. A lot of top to top meetings talking about what we've been doing with them and then what the opportunities are going forward. And I tell you, we still have, we're still on the core lists, we're still with them, we still got great people, and we're just unleashing our people to work even closer with the customers to bring better innovation.

Oh yeah, so spicy, that's you, potato chips or any kind of chips. But also we bring better health. We help companies reduce salt dramatically. So in chips for example, you can reduce salt by 25 30% and still have the same taste with our flavors, and have the great new taste that the consumers love that grow the business.

We get naturals for both our scent business and our flavors business because that's another great trend. Consumers want naturals and they want them to have great scents and great flavors.

Yes, and we have great perfumers. In fact, I'll tell you a quick story. So one of the top beauty companies in the world, the CEO when I first got there asked me to come over to France and have lunch with them. And we sat down for lunch, there was just three of us: our person that runs our fine fragrance business, the CEO, and I. And he said, 'I'll give you one piece of advice: keep your leading perfumers, your master perfumers. They're golden. They're what makes our company great.' I said we're going to do that. Well explain that to people because it's kind of like brew meisters. These are people all their lives, they have an amazing nose. They know more about the smell and taste. They also, I think, know what kind of taste that you were growing up with so that they can reminisce those, and they also know what smell Lord Elizabeth Taylor had because she was a great spokesperson for things that you did. Yeah, there's nothing more important than our perfumers and our flavorists. So our perfumers get a brief, and our flavorists also get a brief from the fragrance company that says they want to perfume a new scent to have a certain evoke a certain emotion, whether it's joy or energy or relax. And the perfumers know how to put together the molecules to achieve that. And it's really amazing. And now with AI tools it's even more powerful what they can do. And I'll just give you an example. So our perfumers were asked by Charlotte Tilbury to help her develop a new line of fragrances: one that was bringing joy, one that was bringing energy, one that's bringing romance, one that's bringing relaxation. And we did it with something called the IFF Scent Cube, which has more than 5 billion data points. So we could help her develop these different scents that evoke these different emotions. And they've been extremely powerful, and she's out on TikTok talking about how she's worked with IFF to make that happen.

Well that was my first day as an IFF CEO. How tough is that because IFF had a pristine pre reputation from the dividend. Yeah, but we were borrowing money to pay the dividends. That's never good. And we were cutting R&D spend, we were cutting capex that we needed to invest in our growth businesses. You know, we've got three world class businesses: in flavors, and our scent business, and our health and biosciences. And we weren't investing enough in them. So we cut the dividend, we explained to investors that we're going to take that cash and invest it in growing our businesses, bringing more innovation.