The Backstory — How Exactly Did Sensapure Get So Good At This

Sensapure Flavors was born in a contract manufacturing facility that helped national brands and start-ups innovate and optimize their product lines. Today, as a stand-alone flavor house — we help brands and manufactures with their product development and flavor system needs. We know that while product innovation requires a broad palette of flavors and active ingredients; when left un-checked, the normal growth of any R&D department will result in a manufacturer having hundreds of SKUs of flavors, from a dozen different suppliers, creating costly expiration and obsolescence waste. The challenge? How to consolidate the number of manufacturing ingredients, without limiting product innovation. Solution: Sensapure’s Flavor Optimization.

Sensapure Flavor Optimization — A Sample Case Study:

5 Step Project Implementation Process

1. IDENTIFY — Sensapure worked with the manufacturing team to identify and prioritize flavors for project:

Reports were run showing annual flavor spend by flavor and identify highest and lowest cost flavors
Flavors were sorted from highest to lowest spend / assign each flavor a number from 1 to 5 where 1 is best value, 5 is most expensive for the flavor category (natural, organic, N&A, etc.)

2. SELECT — Flavors/products were selected for consolidation:

Once the highest cost (volume and price) flavors were identified, we reviewed with the team the top 20-30 candidates for consolidation savings
We worked with the R&D team to filter out those flavors where the potential cost savings wasn’t worth the effort
Sorted the list of remaining products where they were most likely to consolidate flavors and realize cost savings
We determined the top 5-10 products from the list above and began the flavor consolidation project

3. PREPARE — Once identified, the manufacturing team prepared & sent samples of each targeted flavor and corresponding products to Sensapure:

Flavors were pulled, weighed out, and labeled — 100g of each individual flavor key of product from the list above
Finished good product specs were gathered for each of the flavors above
Manufacturing team prepared 30 servings of the finished product with instructions to prep sample (< > grams of product diluted with < > oz of water)
Manufacturing team built out 200 servings of base for the product
They packaged and labeled flavors, sweeteners, acidulates & gums individually, separate from the base to avoid ingredient interactions, and shipped them to Sensapure.

4. MATCH / CONSOLIDATE — Product Development / Custom Flavor Creation Engagement:

Once their samples were received, the Sensapure Team of flavor chemists and applications experts provided initial feedback in under three business days (flavor keys and finished good samples)
An ‘in-person / on site’ two-day R&D iterative session was held at the Sensapure facility in SLC, UT— to complete flavor consolidation R&D work.
Matched flavor key & finished goods iterations were tested organoleptically until they scored an 80% or greater match for project approval
Newly approved flavors were then costed out and met the approved budget targets.

5. RESULTS — The manufacturer enjoyed the cost savings, simplified inventory control, and reduced manufacturing complexity as they ordered their customized flavors from Sensapure going forward

Project Cost Savings Summary

Savings before contract manufacturer labor cost: Approx $293,000
Internal labor cost for contract manufacturer to support project: Approx $60,000
Savings after internal labor costs: $233,000
Increased EBITDA $233,000

Sample Project Results

Before/After #s

VANILLA FLAVORS

Orig 27 flavors
Consolidated to 15 flavors
Spend on 27 flavors year prior to consolidation – Approx $1,000,000
Reduced flavor COGS on orig 27 flavors by $150,000 in 12 months following consolidation
Reduced obsolescence costs by $25,000 in 12 months following consolidation
Annual vanilla flavor savings: $175,000
17.5% reduction in annual vanilla flavor COGS

CHOCOLATE FLAVORS

Orig 23 flavors
Consolidated to 16 flavors
Spend on 27 flavors year prior to consolidation – Approx $800,000
Reduced flavor COGS on orig 27 flavors by $110,000 in 12 months following consolidation
Reduced obsolescence costs by $18,000 in 12 months following consolidation
Annual chocolate flavor savings: $ 118,000
14.75% reduction in annual chocolate flavor COGS

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Frequently Asked Questions

How long does the process take?

The length of time depends mostly on how quickly the manufacturer can supply the needed samples. Once the samples are received, it is normally two to three months until project completion.

Will this process enable me to reduce the number of flavor keys in product with multiple flavor keys?

Yes.

What are Sensapure's requirements to engage in a project?

Customer commitment to support the 5 step process, and a contractual commitment to transition agreed upon future flavor purchases to Sensapure, once flavor is matched within defined budget.

How can a contract manufacturer (CM) run a successful flavor consolidation project? / Will brand customers support the initiative?

1. If the CM manages product development and flavoring on behalf of brand customer – CM can be successful in flavor consolidation. Important to focus on products/flavors where the CM manages the flavors and has discretion on updating flavor systems to manage risk and cost.

2. If the brand customer directs formulation – and the CM purchases flavors that are specified by brand customer – Unlikely for CMs to be empowered to make flavor changes. These flavor consolidation projects are rarely supported by brand customers. The brand customers often manage these projects directly with their flavor house partners.

Can Sensapure match any flavor?

Probably. While there may be some flavors that will be more difficult than others, at the organoleptic level (taste / smell / mouthfeel) and particularly in a finished good product—Sensapure has a very high match success rate.

What if Sensapure can't achieve the cost savings goal?

The customer has no obligation to switch out flavors that do not meet organoleptic and cost savings targets.

Welcome To Sensapure's Flavor Optimization