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Robertet Group and the Thucydides Trap in the Flavour and Fragrance Industry

This case study examines the Robertet Group, a French multinational specializing in natural flavors and fragrances, in the context of industry consolidation and competitive pressures framed by the “Thucydides Trap.” It analyzes the company’s differentiation strategy, geographic and product diversification, and competitive positioning using Porter’s Five Forces. The study also identifies key risks, including climate change and supply chain vulnerabilities, and offers strategic recommendations for sustainable growth, digital transformation, and brand modernization.

August 12, 2025

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Comprehensive Case Analysis: Robertet Group and the Thucydides Trap in the Flavour

and Fragrance Industry

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Comprehensive Case Analysis: Robertet Group and the Thucydides Trap in the Flavour

and Fragrance Industry

The Robertet Group is a French multinational company specializing in natural flavors and

fragrances (F&F). The company found itself in a precarious position within an industry

undergoing rapid consolidation. It was established in 1850 and is headquartered in Grasse,

France - the historic perfume capital of the world (Chereau & Meschi, 2024). Robertet Group has

built its reputation on premium natural ingredients. However, the company now faces existential

threats from what international relations scholar Graham Allison terms the "Thucydides Trap" -

the inevitable conflict that arises when a rising power (IFF) challenges an established hegemon

(Givaudan) (Silverstone, 2024). Therefore, this case analysis provides a comprehensive

examination of Robertet's strategic positioning. It will also employ Porter's Five Forces

framework to assess industry dynamics, evaluate key risk factors, and offer actionable

recommendations for sustainable growth in this volatile, competitive landscape.

Robertet's Core Strategy and Value Proposition

Differentiation through Natural Ingredients

Consumers' demands and preferences are significantly shifting in today’s world.

Customers are preferring purchasing natural and unprocessed ingredients due to an increase in

health issues caused by natural ingredients (Obahiagbon & Ogwu, 2024). Robertet has

strategically positioned itself as the "greenest" player in the F&F industry, with natural

ingredients comprising 80% of its flavour sales and 10% of fragrance sales - significantly higher

than industry averages. This differentiation strategy capitalizes on changes in consumer

preferences. Consumers are shifting their behaviors, thus demanding a clean label (Chereau &

Meschi, 2024). They are also demanding sustainable products across the food, cosmetics, and

home care segments. Therefore, the company has to expand its product lines to cover this

consumer’s demand. The company has also differentiated itself through premiumization.

Research shows that customers are willing to pay higher prices for authentic, natural

formulations. In 2023, ESG News reported that consumers are willing to pay a 12% premium for

sustainable products (Segal, 2023). Therefore, Robertet Group will be selling its sustainable and

greenest products to the market at a higher price.

Geographic and Product Diversification

Robertet's international expansion strategy demonstrates careful balancing of global reach

with local adaptation. The company has developed a strong production network with 30 fully-

owned manufacturing subsidiaries in terms of supply chain control and market proximity in 50

countries worldwide (Chereau & Meschi, 2024).. One of its strategic advantages is that it can

regionalize its products, and has more than 2,000 different kinds of flavor formulas that

specifically suit the local tastes or preferences, e.g., Asian markets want fruity-floral scent,

whereas Middle Eastern consumers want more musky scent. This localization goes further than

product formulation, to the production of regional R&D centers that are offering solutions to

local markets. The company also addresses the risk by diversifying its business units such that it

has three balanced revenue streams, namely raw materials (28%), fragrances (37%), and flavors

(35%) (Chereau & Meschi, 2024). The strategic combination has been proven resilient, thus

enabling the company to maintain a stable 1.8% global market share despite significant industry

consolidation. The strategy has yielded good financial results, and EBITDA margins have been

well above 19 percent, a level that beats most other industry players that were larger than the

company. This strategy has proved the effectiveness of mid-sized players and their competition

with the industry houses through a combination of international infrastructure, with a high level

of local market expertise, and the development of a diversified business mix.

Porter's Five Forces Industry Analysis

Competitive Rivalry (High Threat)

The F&F industry exhibits intense rivalry characterized by market concentration. The top

5 players controlled 70.8% of the market in 2021, up from 55.9% in 2018. The industry also has

aggressive mergers and acquisitions. A good example is IFF's $7.1B acquisition of Frutarom in

2018 and merger with DuPont's nutrition division in 2021 (Chereau & Meschi, 2024).

Companies in this industry also compete on prices. Large players leverage economies of scale to

pressure margins. This allows them to offer better prices than competitors.

Supplier Power (Moderate-High Threat)

The natural ingredients supply chain presents significant challenges, thus giving suppliers

higher power. The geographic concentration of natural ingredients increases the power of

suppliers. For instance, 70-80% of vanilla comes from cyclone-prone Madagascar. The ability of

suppliers to control prices increases the power of suppliers over the organizations operating in

this industry. For instance, Bourbon vanilla fluctuated from $200-$600/kg before government

price controls gave suppliers power over the company. Climate vulnerability, such as Cyclone

Enawo in 2017, destroyed 30% of Madagascar's vanilla crop, giving the suppliers more power.

Buyer Power (Moderate Threat)

The customer landscape presents mixed pressures, making the buyer's power moderate.

According to the case, no single client accounts for more than 10% of sales (Chereau & Meschi,

2024). Customers also have some power since they control what they want. They are increasing

the demand for customized and sustainable solutions. Buyers also have a significant impact on

the price of the products. Research shows that customers are very sensitive to the flavor and

fragrance products, making companies set prices at a favorable level (Herath, 2021). Robertet's

technical expertise in natural formulations creates switching costs that partially offset buyer

power. However, the rise of digital platforms could increase price transparency and bargaining

power over time.

Threat of Substitutes (Low-Moderate Threat)

Substitution risks emerge from synthetic alternatives. These alternatives are cheaper and

more stable, but are facing regulatory/consumer backlash. Growing demand for home fragrance

systems and natural extract sets allows some consumers to skip the traditional suppliers, while

some manufacturers are decreasing F&F content in their products altogether to save a penny.

Those threats are, however, tempered by the solid market trends of moving towards natural

ingredients- strictening of laws has bolstered Robertet since its focus segments are from its core

natural F&F segments. The company's specialization in sustainable, plant-based formulations

aligns perfectly with these industry tailwinds, making substitution less concerning for its

premium market niche.

Threat of New Entrants (Low Threat)

Barriers to entry remain substantial due to research and development requirements.

Formulation expertise takes decades to develop, thus creating a barrier for other small-scale

customers to enter this industry. Regulatory hurdles such as compliance with ISO, IFRA, and

regional safety standards also lower the threat of new forms from entering this industry.

Companies operating in this industry have also developed long-term relationships with their

customers, thus creating a loyal customer base. It is difficult for new companies to enter this

industry and take a share of existing companies' customers.

Risk Factors Impacting Consumer Spending Behaviors

There are a number of risks that affect Robertet that may alter the consumer spending

habits in the flavors and fragrances (F&F) industry. Economic inflation is a significant issue as it

increases expenses in raw materials (e.g., vanilla, rose oil) while transportation costs can increase

the prices of products (Chereau & Meschi, 2024). This can lead to reduced demand for the

products in price-sensitive markets. Climate change also escalates supply instability. This was

witnessed when Cyclone Enawo smashed Madagascar vanilla crops in 2017, destabilizing the

global supply chain and increasing price volatility.

Strategic Priorities for New Entrants in the Fragrance Market

Cost effectiveness and differentiation are crucial aspects of a new entrant in the already

saturated F&F market. The specification of niche, like using organic or vegan materials, could

appeal to an eco-sensitive group of the population that is willing to pay a high price. It would

also need to take advantage of low-cost areas in provinces (e.g., Uganda in the case of vanilla) to

ensure competitive rates (Chereau & Meschi, 2024). Besides, digital innovation argues that using

AI to create custom scents or do direct-to-consumer e-commerce may allow them to

deemphasize traditional distribution channels. Collaborations with influencers or indie product

lines (e.g., Byredo) may also speed market entrance. Finally, it is essential to strike a balance

between cost control and unique value propositions as the key to profitability in such a

competitive industry as the perfume industry, full of giants like Givaudan or IFF.

Examining Struggles with Hegemony

Given the intense competition between Givaudan (the incumbent) and IFF (the rising

challenger), Robertet faces pressure to align with a larger player (Chereau & Meschi, 2024).

Strategic piggybacking, such as forming alliances for distribution or R&D, could provide access

to resources and faster market expansion. However, full acquisition risks erode Robertet's

independence and brand identity, as seen when Givaudan absorbed Expressions Parfumées.

Why Should Robertet Develop a New Business Model to Navigate Future Challenges?

The F&F industry is undergoing a high-speed digital disruption, climate risks, and

consolidation. The traditional model used by Robertet, which depends on B2B sales and physical

supply chains, might be obsolete. Therefore, the company should consider developing a new

business model to navigate future challenges. New B2B and B2C revenues may be opened by a

shift toward a digital-first strategy, including an e-commerce site (e.g., e-Robertet).

Should Robertet Consider Rebranding to Bridge the Gap Between Evolving Trends and

Local Relevance?

Rebranding could help Robertet modernize its image while retaining its heritage. The

company should emphasize sustainability to align with global trends (Chereau & Meschi, 2024).

It can also include localized branding (e.g., wellness-focused fragrances in Asia) to strengthen

regional appeal. However, its 1850 legacy is a key asset—any rebrand should balance tradition

with contemporary messaging.

Final Recommendations for Robertet

The company should diversify its supply chain to address the supply chain challenges. It

should source from climate-resilient regions (e.g., Uganda, Papua New Guinea) to mitigate risks.

It should also invest in digital transformation. Robertet should launch AI-driven R&D and e-

commerce platforms. It should form a strategic alliance. Robertet can partner with startups or

luxury brands for innovation without mergers. It should also lead to sustainability in this industry

to differentiate itself from competitors. The organization can achieve net-zero emissions and

promote certifications to attract ESG-conscious clients.

References

Chereau, P., & Meschi, P.X. (2024). Robertet: The Thucydides Trap in the Flavour and Fragrance

Industry. Harvard Business School. https://hbsp.harvard.edu/product/W39485-PDF-

ENG?Ntt=

Herath, I. (2021). Different Marketing Strategies for Company Positioning in Different

Industries. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3959319

Obahiagbon, E. G., & Ogwu, M. C. (2024). Consumer Perception and Demand for Sustainable

Herbal Medicine Products and Market. Reference Series in Phytochemistry, 1919–1952.

https://doi.org/10.1007/978-3-031-43199-9_65

Segal, M. (2023, November 14). Consumers Willing to Pay 12% Premium for Sustainable

Products. ESG Today. https://www.esgtoday.com/consumers-willing-to-pay-12-premium-

for-sustainable-products-bain-survey/

Silverstone, S. A. (2024). What is the Thucydides Trap? Power, Threat, and the Great War that

Ripped through Classical Greece. Routledge EBooks, 184–199. https://doi.org/

10.4324/9781003396420-14

August 12, 2025

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Academic level:

Ph.D.

Type of paper:

Case study

Discipline:

Business and management

Citation:

APA

Pages:

5 (1250 words)

Spacing:

Double