The ratings on New York City-based International Flavors&Fragrances Inc. (IFF) reflect the company's important and defendable position as an ingredient supplier to consumer products companies worldwide. Geographic diversity is a key rating consideration because 71% of revenues and more than 80% of the company's operating profits are generated outside North America, somewhat insulating the firm from regional economic weakness. Although competition is intense for the development of new flavors and fragrances and the application of these technologies, the company has achieved a leadership position within the industry through its R&D investment of about 8%-9% of revenue. R&D expertise is a significant barrier to entry within the flavors and fragrances industry because products are largely custom-made for customers and
