Raisio reports above target growth in ingredient sales
products through new applications, particularly the 'little bottle'
milk drinks, and gains in new markets, writes Dominique
Patton.
However it warned that a 66 per cent rise in sales of its Benecol sterol esters was unlikely to be repeated in the coming year, and that it will continue to focus on its main business, margarine and milling, to improve long-term growth.
Nevertheless ingredient sales for 2004, generating €44.7 million, far exceeded the firm's targeted growth and demonstrated growing recognition of the Benecol brand.
Sales were driven primarily through 14 new product introductions as well as new markets in Central and Southern Europe, as well as Chile and Iceland during the last quarter.
"We feel that the Benecol brand is quite nicely known now, helping us come out with new applications," said Taru Narvanmaa, executive vice president of communications and investor relations at Raisio.
In 2002, Raisio changed its distribution agreements to take greater control of its ingredient sales through the Nutrition unit's marketing network.
"Emmi has been a very good partner in central Europe and Raisio Nutrition's increasing market share in Poland allowed us to expand there too," added Narvanmaa.
Russia, where the Nutrition unit has recently gained presence with a new margarine plant, could also offer good potential, she told NutraIngredients.com, as well as the Asian markets, such as India.
"We still see the biggest growth potential in Europe, as Europeans are the most aware functional food users. But the growing lifestyle deterioration in Asia also creates demand."
She noted that the firm did not forsee similar growth over the coming year but had significantly increased its share against tough competition. It has also begun an expansion of its production capacity.
"If you compare our 66 per cent growth to the some 30 per cent growth in cholesterol lower end product sales, it suggests that we have been able to grow our market share in Europe," said Narvanmaa.
The company has benefited from sales of 'little bottle' cholesterol-lowering drinks, also now offered by Danone, that give it an edge over large rival Unilever, which remains focused on margarine.
The company is looking at bolt-on acquisitions to the unit to increase its market potential, using cash generated from its chemicals unit. It may also be able to offer new ingredients, although recent investment in R&D will focus initially on products for the Nutrition business, which generates ten times the turnover of the ingredients unit.
