Supplement weakness dampens Cognis nutrition sales

By Guy Montague-Jones

- Last updated on GMT

Related tags: Nutrition

Cognis has reported a 6.8 per cent decline in nutritional and health product revenue for the first 9 months of 2009 as the European market weakens and supplement sales slump.

Despite the significant fall off, “nutrition and health”​ was actually the best performing division for Cognis. Overall sales in the first three quarters of the year were down 15 per cent on the same period in 2008 to €1,957m.

Health and wellness

Cognis has pursued a “health and wellness” strategy over the past few years. This has helped the German company obtain high growth rates but the recession has turned the upward trend on its heels.

In face of the top line decline Trius remains convinced that the company business strategy is the right one. He said: “Our wellness and sustainability-based strategy has proven itself as one of the strongest drivers of success for all our businesses.”

Health and wellness has been at the core of the strategy for the food ingredient business. And compared with other sections of the business like construction, and industrial coatings where the concept is less obviously applied, health and nutrition has looked relatively resilient in the recession.

On a reported basis Q1-Q3 health and nutrition sales were down 6.8 per cent to €247m and organic sales were down 5.9 per cent.

Cognis said in a statement that these decreases were “due to the economic downturn in Europe and in particular in the dietary supplement market.”

Road to recovery

But there is evidence that sales are beginning to pick up. Overall sales volumes increased by 5.1 per cent between Q2 and Q3.

“Sales volumes are still relatively low, but they continue to move in an upward direction,” ​said Cognis CEO Antonio Trius.

And in spite of the sales declines, Cognis has succeeded in maintaining its profit figures. Even after a reduction in prices operating income for the first nine months came in at €270m – 2.1 per cent higher than in the same period last year.

Cognis said this achievement was mainly thanks to a favourable product mix and effective cost management. Trius said: “The significant savings achieved through our global cost optimization program enabled us to improve our operating result.”

Related topics: Suppliers, Financial plays

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