Chr Hansen CEO Lars Frederiksen told NutraIngredients.com this morning that he would be surprised if the generic 13.1 opinion on Bifidobacterium BB12, which has been researched for gastrointestinal and immune health, is positive.
“We expect feedback on a batch of 13.1 claims this week – and we expect [the opinion for] our product to be negative. We think the documentation is not sufficient. We could not enter into dialogue before to understand what was needed, so we will have to go through another application.”
There is currently great uncertainty around EFSA assessment of health claims documentation. “EFSA, due to overwhelming workload, has not been able to enter into discussions with industry. We were playing in the dark.”
Second time around Chr Hansen will submit for a 13.5 claim on new function. Compiling a whole new dossier in a different category, taking account of lessons the industry has learned, does mean more research and admin cost.
Indeed, in today’s Q2 results the company said that R&D expenses have increased, and Frederiksen explained that most of the new spend relates to probiotics and health and nutrition. “We are investing hard in that area,” he said – though he added that dairy cultures are also a hot area of opportunity.
“We are in favour of documenting probiotic products, it is of benefit to the industry and to our business as well,” Frederiksen said.
Few new launches
The uncertainty around health claims for probiotics has taken its toll on sales of probiotic bacteria.
In its Q2 results released today Chr Hansen reported6 per cent year-on-year organic growth in its cultures and enzymes division, with revenues of €90m for the three month period. However this was driven by momentum from cheese and fermented milk and wine cultures, a boon that was partly off-set by lower sales of probiotic cultures.
Frederiksen said that while the uncertainty over health claims persists manufacturers are reluctant to launch new products.
“The problem is that new entrants are holding back, waiting for more clarity in the regulatory situation,” he said, while acknowledging that there is also a slowdown in sales to big players in the market.
The Danish company’s overall Q2 results showed 24 per cent growth, of which 17 per cent organic, to €315m. Operating profit before special items was up by 23 per cent to €71m. The fine performance was seen across all three business units, with colours and blends performing particularly well, and across all geographies.
While the growth rate in emerging markets was highest, with 24 per cent organic growth in Asia Pacific, Africa and Middle East (APAME) and 20 per cent in South America, the mature markets of Europe and the United States also saw growth of 18 and 8 per cent respectively.
The Q2 results has led the company to raise its outlook for the full year for the second time. Revenue for full year 2010/11 is now expected to be up 12-14 per cent on last year (€576m), compared to previous predictions of 11-13 per cent made on 12 January and the significantly more modest 8-10 per cent made on 2 November 2010.
“All in all, we continue to prove we are a resilient business with broad-based growth platform and able to expand our earnings,” Frederiksen said.