Chr. Hansen details five-year growth strategy
by Jeff Gelski
HOERSHOLM, DENMARK – Chr. Hansen will target annual organic revenue growth of 7% to 10% in the coming five years through a strategy that includes the tag line “Nature’s No. 1,” the Hoersholm-based company said Sept. 3.
The strategy will consist of six main themes: leveraging the potential of the cultures and enzymes division, developing the microbial platform in the health and nutrition division, creating more value in the naturally-sourced colors division, reinforcing Chr. Hansen’s position in emerging markets, driving innovation, and generating fuel for growth. Over the five years Chr. Hansen expects its improvement in EBIT margin to be lower than it has been historically because of investments.
“Based on a thorough review of our capabilities and an assessment of relevant market opportunities, we firmly believe we have an opportunity to take the company to the next level in terms of performance,” said Cees de Jong, chief executive officer of Chr. Hansen. “We are excited about shaping our future. Our strategy builds on our core competencies and is about evolution rather than revolution.
“The review has reaffirmed the attractive growth opportunities in Chr. Hansen’s core businesses and identified new opportunities for leveraging the company’s strong technology platform in the field of microbial solutions. Good bacteria are becoming an increasingly relevant way to address key unmet consumer and customer needs in an all-natural way, and we have the technology to develop these solutions. Simply put, we wish to be nature’s No. 1.”
Chr. Hansen said the dairy market continues to hold growth opportunities for its cultures and enzymes division, which had revenue of €420 million in the past fiscal year. The company sees an opportunity to reduce sugar in yogurt by making plain yogurt three times sweeter and another opportunity to reduce salt levels in cheese.
Within the health and nutrition division, which had revenues of €107 million in the past fiscal year, Chr. Hansen will enter the €1 billion biological crop protection market.
“Existing technologies and products provide a strong platform for entering the market through alliances and partnerships,” the company said.
Also within the health and nutrition division, Christian Barker on Sept. 30 will take over for Henrik Dalboege as executive vice-president. Mr. Barker joined Chr. Hansen last year as head of corporate strategic development.
In the naturally-sourced colors division, which had revenues of €172 million in the past fiscal year, Chr. Hansen will assist customers in cost-in-use areas and will develop an enhanced product offering. For example, the patented DairyMax allows dairies to sell colored whey for infant products.
In emerging markets, Chr. Hansen foresees room for growth, particularly in Asia.
“In order to fully capture the market potential in emerging markets, it is becoming increasingly important to adapt the product offering to regional and local needs,” the company said. “To meet these requirements, Chr. Hansen will focus on establishing a stronger presence in key markets. This includes a stronger and direct relationship with customers in specific countries, particularly in emerging Asia but also in countries like Turkey. This will be enabled by strengthening local organizations through improved application support and product development capabilities.”
For innovation, Chr. Hansen’s investments in research and development will be about 7% of revenue. The company will increase investments in plant protection and second-generation probiotics.