At a glance
Chr. Hansen is a global bioscience company headquartered in Hørsholm, Denmark, developing natural ingredient solutions for the food, nutritional, pharmaceutical and agricultural industries. The Company was founded in 1874 by the Danish pharmacist Christian D. A. Hansen who had invented an industrial process to extract rennet for cheese making.
With revenue of EUR 970 million and about 3,000 employees,1 Chr. Hansen today is a leading microbial player and manufacturer of food cultures, dairy enzymes, probiotics and HMOs.
Chr. Hansen is uniquely positioned when it comes to leveraging its microbial and fermentation technology platforms to address some of society’s most pressing challenges such as enabling more sustainable agricultural practices with fewer pesticides and antibiotics, reducing food waste and supporting global health through well-documented probiotics. Chr. Hansen’s commitment to pioneering microbial science to improve food and health for a sustainable future is also reflected in its purpose “Grow a Better World. Naturally.”
Organizationally, the company is split into two segments:
- Food Cultures & Enzymes
- Health & Nutrition.
Please note that Chr. Hansen announced on September 26, 2020 that it will divest its Natural Colors division to EQT. Until closing which is expected for spring 2021, the business is reported as discontinued business. Read announcement.
Our business model
As a specialty ingredients supplier, Chr. Hansen serves different niche markets with attractive growth prospects and high entry barriers. The Company’s business model is centered around strong innovation capabilities, a scalable production set-up and longstanding customer relationships all of which places Chr. Hansen in a very strong competitive position.
While our ingredients usually only make up a small part of a product’s cost base, they are strategically important and in the case of our starter culture and coagulant business they are indispensable.
Our product solutions help customers:
- Define and differentiate their products (flavor, texture)
- Increase productivity and yield
- Extend shelf life and increase food safety
- Substitute artificial ingredients for clean-labeling
- Promote health and well-being.
Loyal, diversified customer base across industries
Chr. Hansen has a broad customer base with the top 25 customers representing around 30% of revenue.
Food Cultures & Enzymes serves a highly fragmented customer base ranging from local, family-owned specialty producers to large, multinational groups. The majority of its 3,000 customers are dairies but by moving into adjacent areas, Chr. Hansen is expanding the customer base to include other food and beverage markets.
As dairy cultures represent a critical ingredient, customer loyalty in the core dairy business is very high. This is not only due to long-standing relationships but also thanks to Chr. Hansen’s unrivalled, highly specialized technical support which operates from several application centers worldwide as well as its comprehensive product range.
Chr. Hansen’s food cultures & enzymes are sold directly under one global commercial model except when serving smaller customers where the Company works with distributors. To further enhance its service offering, Food Cultures & Enzymes has started to develop digital, data-based solutions.
Health & Nutrition is selling probiotic solutions for dietary supplements and infant formula (Human Health), feed ingredients (Animal Health) and crop protection (Plant Health). Probiotics are defined as ‘live microorganisms that confer health benefits on the host’ (FAO/WHO, 2001).
In Human Health, Chr. Hansen has an unparalleled probiotic offering across indication areas, life stages and product formats that was further strengthened through acquisitions in women’s health (HSO Health Care) and the multi-strain segment (UAS Labs) in 2020. Chr. Hansen largely sells directly to a broad range of customers in the nutrition and health industry ranging from pharma over-the-counter to consumer health care companies and e-commerce specialists. The Company has a leading strain portfolio with 5 out of the 10 most documented probiotics and aims to be the industry’s “voice of science” by continuing to invest in R&D, clinical documentation and scientific marketing.
With the acquisition of Jennewein in 2020, Chr. Hansen has entered the fast-growing market for Human Milk Oligosaccharides (HMOs) selling directly to infant formula brands.
In Animal Health, Chr. Hansen sells probiotics for animals and has one of the industry’s most comprehensive product portfolios for cattle, swine and poultry as well as silage inoculants. The North American market is the most important market for Chr. Hansen. The animal probiotics are sold to various players along the farming value chain including, pre-mixers, feed mills, large integrators and small farmers. Outside of North America, Chr. Hansen works predominantly with distributors and is working on strengthening the route-to-market.
In Plant Health, Chr. Hansen sells biological crop protection solutions for a variety of crops. The Company focuses on bionematicides, biostimulants and biofungicides. Today, its products are primarily sold to sugarcane and soybean farmers in Latin America through its partnership with FMC, but Chr. Hansen’s strategy is to expand into other crops and geographies.
Microbial powerhouse with strong innovation muscle
Chr. Hansen draws on more than 145 years of experience in working with microbes and possesses deep knowledge across the entire value chain from the discovery of new strains to scale-up and industrial production. The Company’s collection of bacteria contains around 40,000 strains and is continuously being expanded to develop new microbial solutions for different end market applications. Furthermore, Chr. Hansen leverages new technologies as well as a network of more than 120 external partners to bring innovations to market faster.
R&D activities are closely aligned with our strategy and resource allocation and pipeline progress are tightly managed and monitored by a Portfolio Board that was established in 2018.
As innovation becomes a more important growth driver, relevance of intellectual property is also increasing, and Chr. Hansen has a proactive IP strategy in place to protect new products including their functionalities in specific application areas as well as production and formulation technologies.
Cost leadership due to scalable production
For the microbial business Chr. Hansen runs a consolidated production set-up which allows the Company to drive scalability benefits. Main production facilities are located in Denmark, Germany, France and the US where Chr. Hansen produces different bacteria strains by fermentation that are subsequently blended into cultures. An increasing degree of automation also helps to drive profitability. Raw material inputs are mostly commodities such as skim milk powder, vitamins and sugars and as such play a secondary role. Waste streams from culture production are used as fertilizers or for biogas where possible.