Strategy update 2018: NATURE’S NO. 1 SUSTAINABLY
Chr. Hansen remains committed to the Nature’s no. 1 strategy, launched in September 2013 and reaffirmed in April 2016. The strategy aims to capture the full potential of Chr. Hansen’s core businesses while at the same time pursuing broader opportunities within microbial solutions by leveraging the company’s strong technology platform.
Maintaining market and technology leadership in established markets and developing new markets in adjacent areas remain clear priorities.
The sub-heading “Sustainably” refers to the sustainability of both the strategy and the business model – but also to the fact that the element of sustainability is becoming a more central element of the opportunities that will drive the business forward in the coming years. New technologies like bioprotection can help reduce food waste and increase food safety for the benefit of customers and consumers.
What has changed since ‘reaffirmed’?
Nature’s no. 1 continues to focus on:
- Driving the penetration of new innovation
- Reinforcing position in growth markets
- Generating fuel for growth
Each business unit has separate focus areas that contribute to the overall company ambitions.
As part of the Nature’s no. 1 strategy, Chr. Hansen will not:
- Expand organically or through acquisitions in areas unrelated to its existing businesses within microbial solutions and natural colors
- Expand enzyme business outside dairy
- Attempt to become a full-fledged pharma company
- Lose focus on cost control and operational efficiency
Chr. Hansen has many opportunities to continue to grow the core segment of dairy in Food Cultures & Enzymes. One example is to increase the market penetration of new products and concepts, like adding probiotics, bioprotection or developing low-lactose versions of dairy products. Other opportunities can be found in adjacent areas, for example in fermented beverages or in fresh foods like ready-to-eat salads or salmon.
The strong position in the market that Chr. Hansen has globally will be reinforced. We will continue to expand our market presence in growth markets, where closer proximity to key customers will be prioritized. This could be by expanding the sales organization, or by adding more customer facing application support, and by offering regionally tailored concepts.
Finally, utilizing the newly expanded production capacity at our Copenhagen facility will support growth and drive scalability, and digitalizing core processes in production and R&D will increase efficiency.
Health & Nutrition’s business areas are supported by global trends, such as the growing awareness of the adverse effects of antibiotics and chemical pesticides, resource scarcity, increasing health costs, and a growing scientific understanding of the benefits of “good bacteria.”
Chr. Hansen has opportunities to expand and grow its businesses in Human- and Animal Health through innovation in the form of new strains and new applications, and further penetration with key customers and in new geographies. In the near term, new products will be launched in Human Health, whereas new products in Animal Health are expected towards the end of the period. For Animal Health the primary near-term focus is to further strengthen the global route to market.
In Plant Health, the recently launched products, Quartzo® and Presence®, will be the main growth drivers in the near and mid-term, through increased penetration in the sugar cane industry via our partner, FMC. Applications for other crop types are currently in trial phases.
Within the Human Microbiome area, Chr. Hansen sees significant potential to support partners in upscaling and establishing production processes.
Chr. Hansen will pursue bolt-on acquisitions where this will support existing business areas.
Increased regulation and growing consumer awareness are fueling demand for natural colors in place of synthetics. Conversion to natural colors is progressing in all regions at varying paces, and growth prospects remain attractive.
Chr. Hansen will focus on balancing the goal of growing faster than the underlying natural colors market and increasing the profitability of the business. New investments in production and application development facilities will create a stronger business.