NATURE’S NO. 1™
Chr. Hansen’s Nature’s no. 1TM strategy was launched in 2013 with the aim of capturing the full potential of Chr. Hansen’s core business and pursuing broader opportunities within microbial solutions by leveraging the Company’s strong technology platform. The strategy was reviewed and reconfirmed in 2015/16 with minor adjustments. The next strategy review process will run in 2017/18.
Nature’s no. 1TM focuses on three primary objectives:
- Fully leverage the potential of Food Cultures & Enzymes
- Develop the microbial solutions platform in Health & Nutrition
- Creating further value in Natural Colors
As part of the Nature’s no. 1TM strategy, Chr. Hansen will not:
- Expand organically or through acquisitions in areas unrelated to the existing businesses within microbial solutions and natural colors
- Attempt to become a full-fledged pharma company
- Lose focus on cost control and operational efficiency
FULLY LEVERAGING THE POTENTIAL OF FOOD CULTURES & ENZYMESSuperior
As a market leader, Chr. Hansen remains strongly positioned and committed to drive growth in specific niches within dairy and other food segments. Chr. Hansen’s technologies cater to emerging consumer and food market trends, and deliver high impact and value to its customers.
Future growth opportunities are mainly based on fundamental market growth – not least in emerging markets – and on continuing to convert bulk starter users to DVS® formats, introducing new culture and enzyme functionalities, and expanding the use of bioprotective solutions.
Chr. Hansen has opportunities to further expand margins, mainly through the increased production capacity put in place in 2016/17, and the ability to upsell solutions that bring added value to customers’ products and/or processes.
FOCUS AREAS IN 2017/18
The key focus areas for Food Cultures & Enzymes in 2017/18 will be further developing the bioprotection market by way of a next-generation bioprotection product for dairy, strengthening Chr. Hansen’s position in emerging markets and starting to realize the benefit of the new production capacity in Copenhagen.
DEVELOPING THE MICROBIAL SOLUTIONS PLATFORM IN HEALTH & NUTRITIONSuperior
The business areas in Health & Nutrition are supported by global trends, such as increasing 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.
The product pipeline in plant health also offers attractive opportunities, and Chr. Hansen is currently conducting field trials to assess its potential.
Within the human microbiome area, Chr. Hansen sees significant potential to support partners in upscaling and establishing production processes, and several innovation collaborations are already well under way.
To support long-term growth in Health & Nutrition, a relatively high investment level will be maintained in innovation across all four business areas. Chr. Hansen will also pursue bolt-on acquisitions where these support existing business areas.
FOCUS AREAS IN 2017/18
The key focus areas for Health & Nutrition in 2017/18 will be ensuring continued value creation from the two acquisitions: LGG® in human health and NPC in animal health; expanding the commercial reach to new geographies in animal health; strengthening and progressing the pipeline of products across the four business areas; and continuing to develop existing and new partnerships in the human microbiome, while also enhancing production expertise.
CREATING FURTHER VALUE IN NATURAL COLORSSuperior
Increased regulation and growing consumer awareness are fueling the demand for cleaner food & beverage products, including natural ingredients. Chr. Hansen benefits from these trends, which are driving a fundamental long-term conversion from synthetic to natural colors. This trend has also started to materialize in the US market, pushed by consumer demand rather than regulation.
Chr. Hansen will ensure profitable growth, not least in the US, by strengthening the commercial organization, expanding the product offering within the FRUITMAX® coloring foodstuffs product range, improving cost-in-use solutions and optimizing the product portfolio of older products.
Profitability in Natural Colors has improved significantly – by 4.5 percentage points in two years – but is still below longterm expectations. Continued focus on optimization and simplification initiatives across the business offers opportunities to further increase profitability over the period.
FOCUS AREAS IN 2017/18
The key focus areas for Natural Colors in 2017/18 will be continuing to drive the conversion from synthetic colors to natural colors, particularly in the US and emerging markets; developing a stronger position in coloring foodstuffs to ensure continued growth; and optimizing products and processes to further improve profitability.