DSM hones focus on health, nutrition and sustainability in latest business restructure

14 Sep 2021 --- Royal DSM is reorganizing its Health, Nutrition & Bioscience activities into three business groups as it begins a review of strategic options for its Materials businesses, including a possible change of ownership.

This is part of the Netherlands-based giant’s new strategy to fully focus its resources and capabilities to address the “urgent” societal and environmental challenges linked to the way the world produces and consumes food.

“By focusing exclusively on our health, nutrition and bioscience activities, we will be able to operate with greater agility and impact to meet the growing need for better and more sustainable nutrition,” say co-CEOs Geraldine Matchett and Dimitri de Vreeze.

Harnessing synergies
DSM says that the new market-focused business groups – which are Food & Beverage; Health, Nutrition & Care; and Animal Nutrition & Health – will be much closer aligned with their respective customers after the reorganization.

Lieke de Jong, DSM media relations, tells NutritionInsight that there are some growth synergies between the three businesses that exist in the current structure.

“However, it will be more straightforward to realize between our new business groups going forward. These synergies encompass both the underlying biotechnology and chemistry but also the shared importance of health and nutrition for our customers. The combination of the three business groups is stronger than each individually.”

By integrating activities currently performed by the DSM Innovation Center, each group will be fully equipped to rapidly develop science-based market-ready innovation.

This reorganization comes at the heels of a “recalibration” late last year, which saw the company roll out a new strategy targeting the human nutrition and health markets in particular. It is also embracing personalized nutrition, which is being positioned as a “third muscle” to DSM’s corporate strategy. Advances in bioscience and technology offer scalable solutions to tackle food system challenges.

Spotlight on Health, Nutrition & Care
With around €2.5 billion (US$3 billion) of existing sales, the Health, Nutrition & Care business group provides solutions for consumers in early-life nutrition, dietary supplements, pharma, medical nutrition, personal care, fragrances and biomedical materials. It also provides nutrition improvement for the most vulnerable communities.

Its portfolio includes Ampli-D, a rapid-acting and potent form of vitamin D; an extensive algal lipids portfolio; and personalized nutrition initiatives such as Hologram Sciences.

Under this umbrella also comes Glycom, a human milk oligosaccharide (HMO) supplier DSM acquired in April 2020. Earlier this month, it settled a patent dispute with Chr. Hansen.

Offering broad portfolios
The Food & Beverage business group combines the food, beverage and pet food activities of the current DSM Food Specialties and DSM Nutritional Products divisions. It represents over €1 billion (US$1.2 billion) in existing sales and will address taste, texture and health solutions.

The portfolio includes EverSweet, a natural calorie-free sweetener, and CanolaPRO, a plant-based alternative protein. It will also be home to the dairy-based flavorings from First Choice Ingredients, pending regulatory approval of this recently announced acquisition.

The third group is Animal Nutrition & Health Business Group, which currently has over €3 billion (US$3.5 billion) in existing sales. It targets transformation in the sustainability of animal protein production, offering products like vitamins, carotenoids, eubiotics, algae-based fish oil alternatives and methane inhibitors.

Further reorganization
In light of the restructuring, DSM acknowledges that its two Materials businesses will likely “not be able to maximize their full potential to drive the important industrial shift to a bio-based and circular economy.”

Going forward, the Materials business group will therefore be managed largely on a stand-alone basis, and the global support functions will be realigned accordingly.

DSM is also unveiling a new leadership structure with a reshuffled executive committee.

It will begin reporting according to this new structure from January 2022. Financial re-statements will be provided prior to the publication of the Q1 2022 trading update.

In its H1 2021 results, DSM highlighted that personalization and bioscience would continue to be a significant focus.DSM will outline its progress on its latest commitments each year in its Integrated Annual Report.

Quantifiable sustainability targets
DSM is also committing to a series of new quantifiable measures to address urgent societal and environmental challenges linked to how the world produces and consumes food.

These commitments, which it aims to achieve by 2030, cover three areas where the company believes it can make the greatest positive impact together with its business partners: Health for People, Health for Planet and Healthy Livelihoods.

Through investment in its science-based innovations, extensive partnerships and advocacy activities, DSM aims to help deliver change to ensure accessible, affordable, healthy nutrition and healthy livelihoods within planetary boundaries.

Improving quality of life
Under the “People” banner, DSM’s goals are to enable the micronutrient gap of 800 million vulnerable people to be closed and to support the immunity of 500 million people.

This will be via fortified staple foods and health supplements that deliver a proven and cost-effective method of combating malnutrition, as well as empowering consumers to achieve healthier diets.

It will also step up its role in delivering essential vitamins, minerals and other ingredients to consumers worldwide through high-performance dietary supplements.

DSM will also support the livelihoods of 500,000 smallholder farmers across value chains together with partners.

Rethinking food systems
To safeguard planetary health, DSM will target enabling double-digit on-farm livestock emission reductions and reaching 150 million people with sustainable plant-based protein foods.

For example, it will continue developing its sustainably produced plant-based foods and beverages that provide a tasty and nutritious alternative to meat, fish or dairy.

“The way we produce and consume food as a society contributes to major global challenges, such as climate change, malnutrition and poverty. To solve this, we need to collectively rethink our food systems from farm to fork,” urge Matchett and De Vreeze.

By Katherine Durrell

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