Raisio looks to Benecol brand growth amid company “renewal”

08 Aug 2018 --- Raisio is targeting renewed growth for its “star” international brand Benecol, with an increased focus on marketing products featuring the cholesterol-lowering plant stanol esters. The strategy includes a €2 million (US$2.3 million) marketing investment in the brand during Q2 and the opening of a new entity to serve the strong Irish market, as well as the launch of product innovations, including a new cereal bar line which uses the ingredient.

“Benecol is our international star brand. We believe in the future of cholesterol-lowering products. Half of the adult population are having elevated cholesterol levels and therefore we are investing quite a lot in the brand and for NPD as well,” Pekka Kuusniemi, CEO of Finnish-headquartered Raisio tells NutritionInsight.

Benecol products are among the very few foods that can use the health claim on disease risk reduction in the EU as well as in the US. In the EU, a disease risk reduction claim (Article 14) exists for the ingredient that allows users to state: “plant stanol esters have been shown to lower/reduce blood cholesterol. Blood cholesterol may reduce the risk of coronary heart disease.”

“We added some €2 million during Q2 to support the Benecol brand, mainly in our key markets of the UK and Finland. In Ireland, we are opening a new legal entity [Benecol Ireland] to support Benecol’s future in that important market. It has been established and will start its operations in September,” he notes.

Kuusniemi states that Benecol has been on the Irish market since 2010 and the company wants to strengthen its position there. “What is quite surprising for me is that unaided brand awareness for the Benecol brand in Ireland is 80 percent, therefore the foundation is very strong. That is something that I want to utilize further,” he adds.

Today (August 8) Raisio reported its second-quarter results. Net sales totaled €59.7 million (US$69.2 million) in Q2, down from €61.4 million (US$71.1 million) in the corresponding quarter last year. Healthy Food Division’s net sales totaled €47.8 million (US$55.4 million), compared to €51.6 million (US$59.8 million) last year, influenced by the marketing investment. 

Raisio expects net sales of the group’s continuing operations to total some €230 million (US$266.7 million). The company estimates that the comparable EBIT for the group’s continuing operations is some 12 percent of net sales. Exchange rates will continue to significantly affect Raisio’s net sales and EBIT.

In addition to foods and fish feed sales, Raisio’s net sales for continuing operations consist of exports of raw materials, such as grains. Raisio has identified the problem areas and initiated corrective measures in the markets where the net sales development did not meet expectations in early 2018.

Raisio reported that its key strategic target is to grow its Healthy Food business both organically and through acquisitions. With its structural reforms completed, Raisio has targeted all the resources to support the medium-term organic growth of the new Healthy Food Division. Raisio also seeks growth through acquisitions. The company is net debt free and has a strong balance sheet, which allows acquisitions that suit the company’s core business.

On May 4, 2018, Raisio announced that it had signed an agreement to sell its cattle feed business to Lantmännen Agro. The business is expected to transfer to the new owner in October-November 2018. Due to the business divestment, Raisio treats the cattle feed business as a discontinued operation and has revised the group’s net sales forecast for the continuing operations. As the cattle feed business is moved to discontinued operations, the relative profitability for continuing operations will slightly improve.

In addition to foods and feeds, Raisio’s net sales consist of exports of raw materials, such as grains. Raisio has identified the concerns and initiated corrective measures in the markets where the net sales development did not meet the expectations in early 2018.

“Raisio is at the beginning of the new, focusing on healthy and responsibly produced food. We continue our determined work to support profitable organic growth. The reorganization completed this spring allowed us to steer all resources to promote growth,” Kuusniemi said in a statement.

“We have identified problem areas regarding the businesses where net sales and profitability development do not meet expectations and started corrective actions. We have set an ambitious but realistic recovery schedule for these businesses,” he notes.

“As planned, we have significantly increased marketing investments, particularly in Benecol, which has lowered the Healthy Food Division’s EBIT level. Benecol product sales were at the comparison period level in the UK, whereas in Finland, strong growth continued. In line with its strategy, Raisio launched new Benecol products into new product categories in the UK, Finland and Poland in the first half of the year,” Kuusniemi adds.

The company recently debuted a new cereal bar (the UK, Poland and Finland) and a Greek-style yogurt (the UK and soon to be launched in Finland), which were both launched during summer containing their plant stanol esters. 

“Cereal bars is an area where Benecol was not active in earlier and that needs quite a lot of support in order for the loyal Benecol consumers to find the product on the new aisle. Plus of course, we want to gain new Benecol users as this is an on the go product. Traditionally, the Benecol products have been on the dairy aisle and are chilled products,” Kuusniemi tells NutritionInsight. 

Using plant stanol esters in cereal bars was a technical challenge that product developers were able to overcome. “It has been quite a long process and this product works perfectly with the stanol esters. It is a single daily dose product that contains 1.6g per bar. It is a great addition to the Benecol menu when you are on the go and want a sweet snack while running,” he notes.

“Benecol is the most well-known and international brand within the Raisio group,” says Heidi Hirvonen, Communications and IR Manager at Benecol. “We have been launching new products in several markets this spring and we have invested more into Benecol to market the novelties and also starting to get more people to use products and gain more brand awareness.”

“For some time we haven’t had any real novelties for the Benecol brand and we are really happy for this now, as you need to launch new products to different categories to increase brand awareness,” she concludes.

By Robin Wyers