The study looks at how the use of cannabis is impacting consumption in key food and beverage categories in key markets.
GlobalData’s new “Hot Topics” cannabis study on the claimed consumption behavior of cannabis users compared to non-users highlights that this is a large and growing consumer group, who are behaving differently to the general population, in ways that brand owners and their stakeholders may not fully realise.
Jenny Questier, Consumer Analysis Director at GlobalData, commented: “Currently, there is little research data or analysis available to help companies understand the impact of a new cohort of cannabis users in consumer packaged goods markets where the drug has been legalised. While this study’s findings are indicative, they could apply to any market where cannabis use is prevalent as they do provide some useful insights into the impact that cannabis users consumption behavior could have on product choices being made in key food and beverage categories and which demographics are important in future product development and positioning.”
The study entitled, “Hot Topics Report: Impact of cannabis use on consumption in key markets”, provides a top-line indication of how consumers who claim to use cannabis, describe their use of the drug in five key markets which have legalised the recreational use of the cannabis, namely: the US, South Africa, Canada, Mexico and Germany, and the claimed impact this may have on consumer consumption in the alcoholic drinks, non-alcoholic drinks, savory snacks, and chocolate and confectionary categories in each of these markets.
The study reveals that cannabis users have a tendency to stay at home more, are more concerned about their physical and mental health, spend more time online, and perhaps as a consequence of this, order more food online, when compared to non-cannabis users. Interestingly, the known side effects of cannabis use of increasing hunger and thirst are significantly impacting on consumers’ net consumption of non-alcoholic beverages, savory snacks and chocolate and confectionary, however, the drug’s use currently seems to have a limited impact on alcohol consumption overall.
This is an important cohort for consumer packaged goods companies because the number of recreational cannabis users is already significant and is set to grow further. In the US, cannabis is legal for recreational use in 24 out of 50 states, according to the *Pew Research Centre. In the US, there were an estimated 17.7 million daily cannabis users recorded in 2022, according to research published in the journal Addiction, based on data collected by the National Survey on Drug Use and Health.
Questier continued, “In the coming decade, the number of cannabis users is set to grow globally as more US states are likely to legalize recreational cannabis use, public support may lead more countries to do the same, and more people are likely to take up the habit as a means of relaxation, enjoyment, and for perceived health benefits. It is imperative that brands and manufacturers of food and beverages understand what this may mean for future innovation and target consumer groups.”
Here are some of the top-line indicative findings from the study for each food and beverages category surveyed in each market:
Alcoholic and Non-alcoholic Drinks
Cannabis use does not appear to have a significant impact on alcoholic drinks sales!
Claimed alcohol consumption remains largely unchanged overall as a result of cannabis use, generally holding steady at a plus or minus 1 % net change in most markets. Canada and Mexico have a small net decline in alcohol consumption with Germany’s high + 10 % net change attributed to a smaller sample size as cannabis has only recently been legalised in the country, and reported use remains relatively low.
An assumption that alcohol sales overall might suffer from the increased use of cheaper cannabis products as the stimulant effects are similar is not evident from this study. However, that’s not to say that the alcoholic drinks market isn’t changing; female cannabis users are drinking less alcohol, but males are drinking more.
Cannabis use makes you thirsty for non-alcoholic drinks!
All markets in this study saw a significant rise in the consumption of non-alcoholic drinks by cannabis users. In some markets, this rise occurred among all demographics, in other markets younger consumers dominated.
Savory Snacks and Chocolate & Confectionary
Cannabis use gives you the munchies, boosting savory snacks sales!
All markets saw a rise in savory snack consumption due to cannabis use; North American markets had particularly large rises. Unlike beverages, Gen Z do not dominate savory snack sales, instead it is older Gen Y and Gen X consumers.
Cannabis use gives you a sweet tooth, increasing chocolate & confectionery sales!
Cannabis use drives a significant rise in chocolate and confectionery consumption in most markets, although the demographic leading this varies from market to market.
Questier adds: “The top-line results from this indicative study show that cannabis users’ consumption behavior is different from other consumers. Consumption of soft drinks, savory snacks and chocolate and confectionery is significantly increased, with the balance between male and female, and young and old consumers shifting in each market. Whilst there is limited claimed impact from cannabis users on total alcohol consumption, the demographic make-up of this market is nevertheless changed by the presence of cannabis.
“With little research conducted into this area to date, the study’s indicative findings suggest that the implications of cannabis use for consumer packaged goods companies and their stakeholders could be significant for brand strategy, consumer targeting, portfolio management, innovation, sales, advertising, and marketing. Further research by brand, category, and geography could be required to ensure that these implications are understood and appropriate strategies devised to manage them.”
Free sample pages from the “Hot Topics Report: Impact of cannabis use on consumption in key markets”, are available here
AGRANA Beteiligungs-AG’s Supervisory Board approved AGRANA NEXT LEVEL, the new Group strategy presented by the Management Board. The implementation of the measures it details will significantly increase AGRANA’s competitiveness in the future and is the company’s response to challenges such as economic uncertainty, geopolitical crises, high raw material volatility and increasing cost pressure. The strategy focuses on system change and profitable growth, and aims to reduce the company’s dependency on market volatility as well as increase its basic profitability.
The core element of AGRANA NEXT LEVEL is the transformation of the AGRANA Group into a streamlined, strategic holding company with two strategic business units: “Agricultural Commod- ities & Specialities” and “Food & Beverage Solutions”. This reorganisation will enable the Group to pool its expertise in a targeted manner and make greater use of existing synergy potential both in terms of markets and costs. The resulting annual savings potential, which will be fully effective from the 2027|28 financial year onwards, amounts to approximately € 80 – 100 million and is an integral part of AGRANA NEXT LEVEL.
All the details required to realise the savings effects resulting from AGRANA NEXT LEVEL will be worked out in detail by the end of the current financial year 2024|25 and then implemented step by step.
Stephan Büttner (Photo: AGRANA)
AGRANA CEO Stephan Büttner: “AGRANA NEXT LEVEL is our roadmap through a multitude of challenges that will affect our employees, customers, suppliers and owners alike. The trans- formation of our company is designed to make our organisation more effective and agile in future. With this new strategy, we’re responding to current challenges while also proactively shaping our future. We’ll achieve cost and market synergies, which will strengthen our profit- ability and increase our scope for future profitable growth. By systematically implementing our portfolio strategy and focusing on innovation, we’ll lead AGRANA into a successful future.”
In addition to structural transformation, sustainability remains a central component of AGRANA’s NEXT LEVEL strategy. We’re on track to achieve net-zero emissions (Scope 1+2) by 2040; and Scope 3 by 2050 at the latest. “This commitment is not only part of our social responsibility, but also a strategic imperative to remain competitive in the long term. We’ll have invested more than € 600 million in sustainable technologies and energy efficiency by 2040 to ensure that AGRANA meets the requirements of the Paris Agreement on climate change,” emphasises CEO Büttner.
The new role of the holding company
In future, AGRANA Holding will focus on the strategic direction of key areas, including strategy and transformation, human resources management, IT, procurement and operations excel- lence. Operational services are being combined to ensure efficient management of the Group. Consolidating similar functions and streamlining structures avoids redundant processes and ensures simpler, more efficient workflows.
A new role for the divisions
In order to combine the competencies of the AGRANA Group effectively and to align them with the market as well as create cost synergies, the company’s structure will be transformed into a more functional and permeable business model. While four companies (divisions) will remain under the holding company, they will be strategically combined into two business units, “Ag- ricultural Commodities & Specialities” (sugar, starch, fruit juice concentrate) and “Food and Beverage Solutions” (fruit flavour, brown flavour & spicy preparations, flavourings, syrups, sauces) to better meet the different management requirements.
“Agricultural Commodities & Specialities” will focus on cost efficiency, from raw material pur- chasing to production due to the broad standardisation of products and high competitive pres- sure. This business unit will build on its strength of having a regional footprint with its proximity to raw materials and proven expertise in raw material management.
In future, the low margins resulting from the dependence of raw material processing on agri- cultural cycles, climate and market conditions will be counteracted by optimising processes and technologies. The structural similarities between sugar and starch production offer great synergy potential, which AGRANA will be exploiting by aligning production and maintenance processes, as well as by intensifying technology transfer (for example, in emission-reducing energy systems).
In “Food and Beverage Solutions”, management focuses on developing innovative solutions for and with industrial customers. Here, AGRANA can draw on its market leadership in fruit preparations with a global footprint, worldwide customer proximity and innovative strength. The focus is on customer-specific, value-added products and the co-creative development of customised solutions with customers in the food and beverage industry. This higher level of innovation will lead to products with stronger margins and better opportunities for differenti- ation in global markets. In particular, the “Ice Cream”, “Food Service” and “Flavours” customer segments will be further promoted. The existing collaboration between AGRANA Fruit and AUSTRIA Juice in product development will be intensified, for example by using AUSTRIA Juice’s flavour expertise for dairy products.
“AGRANA NEXT LEVEL is not just the name of our new strategy; it’s the philosophy for the future of our entire organisation. The strategy was developed by the AGRANA management team with the support of external expertise and the diligent work of an internal project team, to whom I’d like to express my sincere thanks. We’re taking many valuable things with us from our almost forty-year company history and we’re leaving some things behind us as we enter a new era. Knowing that we have a strong team of many outstanding colleagues, we’re confident that the transformation we’ve begun will be a success story and that we’ll continue to succeed as we chart our course into the future,” concludes CEO Stephan Büttner.
From today, 75 % of the electricity used to make Britvic soft drinks in Great Britain – from Fruit Shoot to Tango, Robinsons to J2O – is coming from a 160-acre solar farm in Northamptonshire.
Providing clean energy to factories in Rugby, London and Leeds, the ten-year solar power agreement covers three quarters of Britvic’s electricity needs in this country – with the aim of reaching 100 % solar powered operations in the near future.
The solar site, commissioned in January 2024 and operational from today, will generate 33 Gigawatt hours (GWh) of energy, enough to power the equivalent 11,500 homes. This could cut as much as 1,113 tonnes of carbon dioxide from the drink manufacturer’s supply chain each year – the equivalent of planting 260,000 trees.
Working with renewables provider Atrato Onsite Energy, the 650,000 square metre solar installation, will scale up to produce 28 MWp. This initiative is part of Britvic’s long-term commitment to achieve net zero carbon emissions by 2050.
Sarah Webster, Britvic’s Director of Sustainable Business, said: “This is an exciting opportunity to ensure that the some of the country’s most recognisable and much-loved soft drinks are powered by renewable energy.
“We know consumers want to buy more sustainable products, and this is another step towards reducing carbon emissions and our long-term sustainability targets.”
The project makes use of a former quarry site that is unsuitable for farming, with double-sided solar panels that use tracking devices to follow the sun, increasing efficiency by 10 %. The site will provide opportunities for allowing nature to flourish – a rewilding approach that will increase biodiversity.
The announcement is the latest milestone in Britvic’s Healthier People, Healthier Planet sustainability strategy. Last year Britvic signed an agreement to produce Ballygowan Mineral Water using 100 % renewable electricity from wind energy. The company also launched an £8 million project to improve energy efficiency and cut carbon emissions by 50 % at its Beckton site.
Gurpreet Gujral, Managing Director, renewable energy at Atrato Group said: “We are thrilled to complete this landmark and unique agreement with Britvic, reducing carbon emissions while delivering attractively priced energy. Our business model is all about designing unique structures for clients tailored to their energy consumption needs and real estate site constraints, while delivering on sustainability targets and lower energy costs.”
Chris Bowden, Managing Director of Squeaky Clean Energy, said: “Having pioneered the use of corporate power purchase agreements in the UK it has become abundantly clear that new and innovative contracting structures are needed to accelerate the transition to clean energy. The Squeaky team is incredibly proud to have scored another clean energy first with a unique power purchase agreement arrangement that enables Atrato to de-risk the financing of its project and Britvic to deliver on its Healthier People, Healthier Planet sustainability mission.”
About the data, originally provided by Britvic: Carbon dioxide reduction is calculated based on the CarbonFund’s assessment that a single kWh is responsible for 0.3712 kg of carbon dioxide.
HONEST Kids to remain in company’s portfolio, with HONEST teas product line to be phased out
The Coca-Cola Company is challenging itself to think differently about how its brands help accelerate business transformation, reflect consumer choice and promote growth as a company. This means rationalising its lineup of drinks and prioritising fewer, bigger brands with the greatest potential for scale and profitable growth.
While the HONEST Kids portfolio is quickly growing and will remain a successful part of the business, the HONEST teas product line will be phased out of The Coca-Cola Company’s beverage portfolio at the end of 2022.
Gold Peak, a national brand, and the regional Peace Tea offering will now anchor the company’s ready-to-drink tea (RTD) strategy in North America.
“Shifting from a three-brand tea portfolio to a prioritised two-brand tea lineup will free up investment resources and supply chain capacity to better meet consumer needs and capture share in the category,” said Sabrina Tandon, group director, RTD Tea, Coca-Cola North America Operating Unit. “We believe Gold Peak and Peace Tea are best positioned to meet consumer preferences for high-quality brewed teas with different levels of sweetness and flavour.”
The Coca-Cola system will continue to produce and distribute the HONEST Kids line of organic juice drinks and explore licensing ventures and innovation opportunities for the HONEST brand in other categories. “We are phasing out the HONEST teas product line, but are not selling the HONEST brand,” Tandon clarified.
Gold Peak launched in 2006 and became a billion-dollar brand in 2015. The brand transitioned to a real-brewed formula in 2018, appealing to “tea truists” who value tea-forward taste profiles and high-quality ingredients.
Peace Tea has built a loyal, Gen Z following in the Midwest, Northeast and Southeast with fruit-forward flavours offered in colourful, 23-oz. cans and a fun, free-spirited personality.
Mainstream brands like Gold Peak and Peace Tea are driving growth of the RTD tea category. Sales of both Gold Peak and Peace Tea have increased during the COVID-19 pandemic as shoppers gravitate both to beverages with immune-boosting properties and multi-serve packaging options for at-home consumption. HONEST teas, which are primarily offered in single-serve bottles with a strong concentration in the Northeast and along the West Coast, have been negatively impacted by a drop in immediate consumption sales and limited glass supplies.
“Ongoing supply chain challenges mean we are having to prioritise production and distribution of certain product SKUs, and that we’ve been unable to meet consumer demand for Gold Peak,” Tandon added. “This, among other factors, helped drive this very difficult decision.”
Tandon also cited some overlap among Gold Peak and HONEST tea consumers, adding, “We see endless runway with Gold Peak and are excited to expand the trademark with new product and packaging innovations that will appeal to the HONEST Tea consumer.”
The HONEST brand was founded in 1998 by Seth Goldman and Barry Nalebuff. In 2008, The Coca-Cola Company took a 40 % investment stake in HONEST before fully acquiring the brand in 2011.
Tandon credits HONEST tea with helping the company create a new route to market into the natural foods channel, where brands like Simply, Topo Chico, vitaminwater and smartwater remain.
Premium fruit and vegetable ingredients supplier, SVZ, is pleased to announce its new brand tagline, ‘Growing better together’. Accurately demonstrating the business’ sustainable, collaborative values, the tagline also indicates SVZ’s continuing commitment to growing a better, greener world together with its customers and partners.
SVZ is passionate about collaborating with its partners, customers, farmers and suppliers to provide the very best fruit and vegetable purees, concentrates and NFC juices all year round. To further demonstrate the importance of trust, connection and partnerships across the entire supply chain, SVZ’s ‘Growing better together’ slogan represents everything the company stands for in working towards a healthier world for future generations.
SVZ has also refreshed its website to display these collaborative, future-focused values. Easy to navigate and with a refreshed design, the platform reflects the company’s growing better together ideals as it promotes a smoother transaction from concept to consumer.
Pieter Spanjers, CEO, SVZ comments: “At SVZ, ‘growing better together’ is what we do best. From our own employees to our farmers and customers, we’re delighted to work in such close collaboration. It’s only by strengthening these connections that we can create the highest-quality, tastiest fruit and vegetable ingredients.
Take our product development programme, for example, which is based on the latest trends and consumer needs. The ingredients we create are tailored to our customers’ requirements, and it’s only by working closely with our partner farmers that we can ensure that their needs are met with a great taste and high nutritional value. Plus, our connection with growers also means that we can guarantee sustainability credentials in our ingredients, through initiatives like a reduction in pesticides and water usage.
Our new website, which has been built to enhance the user experience, will be a key tool for close collaboration with various stakeholders and we look forward to growing together with our partners on the platform. We work on a global scale with our customers, suppliers and employees of Cosun and SVZ to co-create sustainably sourced ingredients that will appeal to consumers worldwide. Together, we can build a future-proof supply chain for our children and future generations and, ultimately, grow better together.”
GEA Group AG announced a comprehensive climate strategy. With the corresponding climate targets, GEA is making a clear commitment to achieve net-zero greenhouse gas (GHG) emissions along its entire value chain by 2040. The company has submitted its net-zero commitment and 2030 interim targets to the Science Based Targets initiative (SBTi), the globally recognized, independent body for reviewing climate targets. Validation of GEA’s interim targets by SBTi is expected in the second half of 2021, confirming GEA’s targets are aligned with the latest climate science and are effectively contributing to the 1.5 degrees Celsius target of the Paris Agreement.
Stefan Klebert (Photo: GEA)
“GEA is taking bold action to support the global transition to a net-zero economy. Our new climate strategy positions GEA as the leader in our peer group. We are pursuing the most comprehensive and ambitious climate strategy in the mechanical engineering industry,” says Stefan Klebert, CEO GEA Group AG. “We are incorporating our entire value chain into this effort, tackling both direct and indirect emissions. And by doing so, we are taking clear action in line with GEA’s purpose: ‘engineering for a better world’.”
By investing globally in Gold Standard-certified projects to generate clean energy from wind, sun, biomass and waste gases, GEA’s own operations are already climate-neutral since the beginning of 2021. Established by the World Wide Fund for Nature (WWF), the Gold Standard certifies climate protection projects that have highest possible positive climate impact. “Carbon offsets for the emissions that we cannot yet avoid is, of course, only the first step on our net-zero journey. That is why we are working to transform our business operations to effectively contribute to limiting global warming,” explains Klebert.
2030 interim targets submitted
In addition to GEA’s 2040 net-zero target, the company has submitted ambitious interim science-based targets across all relevant scopes. Compared to the baseline year 2019, GEA aims to:
Reduce GHG emissions from its own operations (Scopes 1 and 2) by 60 percent by 2030
Reduce GHG emissions from the customer use phase of its products (Scope 3) by 18 percent by 2030
Immediate actions to reduce Scope 1 and 2 emissions
To reduce its Scope 1 and 2 emissions, GEA is pursuing multiple initiatives. First, the company aims to gradually increase its share of renewable power to 100 percent within the next five years. To achieve this, GEA will make use of renewable energy certificates, extend its own green power generation and look into long-term power purchase agreements. Second, GEA will boost the energy efficiency of its global infrastructure with initiatives to modernize office buildings and production facilities, prioritizing the 29 most energy-intensive production sites covering 80 percent of total group wide energy consumption.
Third, over time and where feasible, GEA will green its global fleet of approximately 4,300 company cars. A green mobility policy introduced today stipulates that all new incentive cars for GEA managers in Germany will be 100 percent electric. The company will invest in wall boxes at German GEA sites to support the rollout. “We want to lead by example,” remarks CEO Klebert. “Our transition to a zero-emission fleet – starting with the cars for our management in Germany – shows we are taking clear and visible action.”
Reduction in Scope 3 emissions essential to achieving net-zero target
GEA’s innovative technologies have long played a decisive role in reducing GHG emissions in the various end customer industries it serves, foremost food, beverage and pharma. With the ever-advancing resource efficiency of its production and process technology, GEA enables customers to reach their own sustainability goals. Nevertheless, in direct comparison to GEA’s own GHG emissions, indirect emissions from suppliers and products sold – so-called Scope 3 – make up more than 95 percent of GEA’s overall GHG emissions.
The company’s climate strategy therefore focuses on identifying climate impact hotspots in GEA’s product portfolio and further boosting the energy efficiency of GEA products. GEA’s comprehensive portfolio – ranging from components and industrial machinery to complete processing lines and factories – will be thoroughly analyzed in the coming years. This level of transparency will enable the company to prioritize the climate roadmap and further develop sustainable customer solutions.
“Product innovation will be the key lever to reach our 18 percent reduction target for Scope 3 in 2030. It’s an ambitious goal, but I’m convinced we’ll achieve it; engineering excellence is GEA’s core strength,” comments Klebert. “For instance, we are already equipping customers such as smoothie-producer innocent with machinery that enables the carbon-free production of beverages. Going forward, we will employ such climate-smart solutions on an ever-increasing scale.” In addition to installing new technologies, GEA modernizes existing customer plants to reduce their climate impact as much as possible.
Sustainability as key pillar in GEA’s Factory of the Future
(Photo GEA)
Optimizing our manufacturing footprint, which includes reducing the environmental impact of our sites, is another important factor for achieving GEA’s climate and sustainability goals. GEA laid the cornerstone for a new, climate-neutral production facility in Koszalin, Poland, on May 21, 2021 – a concrete example of how GEA aims to decarbonize its infrastructure. The facility will produce its own energy by integrating photovoltaic panels on the roof and storing power in batteries which can be used to power fleet vehicles. In addition, a combined heat and power (CHP) system will be used to generate electricity and heat, which can be used to heat and cool the site. LED lighting, best-in-class building insulation and low emissivity glass are all part of the factory’s climate-neutral building concept.
Journey towards a comprehensive ESG strategy
GEA’s climate strategy is the first building block of a comprehensive Environment, Social and Governance (ESG) strategy at GEA. Beyond climate protection, this strategy will also take social and corporate governance aspects into account. It will reinforce the company’s commitment to United Nations Sustainable Development Goals (UN SDGs) and become a foundational element of ‘Mission 26’, GEA’s new corporate strategy that is currently under development. ‘Mission 26’ will be presented at GEA’s next Capital Markets Day in September 2021.
Chr. Hansen Holding A/S today released its 2025 Strategy with the ambition to create a differentiated bioscience company with focus on its microbial and fermentation technology platforms putting Food Cultures & Enzymes and Health & Nutrition at the center of its new strategy. During the strategy period which runs until the end of the financial year 2024/25, Chr. Hansen’s long-term financial ambition is to deliver mid- to high single-digit organic growth, averaged over the period. Furthermore, the Company plans to increase its underlying EBIT margin before special items, before portfolio changes and currency impacts, with efficiency gains and scalability benefits from operations, as well as synergies from recent acquisitions, to be partly reinvested into the business during the strategy period. Average growth in free cash flow before acquisitions and special items is expected to exceed the average absolute EBIT growth.
CEO Mauricio Graber says: “Chr. Hansen has undertaken a tremendous journey since its start as an ingredient supplier to the dairy industry, and I feel very proud to lead a company with such a strong purpose and so many exciting growth prospects. With the launch of our 2025 Strategy we are stepping up our game to unlock the next wave of value creation by advancing Chr. Hansen into a focused global bioscience player that specializes in fermentation technology and microbial solutions. With this focus we will be uniquely positioned and clearly stand out in our industry.”
“At Chr. Hansen, we will continue to pioneer microbial science to improve food and health, for a more sustainable future. Already today, more than 80 % of our revenue contribute to the United Nation’s Sustainable Development Goals, and we are committed to continuing to leverage the Power of Good Bacteria™ which is also reflected in our newly defined purpose: ‘Grow a better world. Naturally.’”
Underlying markets remain attractive
During its strategy process, Chr. Hansen has conducted a thorough review of industry dynamics, consumer trends and growth opportunities in its existing segments. Megatrends such as a growing world population, demographic shifts, increasing health awareness and a strong climate change agenda continue to support Chr. Hansen’s business model. Growth prospects in the Company’s underlying markets remain attractive.
2025 Strategy (‘where to play’)
Under its 2025 Strategy, Chr. Hansen has defined four strategic focus areas that set the framework for its future growth trajectory: REINVEST, LEVERAGE, EXTEND and REVIEW.
REINVEST in core platforms
Chr. Hansen has been the ingredient supplier of choice for the dairy industry for many decades and has also built a strong microbial business for animal feed, dietary supplements and infant formula over the last thirty years. During the strategy period the majority of the absolute growth will come from the core platforms. As such Chr. Hansen will continue to prioritize and invest in Food Cultures & Enzymes, Animal and Human Health. Innovative products, launched across all business areas, are expected in the strategy period, both in existing and new product categories, for example probiotic solutions for foods and pet food.
LEVERAGE the Microbial Platform to grow lighthouses and new areas
Chr. Hansen continues to see many attractive growth opportunities to leverage its technology platform to develop solutions for new applications and end markets. The Company remains committed to further develop its existing lighthouses Bioprotection, Plant Health and Bacthera, and is today launching a new lighthouse in Fermented Plant Bases, where Chr. Hansen sees itself uniquely positioned to gain a meaningful share in this fast-growing market.
“Each of the four lighthouses holds tremendous potential. We are breaking new ground, and I am truly excited about the journey that lies ahead of us when it comes to fighting food waste, shaping the future of food and contributing to sustainable farming and the development of pharmaceuticals based on bacteria,” says CEO Mauricio Graber.
Lighthouses at a glance:
Bioprotection: Special culture range that prevents spoilage, reduces food waste and increases safety of dairy and other foods. The long-term market opportunity is estimated to be around EUR 1 billion with an addressable market of around EUR 200 million in 2025
Fermented plant bases: Fermentation solutions for spoonable and drinkable fermented milk alternatives and fermented beverages. The long-term market opportunity is estimated to be more than EUR 100 million with an addressable market of less than EUR 100 million in 2025
Plant health: Crop protection solutions with a focus on bionematicides, biostimulants and biofungicides. The long-term market opportunity is estimated to be more than EUR 1 billion with an addressable market of around EUR 400 million in 2025
Bacthera: Joint venture with Lonza AG in contract manufacturing for live biotherapeutics. The long-term market opportunity is estimated to be more than EUR 1 billion with an addressable market of EUR 150-200 million in 2025 (only clinical trial market)
EXTEND Microbial Platform through M&A and R&D partnerships
During the strategy period Chr. Hansen intends to further strengthen its technology platform across its competencies, such as cultures and probiotics, dairy enzymes and value-added fermentation through acquisitions and the expansion of the R&D partner network. The recent acquisitions of HSO Health Care and UAS Laboratories are examples of this, and both offer attractive commercial, operational and R&D synergy opportunities.
REVIEW strategic options for non-microbial assets
Chr. Hansen’s Natural Colors division is the global market leader for natural colors. Whilst the division shares the Company’s overall purpose and stand-alone offers an attractive return profile, synergies with the Microbial Platform are limited. As already communicated on July 2, Chr. Hansen has therefore decided to initiate a strategic review of its Natural Colors division. The process is progressing well.
Implementation of 2025 Strategy (‘how to win’)
Chr. Hansen has defined five dimensions along which the Company is going to implement the strategy:
CUSTOMERS: Chr. Hansen will further broaden its customer base and expand its global reach to become a truly global bioscience company. The Company aims to increase its presence in emerging markets. Secondly, Chr. Hansen will continue to invest in application development, sales and marketing resources to positively influence end-market demand and advance its digital agenda to deliver best-in-class service to its customers
INNOVATION: Bringing new innovations with a sustainable impact to market remains a top strategic priority. As such Chr. Hansen will allocate around 75 % of the R&D spending during the strategy period towards new product development. Furthermore, the Company will intensify its efforts to bring products to market faster
OPERATIONS: Chr. Hansen continues to see ample room to realize further operational efficiencies in its production through process innovations and automation/digitization whilst driving scalability benefits through future capacity expansions. Capex spending as a percentage of sales is expected to decline over the period compared to 2018/19
PEOPLE: As Chr. Hansen grows as an organization it is important to safeguard the Company’s unique purpose and performance culture. Furthermore, the Company will continue to invest in talent management and is committed to driving diversity
PURPOSE: As part of its new strategy, Chr. Hansen will accelerate its sustainability ambition and commits to the Science Based Targets initiative to limit global temperature rise to 1.5 degrees by reducing its environmental footprint with investments into renewable energy, recyclable packaging and circular biowaste management.
New financial and non-financial ambitions until 2024/25
Chr. Hansen has an ambitious financial agenda and remains committed to delivering industry-leading profitable growth and a strong cash flow generation. From the base year of 2018/19, Chr. Hansen aims to deliver:
Mid- to high single-digit organic growth, averaged over the period
An increase in EBIT margin before special items, before portfolio changes and currency impacts. The margin improvement is expected to be based on efficiency gains and scalability benefits from operations as well as synergies from recent acquisitions, which will be partly reinvested into the business during the strategy period
An average growth in free cash flow before acquisitions and special items exceeding the average growth in absolute EBIT before acquisitions and special items
The financial ambition is based on constant currencies and does not take future acquisitions or divestments into account, even if future activities are likely. The financial ambition is also based on the current political and economic environment and projections, and any deterioration may impact the ambition negatively (please see next page for details on COVID-19).
Chr. Hansen has set the following sustainability and non-financial ambitions:
Products: More than 80 % of revenue from sustainable products that contribute to the United Nation’s Sustainable Development Goals 2, 3 and 12; 25 million hectares covered with natural solutions (Plant Health and silage inoculants); 200m people consuming Chr. Hansen’s probiotic strains; 2 million tons of yogurt waste reduced
Planet: As part of its commitment to limit global temperature rise to 1.5 degrees, Chr. Hansen aims for 100 % renewable energy, circular management of biowaste and recyclable key packaging materials
People: The Company aims to have introduced 100 % of its new employees to its culture model, have a 1:1 equal ratio between female employees and women in management, have a top 25 % score in its employee engagement survey and reach a lost-time incident frequency of below 1.5
Capital allocation priorities
Chr. Hansen’s capital allocation framework remains unchanged. Organic growth remains the number one priority followed by bolt-on acquisitions which the Company seeks proactively to strengthen its Microbial Platform, particularly in the dynamic and evolving Health & Nutrition markets. Thirdly, Chr. Hansen will maintain the policy of issuing an ordinary dividend of 40-60 % of net income . Finally any excess cash will be distributed as extraordinary dividends or share buy-backs.
Impact of COVID-19 on market outlooks
The global COVID-19 pandemic has changed consumption patterns and consumer choices and has put supply chains globally under pressure. As an essential part of the food supply chain and supplier to the health industry, Chr. Hansen did not see material impacts to its operations or business model from the pandemic. However, during a global recession, potentially lower protein consumption (especially in emerging markets) and delayed or reduced demand from customers may impact Chr. Hansen’s ability to drive sales. That said, the pandemic crisis also provides new opportunities, for example through increasing health awareness and interest in probiotics with immunity concepts.
Freshfel Europe supports the EU’s plans to revise its Trade Strategy, an essential move to ensure the EU is ready to tackle the growing challenges impacting fresh fruit and vegetables trade , particularly in the aftermath of the COVID-19 crisis. In particular, the sector urges the European Commission to enhance the assertiveness of its approach to trade policy, especially regarding tackling sanitary and phytosanitary (SPS) barriers, which are deeply impacting the ability of the sector to exploit its full potential to trade. This is necessary to ensure EU exports of fruit and vegetables revert current negative trends experienced since the Russian embargo (loss of 22% in their volume since 2014) and successfully diversify and gain access to new attractive markets despite the uncertain international trade environment. The new EU Trade Strategy should effectively assist key partners, particularly developing countries, to cope with EU legislation and standards to continue accessing the Single Market, ensuring year-round supply of affordable, varied fresh fruit and vegetables to EU citizens.
As outlined in Freshfel Europe’s response to the EU public consultation on a roadmap for an EU trade & investment policy review, the new strategy should seek to fully exploit the potential of existing multilateral and bilateral agreements with trade partners and, if needed, make use of more assertive tools on top of ‘soft’ engagement to ensure reciprocity in trade relations. Moreover, the new EU Trade Strategy should seek further SPS facilitations with trade partners to ensure faster, less burdensome fruit and vegetables access to third country markets, either via multilateral WTO and IPPC commitments, SPS Chapters in FTAs or other bilateral agreements, formal or informal. A reinforced internal coordination among EU services, Member States and the EU private sector would also help secure faster opening of third country markets for all EU Member States and fruit and vegetables categories. The sector expects that the prompt appointment of the Chief Trade Enforcement Officer will enable this work to be effectively implemented.
Freshfel Europe believes the revised EU Trade Strategy should contribute to the EU’s green and digital objectives. To ensure this, the EU should effectively assist trade partners to achieve environmental goals through so-called Green Alliances, as outlined in the Farm to Fork Strategy. Technical support should also be targeted to developing partners, particularly key suppliers in Africa and America, so they can cope with EU legislation to continue accessing the EU Market. Furthermore, the EU should translate its ambitions to become ‘fit for the digital age’ into concrete solutions that facilitate trade operations, implementing for instance electronic transmission of import and export certification, for which the sector and public authorities have shown its readiness during the COVID-19 pandemic.
The government’s Resources and Waste Strategy has been unveiled, setting out how ministers aim to change the way consumers deal with waste from the home to the workplace.
It includes the introduction of a deposit return scheme in 2023, subject to consultation early next year.
Gavin Partington, Director General at British Soft Drinks Association, said:
“The soft drinks industry supports the introduction of a GB-wide full deposit return scheme for all plastic and can beverage containers. We believe this is the best way to increase recycling levels and tackle litter.
“Reform of the current producer responsibility system is also necessary to create greater transparency and increased investment in UK recycling infrastructure.”
Coca-Cola European Partners unveiled its new GB sustainable packaging strategy – setting out an ambition for its GB business unit to work with local and national partners to recover all its packaging so that more is recycled and none ends up as litter.
At present, only 70 % of the cans1 and 57 %2 of the plastic bottles used each year are recycled, CCEP believes these figures should be higher. Through its new GB sustainable packaging strategy, the company sets out the key actions it will take, and the areas where it will look to work with others, to improve the recovery and recycling of drinks packaging, and to reduce littering in Great Britain.
The new strategy is focused on three key areas:
Continuing to innovate to ensure its packaging is as sustainable as possible
CCEP has built a strong track record of lightweighting, ensuring all its cans and bottles are 100 % recyclable, and using recycled materials. It now wants to build on its work, with plans to double the amount of recycled plastic in every one of its PET bottles over the next three years – from the current average of 25 % to 50 % by 2020. To achieve this ambitious target it will continue its long term partnership with Clean Tech, which operates Europe’s largest and most advanced plastic bottle reprocessing facility in Lincolnshire, supporting the circular economy in Great Britain and allowing recycled bottles to return to shop shelves as part of new packs in as little as six weeks.
Investing in consumer communication to promote recycling and encourage behaviour change
As part of the new strategy, Coca-Cola will use the power of its brands to inspire more consumers to recycle. Later this month, the company will launch a multi-million pound communications campaign designed to inspire more people to recycle. At the heart of the campaign is an advert called Love Story, which will break on TV at the end of July and run across TV, cinema and digital channels. The advert features two love struck plastic bottles who are parted and then reunited as they are disposed of properly, recovered and then recycled into new bottles. The campaign will reach 35 million Britons by the end of this year. The company will also be putting a new recycling message on bottles this year and promoting recycling to six million people at festivals and events.
Championing reform of the UK recycling system to ensure more packaging is recovered and recycled
The company will continue to work in partnership with others – including the Governments of Great Britain – to improve the current packaging recycling system. To support the growth of the circular economy in Great Britain, the company will champion well-designed new interventions that have the potential to increase packaging collection and recycling rates, including stronger recycling targets, deposit return schemes and extended producer responsibility.
In addition, as part of its commitment to support DEFRA’s new working group on voluntary and economic incentives to reduce littering, CCEP will seek to advance its own knowledge of how consumers are motivate by an incentive-based scheme by testing an on-the-go bottle collection and reward programme. This test will examine the behavioural impact of reward schemes and help inform any future national approaches to reducing litter and increasing collection and recycling rates. More details on these trials will be announced later this year.
