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Benecol

Benecol business focuses on the licensing of Benecol brand and plant stanol ester to its partners around the world. The aim is to expand into new market areas, particularly in Asia and South America. Plant stanol ester, a Benecol product ingredient, is Raisio's top innovation and millions of people around the world use Benecol products daily.

Raisio produces plant stanol ester – a unique ingredient used in Benecol products – and delivers it to the partners. They add the ingredient to the foods and dietary supplements sold under the Benecol brand. Our constantly evolving service concept is available to the Benecol partners. The concept includes, for example, best practices in marketing to consumers and health-care professionals as well as product development, clinical studies and regulation issues.

Year 2013 in brief

  • Raisio sold its US-based Eastport production facility and streamlined the supply chain of plant stanol ester.
  • Raisio launched Benecol products in Hong Kong in September. In Hong Kong, we have a new business model in use; Raisio itself and a local distributor are both responsible for operations in the new market.
  • Raisio's long-term partner Kalbe International launched Benecol products in the Philippines in October.
  • Sales in Benecol products showed good growth in Indonesia, Kalbe International's first market area of Benecol products.
  • In Poland, sales of Benecol margarines were transferred back to Raisio in the end of 2012.
  • Market conditions remained challenging in a few European markets due to, for example, increased market share of private label products and intensified price competition. Raisio's biggest partner lost market share in the largest market of Benecol products due to the business changes carried out. This also affects Raisio's operations.

Operating environment

Sales of cholesterol-lowering functional foods at consumer price total around one billion euros a year. Benecol products account for about one-fifth of the total market of cholesterol-lowering functional foods. Europe is clearly the largest market area, but the fastest sales growth is seen in the new markets of South America and Asia.

Benecol is the original expert in cholesterol lowering

Economic difficulties in Europe still affect consumer buying behaviour and the growth in private label sales further intensified competition. There are still significant differences between the countries in the sales development of Benecol products. Senior consumers form a target group that already now strongly affect the demand. This group will be increasingly important in the future. Globally, population aging, growing cholesterol problem and increased purchasing power especially in the emerging markets are factors expected to increase the demand for cholesterol-lowering functional foods. Pharmaceutical companies are also increasingly developing products in the segment of functional products.

Benecol partners' activity in marketing and advertising is usually resulted in good sales development in these markets. For example in Finland, Benecol product sale was supported with several TV campaigns and the successful launch of a new product increased sales of the whole product group.

In 2013

Benecol product sales remained fairly stable although in some markets consumers started using more affordable private label products instead of branded products. Raisio's major partner carried out changes in its operations and lost market share in the largest Benecol product market. In addition, intense price competition in some countries, such as Greece and Spain, decreased sales of Benecol products. The practice has shown that if the partner regularly invests in consumer advertising and marketing, sales almost invariably increase.

Benecol brand has been selected, for two consecutive years, as Finland's most trusted brand in the category of functional foods in the survey of Readers' Digest magazine. Furthermore, Benecol Buttery spread was awarded a Product of the Year award in the UK at the beginning of 2014.

New markets is Asia

Raisio's Benecol partner Kalbe International launched Benecol smoothies in the Philippines in the autumn 2013. Kalbe International is Raisio's long-term partner that launched Benecol products on the Indonesian market in 2008. During 2013, Kalbe's sales growth in Benecol products continued strong.

The Philippines are the latest market of Benecol products

In the Philippines, Benecol products are sold in over 300 retail stores and the aim is to expand the distribution during 2014. Benecol products have been positively received by Philippine consumers and Kalbe is expecting a considerable sales growth in 2014. The launch of Benecol products includes an extensive marketing campaign towards consumers and healthcare professionals.

Hong Kong

In Hong Kong, the launch of Benecol yogurt drinks started in September. Store coverage is being built and the largest marketing campaigns related to the launch are scheduled to take place in early 2014.

In Hong Kong, Raisio uses a new alternative business model as Raisio itself and the local Benecol product distributor are together responsible for business operations and their development. The local distributor is responsible for sales while Raisio is in charge of marketing towards consumers and healthcare professionals. At the end of 2014, we will evaluate the success of the new model.

The launch of Benecol products in Hong Kong is part of Raisio's long-term efforts to enter new markets in the BRIC countries.