Dairy to be different
With the spotlight continuing to shine on the origin and make-up of food produce, Skånemejerier’s commitment to high-quality traceable dairy products keeps it out in front
Skånemejerier is Sweden’s leading dairy company, with a 15 per cent market share, and the fourth largest in the Nordic region, supplying both the retail and food service industries. Although the Swedish market makes up 75 per cent of the total business Skånemejerier also exports products to Finland and Denmark. From its three dairy facilities in Malmö, Lunnarp and Kristianstad the company produces a variety of dairy products such as milk, cheese, butter and yogurt, and is also recognised as Sweden’s biggest fruit juice producer. Making up 25 per cent of the company’s annual 300 million euro turnover, the juice division is focused around two individual brands – ProViva and Bravo.
Initially launched in 1994, ProViva is the world’s first probiotic fruit drink, containing the bacteria Lactobacillus plantarum 299v (LP 299v), which has been scientifically tested in humans with documented health benefits. Last year Skånemejerier sold a 51 per cent stake in the ProViva brand to Danone, a move which could see the product launched worldwide. Björn Sederblad, CEO of Skånemejerier comments: “When we first developed ProViva over 15 years ago probiotic drinks were a completely new concept and we were the first in the industry to build that market. Today there is a lot more competition within this sector, but ProViva remains a leading name with every consumer in Sweden drinking five litres a year of the product. Given our success within the Swedish juice sector, Danone are now looking to take the ProViva product to the wider international market.”
Certainly the market for products with additional health benefits has rocketed in recent years as consumers become increasingly conscious of their health and the foods they eat. This niche sector of ‘functional food’ – everyday products with specific health benefits – remains a primary focus for Skånemejerier, although as Björn explains, it is also keen to promote the benefits of dairy in general: “Ten years ago dairy products like milk and cream were not necessarily viewed as being good for you by consumers, however following detailed discussion in Sweden about the nature of saturated fats, today this is not the case. Increasingly dairy is seen as an important aspect of a healthy diet, and this is reflected in the growing consumption of these products across the Swedish market.”
Alongside this awareness of ingredients in food products, demand is also growing for locally produced goods as consumers place greater importance on knowing where their food comes from. Björn highlights how Skånemejerier is utilising technology as a platform to demonstrate its local approach: “Traceability of our products is something we have told customers they can rely on, so last year we launched an iPhone application and online facility to support this. Using this technology the consumer can put in the information on the milk packaging and find out which farms the milk comes from, alongside other details, such as the number of cows on the farm and the amount of milk produced annually. It also demonstrates our commitment to selling milk from local suppliers in each region, where for example products sold in Stockholm are produced from milk from farmers around Stockholm. This technology has been very well received on the Swedish market, with approximately 6000 consumers using it each month, which reflects the interest there is in traceability. We are now extending this into the Danish market by sourcing milk from the local Danish farmers, transporting it to our plants in Sweden for packaging and then back into Denmark to be sold. This trend for traceability of food ingredients is being embraced on a global scale and we are looking to be at the forefront of this in the Swedish market.”
Given the many industry firsts in its history, Skånemejerier is no stranger to innovation in its product range. In order to remain competitive and attractive to a wide spread of consumers, the company regularly updates its portfolio with new developments, such as the recently launched Bravo juice with pulp. “Later in the year we will also be introducing Bravo Fruit Gala, which is produced by Portuguese company So Natural,” describes Björn. “This is a new kind of chilled juice product, which contains nothing but fruit – no sugar, preservatives or anything else. It is produced using high pressure processing (HPP), which kills bacteria and offers a shelf life of 45 days whilst maintaining the taste, colour and vitamin content of the juice. This is a really attractive product and we anticipate it being a huge success in the Nordic market.”
The effect of these new products and general growth in consumption on capacity demand has prompted Skånemejerier to implement a 30 million euro investment programme across its dairies and fruit juice plants in order to improve its production efficiency. With market competitiveness and efficiency closely linked, Skånemejerier is utilising state-of-the-art technology to increase annual capacity from 150 million kg to 250 million kg in its largest factory in Malmö. The company is also looking to grow its cheese-making facility in Kristianstad from 15 million kg to 25 million kg each year.
Although Skånemejerier has some ambitious growth plans for the years ahead, Björn concludes with how he is confident of the company’s ability to meet these: “Our aspiration is to grow the company by 100 per cent over the next few years to a targeted turnover of 600 million euros in 2013. To facilitate this we have brought several smaller companies, which offer products that we don’t currently have the resources to produce. This includes the Lindahl Dairy, which is a Swedish company specialising in the production of Turkish and Greek yogurt products. I believe that these wider capabilities, alongside our growth in each of our market areas, which has resulted in a 50 million kg increase in our milk consumption this year, will enables us to achieve our growth target. At present our biggest competitor Arla Foods occupies 55 per cent of the Swedish market, but we believe that the consumer is looking for an alternative to this major supplier. With our ever-growing product range and focus on health and traceability, we believe that market conditions will enable us to gain up to 25 per cent share of the Swedish market.”