Natural, health trend boosts 3Q for Chr Hansen

Related tags Chr hansen Food processing Nutrition

Growing demand for natural colours and the increasing popularity of
probiotic cultures lifted third quarter sales at Danish ingredients
firm Chr Hansen.

The company that makes cultures for cheese and yoghurt makers worldwide saw sales for the ingredients part of the group rise by 3.5 per cent from DKK848m (€114m) in 2002/2003 for the third quarter to DKK878m (€118m) for the equivalent period this year.

But operating profit for the period in the ingredients sector slipped from DKK102m to DKK100m for the third quarter this year.

Combined sales, from the firm that supplies a broad spectrum of the food industry from meat to confectionery, rose by over 6 per cent for Europe, South America and Asia combined, climbing to DKK1.62bn from DKK1.52bn last year.

"Sales of cultures continued the positive trend in Europe,"​ said the number one cultures maker.

As the functional food trend continues to soar, food and beverage manufacturers are increasingly on the hunt for natural colours - fuelling growth in the colouring foodstuffs market and outstripping the base line growth of the European colours market in general valued at €195 million in 2001.

In the three quarter results reported today the €2bn firm notes the benefit of this growing trend. "The demand for natural colours for the beverage, confectionery and marmalade industries is also on the increase based on increasing consumer demand this type of solution,"​ writes Chr Hansen.

A trend that seems set to continue. According to former Frost and Sullivan analyst Lyndsey Greig the European colouring market is expected to experience a compound annual growth rate of only 1 per cent for the period 2001-2008.

"In contrast, the colouring foodstuffs market is currently experiencing growth of an estimated 10 per cent to 15 per cent, driven by consumer interest in natural products,"​ commented Greig.

In addition to the influence of the functional food trend, the shift from synthetic colours to natural equivalents is underpinned by consumer suspicions that all E-numbers are unhealthy.

"Colouring foodstuffs include fruit and vegetable juices, concentrates and dried, powdered extracts. They do not contain any carriers or additives, and may be listed as ingredients, rather than as food additives,"​ added Greig.

Colouring foodstuffs include fruit and vegetable juices, concentrates and dried, powdered extracts. They do not contain any carriers or additives, and may be listed as ingredients, rather than as food additives.

While sales in the natural colours area were steady across South America and Europe, Chr Hansen reported stiff competition in the US from both synthetic and natural colours makers.

The Danish firm has seen growth in probiotics, an area currently enjoying the gains from the health concern boom, particularly in the dairy sector.

"New probiotic cultures have been developed for a large number of dairies,"​ said Chr Hansen​, adding that sales of cultures for the cheese and meat industries are also increasing.

Profit for the first nine months for the group as a whole - ingredients and allergy vaccine sectors combined - came in at DKK150m, up from DKK 134m for 2002/2003.

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