Raisio, the Finnish food company behind brands such as Benecol and Elovena, has decided to abandon its ambitious growth and profitability goals for 2025, following a year of flat sales amid the Covid-19 pandemic and increased competition from private labels.
Raisio’s sales remained unchanged in 2023
Raisio reported its financial results for the year 2023 on February 13, 2024. The company’s net sales were €220 million, a slight decrease of 0.6% from 2022. The company’s EBIT increased by 6.8% to €19.1 million, but fell by 47.6% in the fourth quarter to €3.1 million.
The company attributed its lackluster performance to the challenging market conditions caused by the Covid-19 pandemic, which affected consumer demand and behavior, as well as the increased presence of private label products in some of its key categories, such as cholesterol-lowering spreads and oat products.
Raisio’s CEO, Pekka Kuusniemi, said: “The year 2023 was exceptional in many ways. The Covid-19 pandemic had a significant impact on consumer behavior and demand, as well as on our own operations. We also faced increased competition from private labels, especially in the UK and Finland.”
Raisio revises its strategy and targets for 2025
Raisio had set its 2022-2025 strategy and targets in November 2022, aiming to achieve annual net sales growth of 5-7%, comparable EBIT margin of 15%, and return on capital employed of 20%. However, the company admitted that these targets were unrealistic and unattainable in the current market situation.
Therefore, Raisio announced that it would revise its strategy and targets for 2025, taking into account the changed operating environment and consumer trends. The company said it would focus on four strategic priorities: strengthening its brands, expanding its geographical presence, developing its product portfolio, and improving its operational efficiency.
Kuusniemi said: “We have decided to update our strategy and targets for 2025, as the previous ones were set in a very different market situation and proved to be unrealistic. We will continue to promote the key priorities of our strategy in a systematic and sustained manner, but with more realistic and achievable goals.”
Raisio faces challenges and opportunities in 2024
Raisio expects the market conditions to remain uncertain and volatile in 2024, due to the ongoing Covid-19 pandemic and its impacts on consumer behavior, demand, and purchasing power. The company also anticipates that the competition from private labels will continue to be strong, especially in the UK and Finland, where Raisio’s main brands, Benecol and Elovena, operate.
However, Raisio also sees opportunities for growth and profitability in 2024, by leveraging its strengths and capabilities in healthy and sustainable food products. The company plans to launch new products and innovations, such as Benecol plant stanol ester capsules, Elovena Muru oat mince, and Raisioagro’s fish feed for organic farming. The company also aims to expand its presence in new markets, such as China, where it recently signed a distribution agreement for Benecol products.
Kuusniemi said: “We are confident that we have a solid foundation and a clear direction for the future. We have strong and well-known brands, high-quality and innovative products, and a committed and skilled team. We are determined to create value for our customers, consumers, shareholders, and society, by offering healthy and sustainable food solutions.”