FrieslandCampina ups nutritional criteria-meeting consumer products to 70%
In its 2019 annual report, FrieslandCampina highlights how its “higher profit and growth for branded products in a difficult market” is the outcome of its continuing efforts to help increase sustainability throughout the dairy chain.
In a bid to “lead with sustainability and play its social role as a leading dairy producer”, FrieslandCampina has focused on increasing the level of sustainability in its portfolios through providing healthy food. In 2019, the percentage of consumer products that meets the company's nutritional criteria had increased to 70%, up from 66% in 2018.
Transforming nutrition through sustainability
In 2018, FrieslandCampina began what they hailed as their “transformation” to create a healthy food portfolio and to increase the sustainability of the dairy chain. Stating that progress is on schedule in its 2019 annual report, the company also strives to produce “a more effective organization, faster innovations and higher investments in consumer brands”, as part of its company-wide changes.
“The transformation of the company, which we started in 2018, has enabled us to work in a more market-oriented manner and to deploy available resources more effectively,” explained Hein Schumacher, CEO of FrieslandCampina.
Commenting on the results of its 2019 annual report, Schumacher emphasized the difficulties experienced: “This result must be seen in the context of a challenging market, geopolitical developments and the headwind we experienced in the second half of the year due to the unrest in Hong Kong.”
Annual report summary
The company reports a 3.1% increase in its turnover of branded products, with consumer dairy products increasing by 5.4% and cheese brands by 8.8%. However, FrieslandCampina’s overall turnover fell by a total of 2.2% to €11.3 billion following a 3.4% drop in milk supply.
The company’s profit did increase by 36.9% to €278 million, largely due to “one-off income and better-operating results” within the nutrition name’s consumer dairy and dairy essential product portfolios.
A fall in the number of affiliated dairy farms and the freeze of non-profitable private label products is attributed to the reduced milk supply. While the consumer dairy and ingredient business arms grew in revenue, the turnover of the specialized nutrition group decreased.
Although the turnover of dairy essentials also dropped, FrieslandCampina states that it sold a higher number of products with added value, such as cheese, and fewer basic products, like milk powder and butter, to improve its revenue mix.
Adopting global nutritional standards
Developing its global nutritional standards, the company derived guidelines and recommendations from the nutritional criteria of healthy food choice promoters, Choices International Foundation. Applying these in product development, it tests all dairy items against the standards.
FrieslandCampina’s standards provide an “overview that indicates which nutritional requirements – for example, for salt, sugar and fat – must be met to create a healthier product portfolio”, highlighted Petra Dekker, Corporate Manager Nutrition & Health.
Describing balancing competing consumer nutritional needs as a “tense marriage”, Dekker stated: “It is difficult to reconcile these interests concerning health on the one hand, and tasty and functional on the other”.
“In 2015, we started looking at the extent to which FrieslandCampina’s total product portfolio meets our global nutritional standards,” Dekker revealed when commenting on meeting the company’s nutritional goals. “In 2015, this was 57% and by the end of 2019, we achieved 70%, which actually was our objective for 2020.”
The company’s nutrition and health manager noted that achieving 100% is impossible as certain provisions state that some products must contain a certain quantity of salt or sugar. “But of course we are aiming for the maximum, and we will determine our objectives for 2025 on the basis of the latest scientific insights and possibilities,” Dekker relayed.
Balancing daily nutrition with indulgence
Another key objective of FrieslandCampina’s strategy is to balance products that are designed to be bought as nourishing products for daily consumption with those that are intended as indulgence products for occasional use.
The company’s yearly target is to reach a total of 60% nourishing food items and a maximum of 30% indulgence products, based on sales volume. In 2019, 79% of the dairy name’s range sat in the daily use nourishing products category, a 1% drop from 2018.
Retain, reduce or enrich to create nutritional quality
The company also uses regional criteria to determine, if necessary, whether its dairy products need to be enriched with vitamins and minerals to meet the needs of specific markets. It uses its global nutritional standards to guide product reformulation. Depending on the specific product, FrieslandCampina will either determine that the core objective must be to retain, reduce or enrich nutritional quality in the product.
For example, as milk naturally contains important nutrients, the company highlights that it “wants to retain” these nutrients “as much as possible”. As a result, it has set criteria detailing the minimum amounts of protein and calcium the milk product should contain. FrieslandCampina deems these nutrients important indicators of other valuable and retention-worthy nutrients in milk products.
The nutritious ingredient content and value of products within FrieslandCampina’s portfolio may be enhanced by reducing the content of specific nutrients. Reducing nutrients is a key way the company aims to contribute towards efforts to overcome the prevalence of malnutrition and consequential food-related diseases.
Enriching dairy products by increasing the intake of specific nutrients may be vital for specific regions and consumer groups. Where the potential or existing prevalence of deficiencies may warrant specific nutrient consideration, added vitamins such as B12, A and D may be used in the creation or reformulation of products to increase their nutritional value.