Since 1891, Fazer has grown along with the changing lifestyles of the times which offer the company new opportunities to create successful product and brand experiences for consumers’ everyday moments. Fazer aims to offer products, services and brands that the majority of people can relate to and value, both today and tomorrow. Guided by the Group’s strong insight into consumers’ preference for brands that respect their individuality and values, Fazer’s mission is to create taste sensations.
The road ahead
To secure Fazer’s competitiveness and future success, the company will create value and drive profit to grow faster than net sales. As a value-generating company, Fazer can achieve profitable growth for many years to come. This means increasing efficiency and continuing to invest in and develop the company’s existing businesses. Fazer may also have good opportunities to grow beyond the current business portfolio, especially into areas that are close to and include synergies with the current businesses. The Group’s ambition is also to participate in industry restructuring, to add value. Fazer considers both organic growth and acquisitions as means to grow its business.
Fazer’s businesses must be in best-in-class condition to make expansion and development possible. Fazer also aims to be relatively less dependent on the Finnish market by increasing its activities outside Finland in all businesses.
The Group’s overall target is profitable growth, and the opportunities to achieve this are clearly visible. The majority of these arise from improving profitability. In terms of performance and efficiency, Fazer’s future success will depend on competent and committed people and the company is implementing a high performance culture to drive Fazer to perform to its potential. Success will be about having a shared passion for meeting an inspiring vision. Everyone will need the motivation to achieve individual goals that are explicitly aligned to a larger goal.
To that end, high performance is about being the best you can be in your own role, and every employee should go home every day both satisfied and proud of what they have achieved. This requires consistent and focused leadership and is being implemented with ambitious execution.
The new economic reality
The economic recovery in Finland and other home markets for Fazer continues to prove sluggish, yet the retail sector is always under pressure to deliver stronger results. Consumers are consequently adjusting to this ‘new normal’ economic reality as a longer prospect than previously anticipated. During the last few years, retail-owned private labels have become household brands, providing a broad range of substitutes. This means more active competition for Fazer than ever before.
Furthermore, raw material costs are likely to fluctuate sharply in the coming years and unit prices are expected to increase with time. The cost of waste handling will also increase in the future, as will the unit cost of energy.
In terms of the political and regulatory environment, the autumn 2015 decision by the Finnish government to withdraw the excise duty on confectionery, to bring equality back to the market, is a positive decision for Fazer. The decision made regarding excise duty consequently normalises the competitive status of Finnish companies in comparison to foreign competitors. That said, the use of sugar in products will continue to gain further visibility in the public arena as a public health concern and Fazer needs to both highlight and inform the public with regard to this topic.
The current geopolitical and economic situation is also unstable and this is likely to continue in the future. There is also increasing public consciousness of the need for healthy, natural, responsibly produced and locally sourced products. The demand for ethical and sustainable products and services has expanded outwards into mainstream consumption, and provides another area in which Fazer must develop even further. Furthermore, while considerable progress has been made to date, there must be a push for greater transparency within the value chains where Fazer operates and control will increase in importance in the future.
The political situation in regard to Russia is another key topic for Fazer and its progress, and its effects are being monitored closely. The company has enjoyed success in Russia. Fazer’s long-term plan is to continue investing in and developing its operations in Russia.
Fazer is built on strong brands and continually develops them to create further growth. During 2014 and 2015, the Fazer brand strategy was updated and the following targets were set: gain growth across all businesses using the Fazer brand; further increase the presence and visibility of the Fazer brand; demonstrate to both customers and consumers alike the value-added benefits of the Fazer brand; and finally, prioritise the Fazer brand in terms of innovations, investment and marketing.
The implementation of the brand strategy is ongoing at the business and corporate levels and will be increasingly visible in Fazer’s products and presence during 2016 and beyond.
New Visitor Centre
One notable example of the enhanced brand strategy is Fazer’s new visitor Centre, which will be opened in September 2016 as part of the Group’s 125th anniversary. The company aims to provide an inspirational and educational brand experience that leads to a life-long relationship with Fazer.
The new visitor Centre is designed to be a state-of-the-art platform showcasing the authenticity and heritage of Fazer and offering continuous live interaction with consumers. Furthermore, the centre will allow for the possibility of increasing the number of visitors Fazer can host to triple from current levels.
Corporate responsibility and employee safety remain an integrated part of the company’s future strategy, operations and identity. Five strategic areas form the structure of Fazer’s corporate responsibility programme, covering all of the Group’s activities.
Adapting and developing in order to grow
Fazer will respond to the changing business environment in a number of ways. One important factor is the increasing trend towards greater health and well-being. Examples of this relate to a concept that incorporates more greens in portions in Fazer Food Services, Fazer Alku porridge in Finland, bread with root vegetables in Sweden and Finland and "Health Energy" bread in Russia.
Fazer also continued the development of new products and concepts for 2016, including liquorice and the Fazer Bakers Market, amongst others.
Snacking is another important area of development to take into account. This between-meals eating is a major growth trend and will have an impact across all of Fazer’s businesses, while the trend towards decreasing household sizes will further reinforce the need to adapt.
From a growth and development perspective, Fazer sees digitalisation as an enabler of new opportunities. Fazer has made a strategic choice to use digitalisation to build relationships with both consumers and retail.
Each business plays its part
In its updated strategy, Fazer takes close consideration of relevant shifts in consumer behaviour and the current economic landscape.
Fazer Bakery will develop a strong consumer-focused offering and sell solutions to its partners, focusing on fresh and frozen products and grow into a category leader in Fazer’s home markets. Furthermore, Fazer Bakery will increasingly help its partners in the bakery category to grow also.
Snacking is a growing trend and represents an important future growth opportunity for Fazer Confectionery. In addition, the confectionery portfolio will be optimised. The presence in Fazer’s core market of Finland will be strengthened and the business in Sweden and in Russia will be further developed. Fazer Confectionery will also optimise its supply chain and strengthen strategic partnerships with its key customers.
Fazer Food Services will take clear leadership in business and industries sectors by driving the development of the contract catering industry and its solutions and, at the same time, focus on growing in all sectors with sector-specific solutions. The public sector is seen as providing especially interesting growth opportunities. Fazer Food Services will focus on operational efficiency to create value for its clients and on developing and empowering the 6,000 employees who make a difference in the restaurants, every day. Occupational health and safety standards, as well as raw material sourcing and management will also be further strengthened throughout 2016 and beyond.
Leveraging on its market position, Fazer Mill & Mixes will build growth in solutions by entering the applications market for oat derivatives and increasing volumes in oat milling. Fazer Cafés will focus on taking its concept further, reinforce Fazer’s bond with consumers, and serve as a flagship for Fazer’s entire offering.
Fazer’s vision is "We exceed your expectations." It can be read as a strong statement of both Fazer's passion and ambition and is directed towards all of the company’s stakeholders, whether they are consumers, customers or Fazer’s own employees. It also represents both a guiding principle and company ethos, and provides a distillation of Fazer’s aims and desires, encapsulated in four words. It drives both Fazer's present and its future
The Fazer City infographic guides you through Fazer Group's strategy.
It is a guided tour through Fazer’s business landscape, so it begins with the road that starts top left of the infographic.
The first stop is the heritage, the historical benchmarks that still guide present-day Fazer.
Next, carefully considering the Group’s values and ethical principles, a pause must be made to once again reinforce Fazer’s mission which is to create taste sensations.
The journey then continues and explores the local and international influences that inspire Fazer to adapt and to provide inspiration to the modern consumer.
The next port of call is a timely reminder of Fazer’s three strategic initiatives: operational excellence, consumer innovation and business strategies.
Approaching the journey’s end, the five strategic pillars provide the underlying foundations that always drive the Fazer Group forward.
The grand tour has reached its destination: the final creation of the Fazer experience. Enjoy!