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Board of Director's report 2021

Fazer is an international family-owned FMCG company, offering bakery, confectionery, plant-based, on-the-go products and café services in the Nordics, Baltics, Russia and more than 40 other countries. Fazer is also a major player in the Nordic milling market, and a growing player in food technology. The Group has three business areas - Fazer Bakery, Fazer Confectionery and Fazer Lifestyle Foods, as well as common operations


Fazer is an international family-owned FMCG company, offering bakery, confectionery, plant-based, on-the-go products and café services in the Nordics, Baltics, Russia and more than 40 other countries. Fazer is also a major player in the Nordic milling market, and a growing player in food technology. The Group has three business areas - Fazer Bakery, Fazer Confectionery and Fazer Lifestyle Foods, as well as common operations.

Fazer sells bakery products to more than 20 countries. In Finland, the company’s bakeries are located in Vantaa, Lahti and Lappeenranta. Fazer also has 120 (end of 2021) shop-in-shop bakeries in grocery stores. The shop-in-shop bakery concept has also been extended to the Baltic countries and Fazer currently has 10 shop-in-shop bakeries in Estonia. The Baltic bakeries are located in Ogre in Latvia and Kaunas in Lithuania. In Sweden, Fazer has three bakeries in Umeå, Eskilstuna and Lidköping. In Russia, Fazer focuses on the country's main markets in St Petersburg and Moscow. The Smolenskaya, Murinskaya and Neva bakeries are located in St Petersburg and the Zvezdnaya bakery in Moscow.

Fazer's confectionery business consists of confectionery, bisquit and crisps, Fazer Cafés, Gateau bakery shops and Travel Retail. Fazer's confectionery production is located in Vantaa and Lappeenranta. The business area sells its products to more than 40 countries through its extensive customer network and consumer channels.

Founded in 2017, Fazer Lifestyle Foods' product range includes plant-based snacks and drinks made from oats, as well as Froosh smoothies. Fazer Mills, located in Lahti, Finland and Lidköping, Sweden, sell their products primarily to B2B customers. Non-dairy products are manufactured at the Koria factory in Finland.

Changes to the business model in 2021

Fazer continued to actively develop the company throughout the year. In the spring, Fazer Bakery Sweden introduced a new operating model, including a resale and distribution agreement with Polfärskt and the discontinuation of Fazer's own field sales and distribution organisation. In September the Lund bakery was closed.

During the year, a new operating model was introduced at Fazer Lifestyle Foods, comprising five independent business units with responsibility for all aspects of operations. In addition, programmes were implemented to develop key areas. A new business unit, Fazer Foodtech, was also established to accelerate Fazer's innovation programme and strengthen Fazer's position as an innovation company. The market for plant-based products grew in Finland and consumer choices continued to shift from milk to plant-based beverage options. Demand for plant-based products was strong and clearly exceeded Fazer's delivery capacity during the period. To accelerate organic growth, Fazer invested in increasing the capacity of plant-based products and improving the efficiency of operations at the Koria plant. In the autumn, the expansions of Fazer’s oat mills in Sweden and Finland were opened. This doubled Fazer's oat milling capacity. In December,  Fazer announced an agreement to acquire Trensums Food, a Swedish leading producer of plant-based drinks. The ramp up of operations in Fazer’s state-of-the-art xylitol plant in Lahti started in the autumn. All these measures significantly strengthened Fazer Lifestyle Foods' position in the fast-growing global oat market in line with Fazer's oat strategy.

After the end of the financial year, Fazer announced plans to invest in a new confectionery factory in Finland. If these plans materialise, the new factory would replace the existing confectionery factories in Vantaa and Lappeenranta. The change would take effect in 2025 at the earliest, with a possible construction decision and a decision on the location of the new factory to be taken in 2022.


Fazer is financially strong and has a clear strategy for the future. Future growth is sought both organically and through M&A opportunities. To drive top-line growth and profitability, Fazer focuses on six strategic focus areas:

  1. building an even stronger position as the number one FMCG brand in Finland
  2. accelerating growth through innovations, on-trend categories and foodtech
  3. developing leading positions in Northern Europe
  4. excelling in ways of working to become the industry leader in profitability
  5. developing food as a solution for a more sustainable planet and business
  6. developing the culture and driving critical capabilities to enable continuous success

Strategy implementation in 2021

A new operating model was introduced in Fazer Bakery Sweden, including a re-seller and co-distribution agreement with bakery sales company Polfärskt, and reducing the number of bakeries from four to three. The new operating model increases Fazer’s agility and service levels for customers and builds a more sustainable and environmentally friendly way of operating the bakery business.

A new business structure was established in Fazer Lifestyle Foods, including five Business Units with end-to-end responsibility to better reflect and answer to customer and consumer demands. One of the new Business Units is Fazer Foodtech, which will strongly fuel Fazer’s plant-based consumer offering, making it pivotal for further strategic development. Foodtech will play an important role in Fazer’s transformation into a modern and innovative food company, guiding the way in the evolving food industry.

Fazer invested in the manufacturing of oat products in Vantaa, by building a new bakery production line for portion bread which uses state-of-the-art technology and renewing a production line at its chocolate factory to produce oat-based Fazer Oat Choco products. The new production lines will start during 2022.

Fazer’s milling capacity was expanded both in Lahti in Finland and in Lidköping in Sweden and the ramp up of the company’s state-of-the-art xylitol factory in Lahti started.

Fazer strengthened its position in gluten-free bakeries through the strong performance of the gluten-free portfolio and the introduction of a dozen gluten-free novelties to the market.

The expansion of Fazer’s shop-in-shop bakery network in Finland and the Baltics continued. At the end of December Fazer Bakery had 130 shop-in-shops in total.

The expansion of Fazer’s retail network continued by opening five new Fazer Cafés in Finland and Gateau bakery shops in Finland and Sweden.

Fazer signed an agreement to acquire Trensums Food AB, a Swedish market-leading producer of plant-based drinks, with a strategic focus on oat drinks.

The company excelled in its ways of working to become the industry leader in profitability, through several on-going transformation programmes and efficiency improvement activities.

Continued focus on Fazer’s brand promise Northern Magic. Made Real. and strengthening the Fazer consumer brand.

The company focused strongly on ESG by, among others, broadening its sustainability scope and defining its Sustainability Ambitions, setting Science-Based Targets and defining related emission reduction roadmaps for all Business Areas, redefining the Group’s ESG governance structure, renewing specific raw material commitments, and working with suppliers regarding the Group’s updated Supplier Code of Conduct.


The year 2021 in brief

In 2021, Fazer, celebrating its 130th anniversary during the year, continued its solid performance. The year was once again characterized by the COVID-19 pandemic and its impacts on the global economy. The company continued to prioritise its employees’ health and safety, as regulations and restrictions on travel and movement influenced ways of working, and business continuity was secured. During the year Fazer was challenged not only by the continued pandemic, but also by the rising costs and availability for raw materials, packaging materials and logistics. Increasing wages and energy costs also affected the business. While Fazer was not totally unaffected by the crisis, its proactive mitigation actions, strong brand and beloved products combined with bold innovations clearly supported the resilience of the business. As a result, Fazer Group’s net sales grew but operating profit decreased compared to the previous year.

Net sales and profitability

Fazer Group’s net sales increased by 4% compared to the previous year and totalled EUR 1,139.8 million (1,101.2). Fazer Bakery’s net sales totalled EUR 553.9 million (548.0), Fazer Confectionery’s EUR 433.5 million (400.1) and Fazer Lifestyle Foods’ EUR 179.5 million (177.3).

Net sales by business, MEUR





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In 2021, Fazer Bakery's stable development continued, and net sales totalled EUR 553.9 million (548.0). The active development of the Bakery business continued during the year and a new operating model in Fazer Bakery Sweden, including a distribution agreement with Polfärskt, was introduced. The Bakery in Lund was closed in September. The new model has been successful, and positive results can already be seen in terms of improved profitability, customer service and reduced environmental footprint. In Russia, demand was strong, especially in bake-off. The Russian business was, however, particularly challenged by the increases in raw material prices as well as the limited availability of production personnel. Fazer Bakery Finland had a very successful year with strong performance: 17 new shop-in-shop bakeries were opened, bringing their number to a total of 120. Fazer Bakery shop-in-shops already employ a total of 700 people in Finland. Fazer’s retail customers’ interest in the concept remains high and the expansion of the bakery network is expected to continue. The successful bakery shop-in-shop concept has also been brought to Estonia, where there are currently 10 shop-in-shop bakeries, five of which opened in 2021.

Fazer Confectionery performed particularly well during the year and net sales increased by 8% to EUR 433.5 million (400.1), with all time high sales in the last quarter of the year. The commercial performance was strong, with excellent growth in e.g., countlines, gifts and seasonal. Although the volatility in the Fazer Retail business, caused by continuously changing restrictions, continued throughout the year, a partial recovery from 2020 could be seen. The Travel Retail business also started to recover from the very low numbers in 2020 but remained clearly at a lower-than-normal level.

Fazer Lifestyle Foods’ net sales were stable at the previous year’s level and totalled EUR 179.5 million (177.3). The development of the business continued, and the business was reorganised into five business units to bring out the full potential in terms of top line growth and efficiency. In the autumn, the inauguration of the company’s new oat mills in Sweden and Finland took place. Through the expansion Fazer’s oat milling capacity was doubled in both markets. The ramp up of operations in the new xylitol factory was also started.

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Other countries




Net sales, total





Fazer Group’s 2021 operating profit totalled EUR 39.9 million (51.9), representing 3.5% (4.7%) of net sales.

All businesses were burdened by increasing raw material and packaging material prices, energy, and transportation costs as well as salary inflation.





Operating profit, MEUR




Operating profit, %




Return on equity, %




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Net financial items amounted to EUR 5.6 million (-10.1). The significant improvement of the financial items was mainly attributable to exchange rate differences. Profit before taxes increased to EUR 45.6 million (41.8) and the result for the period totalled EUR 32.0 million (440.4 million, including a gain of 414.3 million from the sale of Fazer Food Services in January 2020 as well as the Fazer Food Services’ result for the period of January 2020).

Financial position and cash flow

Fazer Group’s cash flow from operating activities amounted to EUR 77.5 million (152.4). The decrease was mainly due to working capital development. Cash and cash equivalents amounted to EUR 226.5 million (345.6). Interest-bearing net debt totalled -95.2 million (-213.3) and gearing was -10.9% (-22.8%). At the end of December, the consolidated balance sheet amounted to EUR 1,278.2 million (1,322.8). The Group’s equity ratio was 68.3% (70.7%).

Capital expenditure

Capital expenditure amounted to EUR 82.4 million (104.1), excluding investments in financial assets. The majority of the large investments were done in Fazer Lifestyle Foods and related to the new xylitol factory in Lahti, the oat mill expansions in Finland and Sweden and in the new non-dairy production equipment in Koria. Other important investments included new production equipment and upgrades to the existing machinery in Fazer Bakery and Fazer Confectionery.

Depreciation, amortization, and impairment amounted to EUR 64.7 million (65.5).


At the end of December 2021, Fazer had 8,049 employees (8,496). Fazer Bakery employed 5,170 (5,880), Fazer Confectionery 2,044 (1,904), Fazer Lifestyle Foods 551 (428) and Common Operations 284 (284). The decrease in the number of employees in Fazer Bakery relates to the introduction of a new operating model in Sweden. Of the Group’s personnel 51% worked in Finland, 29% in Russia and 13% in Sweden.

Since the outbreak of the COVID-19 pandemic in 2020, the majority of Fazer white collar employees have worked remotely in order to safeguard their health and the health of production personnel. All of Fazer’s production units have been fully operational throughout the pandemic. In 2021, restrictions related to the pandemic impacted Fazer Retail in both Finland and Sweden, and continuously varying restrictions and insecurity resulted in retail personnel transferring to other, more stable sectors. All Business Areas suffered from limited availability of production workers as well as salary inflation, especially in Russia and the Baltics. As a result, several actions, such as short-term recruitment programmes and cooperation with manning companies, were initiated during the year.

Personnel by Business Area





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Fazer Confectionery




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Changes in Group management

Mats Liedholm, former MD for Fazer Lifestyle Foods and MD for Fazer Sweden, transferred into the full-time role as MD for Fazer Sweden from the beginning of November. At the end of November, Aaron Barsness was appointed Chief Marketing Officer and Executive Vice President of Fazer Group and member of the Fazer Leadership Team. He assumed his new role 1 January 2022.

Klavs Berzins, Managing Director of Fazer Bakery Baltics, left the company in August 2021 and Anne Mere was appointed as the new Managing Director for the Baltics from September 2021. Petri Kujala was Managing Director of Fazer Bakery Sweden until May 2021, and his successor Patrik Hellgren took up his new position in June 2021.

Board of Directors and auditors

At the Annual General Meeting held on 14 April 2021, Casper von Koskull (Chairman), Ketil Eriksen, Jan Fazer, Johan Linder, Cecilia Marlow and Juhani Mäkinen were re-elected as members of the Board of Directors. Elisabeth Dreijer and Laura Tarkka were elected as new members of the Board. PriceWaterhouseCoopers Oy was re-elected as auditor with Martin Grandell, Authorised Public Accountant, as principal auditor.

Research and development

In 2021, Fazer continued its extensive research work, and especially with the Fazer Xtech R&D programme that comprises multiple foodtech related R&D projects with focus on new plant-based food solutions, nutritional aspects of plant-based diets, sugar reduction and food production side-stream valorisation. Fazer and Solar Foods continued their strategic co-operation in the Solein2Food project that aims to commercialise Solar Foods’ novel protein ingredient Solein®. A major milestone was achieved in the project as the novel food dossier was submitted for EFSA evaluation. Fazer’s PhD project related to grain fibres and gut-brain axis continued in Sweden with a clinical intervention study conducted in Örebro University.

Fazer Group’s 2021 research and development costs amounted to 8.9 million (8.4).


Fazer’s main focus in its operations is on the bakery, confectionery, non-dairy and plant-based foods, and milling markets through its three Business Areas: Fazer Bakery, Fazer Confectionery and Fazer Lifestyle Foods.

Fazer Bakery: solid performance in challenging environment

The prolonged COVID-19 pandemic continued to challenge the bakery business throughout the year. Thanks to the agility and professionalism of Fazer’s employees, the bakeries’ operational continuity was secured, and all bakeries and shop-in-shops remained operational throughout the year. Despite challenges created by increasing raw material and packaging material prices, energy, and transportation costs as well as workforce availability especially in Russia and the Baltics, Fazer Bakery’s performance was solid in 2021 and net sales remained stable at the previous year’s level.

During the year, the active development of the business continued. In Sweden, a new operating model was introduced in the spring, including a reseller and distribution agreement with Polfärskt, phasing out Fazer’s own field sales and distribution. In September, the bakery in Lund was closed. The changes in the operating model impacted sales in the spring but after summer signs of growing volumes and increasing market shares could already be seen.

Fazer Bakery Finland had a successful year with strong performance. As a result of the strong performance of the gluten-free portfolio, and after introducing a dozen new gluten-free products, the business attained market leadership in the gluten-free segments. Demand for white bread, driven by artisanal bread, grew throughout the year, while demand for dark bread declined although remaining a large product category for Fazer Bakery, particularly in Finland and the Baltics. Fazer Bakery Finland invested in a new portion bread line at its Vantaa bakery, which enables the business to focus strongly on producing oat products, a growing category in Finland. 17 new bakeries were opened under Fazer’s popular shop-in-shop concept in Finland, bringing their number to a total of 120. These shop-in-shops already employ a total of 700 people in Finland. Retail’s interest in the concept remains high and the expansion of the bakery network is expected to continue. The bakery shop-in-shop concept has also been brought to Estonia, where there are currently 10 shop-in-shop bakeries, five of which opened in 2021.

Demand for bake-off products continued strong in Russia and Fazer invested in new frozen bake-off infrastructure to answer to the demand. Bakery Russia has been particularly challenged by the increases in raw material prices as well as limited availability of production personnel during the year.

A gradual recovery of the HoReCa sector started in the spring, but demand remained considerably lower than pre-COVID. Newly imposed restrictions started impacting the sector again both in Finland and the Baltics in the last quarter of the year. Day-to-day volatility in customer flows in retail made it difficult to estimate the demand for fresh bread, leading to a somewhat higher amount of food loss, in the shop-in-shops in particular. All business units saw significant growth in online sales during the year.

Fazer Confectionery: strong performance in a volatile market

Fazer Confectionery’s year 2021 was strong. Despite strong volatility in market demand throughout the year, the confectionery markets grew, and Fazer was able to strengthen its positions in all markets. In the summer, the confectionery market was negatively affected by the extremely warm weather that shifted consumption to other categories but bounced back strongly in the autumn with all time high sales in the last quarter of the year. All main categories grew with the biggest growth in gifts and seasonal products as well as countlines. The countline Geisha Crunchy was one of Fazer Confectionery’s most successful products of 2021. In Sweden, demand shifted from packed confectionery and candy bags to pick & mix.

During the first half of the year, the pandemic and the related restrictions continued to have a strong negative impact on sales in the HoReCa sector, Travel Retail and Fazer Retail. In April, restaurants were forced to close, or only serve take-away food in Finland. Customer amounts were limited in Finland and Sweden and as well as opening hours in Finland. In the autumn, a recovery was seen in both Fazer Retail and Travel Retail, although remaining clearly below pre-COVID levels. Fazer Retail opened five new Fazer Cafés and Gateau bakery shops in total in 2021 and launched a new Gateau concept in Sweden. The production facilities in Stockholm were moved to Skogås outside the city.

In September 2021, Fazer Confectionery launched a project to investigate the options to renew the confectionery production in Finland and, as a result, is planning to invest in a new confectionery factory in Finland. If realised, the new factory would replace the existing confectionery factories in Vantaa and Lappeenranta. The change would come into force in 2025 at the earliest. The decision on the potential construction and location of the new factory will be made during 2022.

Fazer Lifestyle Foods: active development continued

Active development of Fazer Lifestyle Foods continued throughout 2021, to bring out the business’ full potential in terms of top line growth and efficiency. During the year, several novelties were launched, among them the Dumle Oat Drink, Fazerina Granola, the Swedish keyhole marked Frebaco Granola and the Green Jelly marmalade, and they were well received by the market. Demand was also strong for the Frebaco Oat rice in Sweden.

The Finnish non-dairy market continued to grow, and the consumer shift from regular milk to non-dairy drinks continued. Market demand for non-dairy was strong, significantly exceeding Fazer’s capacity. To speed up the organic growth, Fazer is currently investing in increased non-dairy capacity and building efficient operations in Koria. The new oat mills in Sweden and Finland were opened in the autumn, and thereby doubled Fazer’s oat milling capacity. In December, Fazer announced its agreement to acquire a Swedish, market leading producer of plant-based drinks, Trensums Food. In the autumn, the ramp up of operations in the state-of-the-art xylitol factory in Lahti started. All these actions significantly strengthen Fazer Lifestyle Foods’ position in the fast-growing global oat markets in accordance with its oat strategy.

During the year, a new operating model was introduced, which comprises five independent business units that have clear end-to-end responsibilities. Development programmes were carried out, focusing on key development areas. A new business unit, Fazer Foodtech, was established to drive Fazer’s innovation agenda and to further strengthen Fazer’s position as an innovative company. Fazer Lifestyle Foods was awarded with several awards for its innovativeness during the year. After winning the Finnish Star Act award in 2020, Fazer’s xylitol factory received the Finnish Chemical Society’s circular economy innovation award and the “Circwaste – Towards Circular Economy in Finland” project’s circular economy award in 2021. Fazer Mills’ innovation Oat rice received recognition and was selected “Food Service product of the year” (“Årets Foodservicevara”) in Sweden. In 2020, the product was awarded “Livsmedelspriset 2020”.


Fazer’s non-financial information describes the company’s approach to the management of environmental, social and employee matters, as well as matters related to respect for human rights and anti-corruption and bribery. This voluntary information has been compiled for transparency purposes based on the requirements of the Finnish Accounting Act regarding Non-Financial Information. As part of this non-financial disclosure, Fazer has also included information of the climate-related impacts to its business by referencing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). More detailed information about Fazer’s sustainability work and key performance indicators are provided in Fazer’s Annual Review.

Sustainability – an integral part of Fazer’s business

Fazer, as The Food Experience Company, brings joy and well-being through its high-quality products and services to people in the Nordics, Baltics, Russia and beyond to some 40 different countries. Fazer focuses on the bakery, confectionery, non-dairy and plant-based food markets. The company is also a major player in the Nordic grain milling market, in foodtech and in retail by operating in nearly 200 shop-in-shop bakeries, bakery shops and cafés throughout Finland and Sweden. Fazer develops food as a solution for a more sustainable planet and business. Sustainability is at the very heart of Fazer’s business – it’s ingrained in the company’s strategy and influences everything from its management, operations and supply chain, new product innovations and foodtech, as well as marketing and branding. Fazer drives the food transition through innovations and sustainable products while minimizing its environmental impacts and securing a sustainable and fair supply chain.

During the year 2021, Fazer broadened its sustainability framework from four core goals to Sustainability Ambitions. The company’s work is now guided by the Sustainability Ambitions of climate & circularity, sustainable products and innovations, sustainable sourcing, as well as people & well-being. Through these focus areas, Fazer believes that it can best create value according to its mission Food with a purpose. Read more about the Sustainability Ambitions in Fazer’s Annual Review.

Fazer’s operative work is defined by operational excellence, efficiency, a high-performance culture, and effective performance management. The company strives to create a safe and inspiring working environment in which its employees can thrive. Fazer cooperates and engages with a variety of stakeholders from educational and research institutions to farmer associations and NGOs.

Sustainability governance and management

Fazer’s sustainability governance practices are based on the ten international principles of the UN Global Compact and the company is committed to supporting the implementation of the United Nations’ Sustainable Development Goals (SDGs).

Fazer’s operations and sustainability work are governed by the company’s values, the Group’s Code of Conduct, Sustainability Policy, Human Rights Policy and QEHS Policy. In its sourcing, Fazer applies a Supplier Code of Conduct, and expects compliance from its raw material and service providers. Fazer applies management and governance processes to ensure that policies are systematically followed.

At Fazer, the highest authority in sustainability matters lies with its Board of Directors and the Fazer Leadership Team. The Board of Directors, for example, reviews the Group-level risk assessment which includes the identified sustainability and climate risks. The Chairman of the Board of Directors also acts as the Board’s ESG sponsor. During 2021, Fazer established an Environment, Social and Governance (ESG) Steering Group, chaired by the CEO, to prepare and discuss strategic sustainability topics and have a clear decision-making forum for these topics.

The operational sustainability work is managed by the sustainability team, as well as the Sustainability and QEHS network. Fazer’s sustainability forum convenes each quarter to share information and engage with a larger number of internal stakeholders, such as the business areas, procurement, human resources. Each of these functions and forums have clearly defined roles and specific responsibilities. 

On site level, sustainability matters are integrated in the operational management systems. For example, the OHS (Occupational Health and Safety) management systems of Fazer sites are, at minimum, based on the local legislative requirements, and most of them also hold the ISO 45001 certificate. All Fazer’s internal production sites have food safety management certifications (FSSC 22000, IFS) approved by the Global Food Safety Initiative (GFSI). Fazer publishes the certification status of all its sites on its website.

For more information about functions and responsibilities governing sustainability matters, see Fazer’s Annual Review.

Sustainability risks and their management

Fazer evaluates and analyses its sustainability risks as part of the Group-wide risk assessment process. As part of their operative QEHS (Quality, Environment, occupational Health and Safety) management, business areas and business units conduct separate risk assessments and mitigation plans on sustainability. In 2021, the business areas also conducted an in-depth assessment of the climate risks and opportunities. Issue management teams additionally identify the potential sustainability issues in different markets and proactively prepare for them. All of these internal assessments serve as input to the Group-level evaluation.

Some of Fazer’s main strategic and operational risks are inherently linked to sustainability, both in its own operations and particularly in the supply chain. The main identified sustainability risks are related to the availability and price of key raw materials, food safety-related issues, potential sustainability concerns in the supply chain, particularly when sourcing certain raw materials from high-risk countries, and reputational damage due to unethical behaviour. Fazer elaborates on the climate-related risks and their mitigation, as well as the opportunities presented by climate action in a separate section below.

The food safety-related risks concern, for example, residues, contaminants, or other harmful substances if they are found in Fazer’s products or in the purchased raw materials. Fazer works to ensure the first-rate safety and quality of its products, and all sites have certified food safety management systems (such as FSSC 22000), including internal and external audits to monitor food safety compliance. Stringent allergen guidelines are also followed in the company’s operations. Fazer engages in continuous actions to mitigate food fraud risks and to improve food defence through access control systems.

In terms of sustainability risks related to the supply chain, Fazer recognizes and actively mitigates challenges related to human rights, working conditions and ethical business conduct. Fazer pays specific attention to the supply chains of high-risk raw materials, such as cocoa, palm oil and soy. Overall, the inability of ensuring the full traceability of raw materials in its supply chain has been identified as an important risk for Fazer.

To mitigate the supply chain risks, Fazer engages in a number of activities, including conducting risk-based supplier audits and buying raw materials according to strict procurement sustainability criteria. The basic requirements for all suppliers are included in Fazer’s Supplier Code of Conduct, and the company has higher sustainability standards for chosen raw materials, such as cocoa, grain, palm oil, soy, eggs, and hazelnuts. All suppliers, including subcontractors, are expected to adhere to the Supplier Code of Conduct. When selecting its suppliers, Fazer conducts quality assurance at several levels before a supplier is approved. Purchasing is steered toward suppliers with developed sustainability work or a positive willingness to change. In terms of potential human rights violations, corruption and bribery risks in the supply chain, Fazer enhanced its counterparty scanning by implementing a dedicated sanction screening tool in 2021.

Promoting and protecting Fazer’s reputation and brand image is essential to its business success. Failure to address the continuing focus on consumer well-being, the nutritional expectations of its products, and the sustainability of its ingredients could adversely affect Fazer’s brands. The risk can also materialize in the event of failing to deliver on Fazer’s sustainability commitments and ambitions. During 2021, Fazer adjusted its sustainability focus areas to drive sustainability efforts even more effectively across the value chain.

Climate-related risks and opportunities

With the increasing need to act on climate change, Fazer continues to innovate sustainable solutions that support the well-being of people and the planet. Fazer sees climate action as an important business opportunity, which is also visible in its strategy through the focus on on-trend categories, foodtech and innovations. Fazer closely monitors and anticipates the developments in consumer needs and is developing its plant-based business to better respond to consumer demand for more environmentally sustainable products. During 2021, Fazer set ambitious climate targets, approved by the Science Based Targets initiative, to drive greenhouse gas emissions reduction across its value chain.

In addition to the clear business opportunities that arise from combatting climate change, Fazer has equally identified climate-related operational and strategic risks related to the availability of raw materials. While there are several other aspects that affect the availability of raw materials, the physical risks posed by climate change is one of them, as it poses veritable risks for the entire global food production and distribution system.

On the operational level, Fazer has identified acute physical climate-related risks as potentially affecting the availability and price of raw materials. Extreme weather conditions, such as heavy rain and drought might result in bad harvests and challenges in the logistics network, thus temporarily disrupting the material supply. These risks are particularly material for critical raw materials for Fazer, such as cocoa, as well as other raw materials such as grains, vegetable oils, sugar, nuts, and dairy. Fazer mitigates these risks, for example, by ensuring alternative sourcing channels and sufficient stock levels of critical ingredients.

On the strategic level, Fazer sees chronic physical climate-related risks as potentially affecting its future raw material supply more permanently. Rising mean temperatures and the resulting conditions, such as volatility in weather patterns and droughts, pose a severe risk to the farming conditions of Fazer’s raw materials in certain areas, particularly the tropical ones. These risks are mitigated with a portfolio of actions ranging from responsible farming and sourcing programmes to new recipe development. Fazer also engages in long-term research projects and collaborates with its partners to develop future innovations and technologies for more secure food supply and production.

Environmental responsibility

Fazer strives to curb climate change and reduce emissions, optimise the use of resources through circularity, as well as reduce food loss and overall waste generation. Climate & circularity is one of Fazer’s Sustainability Ambitions, and the company drives environmental sustainability across its value chain, from the selection of raw materials and product development to reducing emissions in its operations and reducing food loss. The largest environmental impacts of Fazer’s operations mainly stem from the value chain, notably from raw material production and logistics.

In 2021, Fazer stepped up its climate ambition by setting ambitious greenhouse gas (GHG) emissions reduction targets for its operations and the entire value chain. The targets have been validated by the Science Based Targets (SBTi) initiative and are aligned with the Paris Agreement goal of limiting global warming to 1.5 C. Fazer aims to reduce its absolute scope 1 and 2 GHG emissions by 42% by 2030 from a 2020 base year and in a similar timeframe, also reduce its absolute scope 3 GHG emissions by 42%. Fazer has also committed to engaging 53% of its suppliers by spend, covering the purchased goods and services and upstream transportation and distribution, to commit to setting their own science-based targets by 2025.

In 2021, Fazer’s total emissions amounted to approximately 1.7 million tCO2e, increasing by 2% compared to the previous year. Both the emissions from its own operations (Scope 1 and 2) and the value chain (Scope 3) increased. During 2021, Fazer’s production mix was more energy-intensive with more frozen products that are dependent on fossil-based production. The Scope 3 emissions increase can be mainly attributed to an increase in emissions from upstream transportation and distribution.

Reducing food loss is a high priority for Fazer. Fazer has had long-term targets to reduce food loss and waste already since 2015. In 2021, Fazer updated its sustainability approach where the ambition is to optimise the use of resources through circularity. Following this, Fazer has also updated its food loss-related target to better steer its performance into minimizing avoidable food loss. The updated target is 50% less avoidable food loss by 2030 compared to a 2020 baseline (112.7 kg/tonne). It showed progress with a 1,4% reduction in 2021 (111.1 kg/tonne).

Circular economy concepts and the utilisation of side streams are essential in Fazer’s sustainability work and business solutions. The company continues to work in the areas of material efficiency and circularity to find new ways to decrease food waste in its operations. For example, in 2021, the Fazer bakery in Vantaa invested in a recycling machine for surplus dough, allowing it to recycle the dough back into the production process. Fazer also started the preparations for joining the new Material Efficiency Commitment 2022–2026 for the food and retail industries in Finland, a pledge set up between government ministries and sectoral industry associations.

Fazer’s target is to use sustainable raw materials to minimize environmental, as well as social, impacts throughout its value chain. The company is constantly working with its suppliers to reduce the emissions from its raw material production. As an example, Fazer has partnered with Baltic Sea Action Group (BSAG) and Reaktor to create a Farmers’ training platform for regenerative farming in order to turn the agricultural soil from an emission source into a CO2 sink, sequestering carbon in soil, and to prevent eutrophication of the Baltic Sea by minimising nutrient loads from fields to waterways.

Sustainable products, innovations and food safety

Sustainable products and innovations is another Sustainability Ambition at Fazer. The aim is to provide more plant-based food to support the well-being of people and the planet, as increasing the share of plant-based foods helps reduce climate emissions while also improving human health. In 2021, 45% Fazer’s total offering and 43% of its novelties were plant-based.

Fazer is constantly developing a broad range of foodtech initiatives representing innovation leadership in key plant-based food categories, such as oats. For example, Fazer’s new xylitol factory in Lahti, Finland, produces xylitol from oat hulls, which are derived as a side stream of the oat milling process. Fazer also focuses on the development of more sustainable packaging innovations and advocating for circular packaging systems, such as return schemes. A key component in Fazer’s innovation approach is partnering with its customers on shared sustainability ambitions to ensure that the company is a trusted and valued partner.

In terms of product quality and safety, Fazer has in place various controls to always ensure food safety and consistent quality. The company has high quality standards for raw materials and systematic quality assurance processes for finished products. In 2021, there were three product recalls regarding food safety. Product recalls were made as safety precautions related to allergens and additives that were found to contain more ethylene oxide than the maximum limit set by the European Union.

Personnel, employment and social matters

A third Sustainability Ambition for Fazer is people & well-being. Fazer strives to create a safe and inspiring working environment in which its employees can thrive. The responsibility to Fazer’s people encompasses the health and safety, well-being and engagement, and the competence development of its employees, as well as ensuring an inclusive working environment. Fazer provides employment directly and indirectly. In 2021, Fazer employed approximately 8,000 people in eight countries. Fazer’s indirect employment impacts stem from sourcing, partnerships and e.g., investment projects.

The safety of personnel is naturally a priority for Fazer, and the company is actively working towards “zero accidents”. In 2021, Fazer’s LTAF (Lost Time Accident Frequency) was at 5.0, worse than its target of 4.2. The company continues its systematic work for improving the safety of its working environment and the ways of working, and the engagement of all its employees over the long term. A total of 11 783 safety observations were made, which is a 16% increase compared to last year. There were no fatalities in 2021.

An employee engagement survey conducted in 2021 found that Fazer employees are proud of their work and willing to make additional efforts. They are also highly likely to recommend Fazer as an employer. Nearly 77% of employees responded to the survey in total. During 2021, the company also launched a Diversity & Inclusion e-learning to help its employees recognise potential biases and challenge them.

Sustainable sourcing

Sustainable sourcing is also represented as one of Fazer’s sustainability focus areas, as through its extensive value chain, the company has major impacts on societies, communities and individuals. Fazer aims to have sustainably sourced raw materials across suppliers and value chains by 2030. Fazer’s sustainable sourcing approach includes both environmental and social aspects, and the company specifically focuses on the supply chains of high-risk raw materials, such as cocoa, palm oil and soy.

Regarding the critical raw materials, Fazer has committed to sourcing 100% sustainable Segregated palm oil by 2024 in all its product categories and countries of operation. In 2021, 46% of Fazer’s palm oil was Segregated, the most sustainable option in the Roundtable for Sustainable Palm Oil (RSPO) certification system. The remaining share was either certified by using the Book & Claim method supporting the smallholder farmers or sourced using the mass balance method.

Also, cocoa is a key raw material for Fazer, and the company uses 100% sustainable cocoa. Of the sourced cocoa, 48% is certified by the Rainforest Alliance or the Fairtrade cocoa programme and 52% through farmer programmes. As planned, the company grew the share of cocoa from farmer programmes which was 31% in 2020.

In terms of grain, Fazer’s target is for all grain used in its consumer goods in Finland and Sweden to fulfil Fazer’s sustainable grain farming principles by 2025. The principles have been created together with a diverse group of stakeholders, such as farmers, producers’ associations, and environmental organisations.

Fazer engages in a number of activities with its suppliers, including training programmes for local communities and cocoa farmers and controls to prevent child labour in Fazer’s raw material production. The company conducts risk-based supplier audits and buys raw materials according to strict procurement sustainability criteria either via certified sources or via farmer programmes. All suppliers, including subcontractors, are expected to adhere to the Supplier Code of Conduct. Of Fazer’s total external spend, 78% (52% in 2020) had signed the Code of Conduct by the end of 2021. Read more about sustainable sourcing in Fazer’s Annual Review.

Respect for human rights, anti-corruption and preventing bribery

Upholding human rights is of utmost importance to Fazer. The company embraces human rights as part of its sustainable sourcing practices, and these considerations are included in its target of having sustainably sourced raw materials. Fazer does not accept bribery or corruption in any form, in its own operations or in those of its suppliers or partners. Fazer continuously educates personnel to ensure compliance with its anti-bribery programme and relevant legislation in its operating countries.

In 2021, The Group’s Code of Conduct was updated to replace the previous ethics principles. Fazer additionally enhanced its counterparty scanning in terms of potential human rights violations, corruption and bribery risks in the supply chain by implementing a dedicated sanction screening tool in 2021. Fazer also renewed its human rights policy and trained its top management in 2021, with the aim of training its entire organisation during 2022. As a basic requirement to its suppliers, Fazer continues to roll out its Supplier Code of Conduct.

Employees and third parties can report observed or suspected cases of misconduct through a whistleblowing channel. In 2021, 22 cases were reported through the whistleblowing channel and investigated. These cases were related to HR, QEHS, conflicts of interest and other alleged violations.


Fazer regularly evaluates and analyses the Group's strategic, operational, and financial risks within the framework of its risk management policy and takes action to mitigate these risks.

Price and availability of raw materials and commodities

Profitable growth is a crucial part of Fazer’s strategy. Fazer purchases large quantities of raw materials, and availability and fair pricing of certain key raw materials is crucial to Fazer’s business success. A significant and sudden increase in the cost of raw materials, commodities, or logistics could impact Fazer’s profitability if Fazer is not able to pass on such increases to product prices without delay.

In order to understand the market development of key raw materials, Fazer continuously improves cooperation with selected existing suppliers and seeks competitive alternate suppliers to mitigate risk. New alternate suppliers improve price competition, increase production capacity when necessary and can lower sourcing risk. Procurement at Fazer Group strives to proactively mitigate risks associated with pricing, quality, capacity, availability, and other requirements. Raw material prices are hedged according to approved policies. In 2021, all Business Areas were challenged by inflationary pressure in key raw material prices, energy, and transportation costs. Fazer initiated actions to mitigate the negative effects of this. However, the rise in input costs were not absorbed in full, and product price increases were unavoidable.

Changes in the competitive landscape

The food industry is highly competitive. Fazer’s principal competitors are food and snacking companies operating in multiple geographic areas and numerous local and regional companies. Failure to effectively respond to challenges from competitors could adversely affect Fazer’s business. Major competitor consolidation could change the market dynamics and potentially also Fazer’s market position. The risk is managed on the Group and Business Area level through continuous monitoring of the competition. Fazer aims to respond to competition through its superior portfolio of branded products, active management of customer relationships and continuous development of its product portfolio to further differentiate from the competitors and to be competitive. To understand and meet consumer needs and expectations, Fazer invests significantly in active consumer insight work and develop its product portfolio accordingly. In 2021, no major changes in Fazer’s competitive environment occurred.

Reputation and brand

Promoting and protecting Fazer’s reputation and brand image is essential to business success. Fazer’s success depends on the ability to maintain and enhance its brands and develop the portfolio with new product offerings that meet consumer expectations. Failure to effectively address the continuing focus on consumer well-being, including changing consumer acceptance of certain ingredients, nutritional expectations of the products, and the sustainability of the ingredients, the supply chain and packaging could adversely affect Fazer’s brands.

Furthermore, Fazer’s ability to maintain and improve its brand image depends on its ability to anticipate change and adapt to a rapidly changing marketing and media environment, including the increasing reliance on established and emerging social media and online platforms. In 2021, Fazer’s brand reputation remained strong, and the company was selected among the top 10 most reputational brands in Finland for the 9th consecutive year.

Talent management

The implementation of Fazer’s strategy and strategic transformation requires new kinds of skills and competencies. To secure competitiveness and profitable growth, as well as to improve operational efficiency, it is essential to attract and retain personnel with the right skills and competencies. There is a risk that the food sector does not attract the most competent people. Fazer has done very well in employer surveys in Finland and has succeeded well in attracting talented people. In other countries, such as Sweden where Fazer is less well-known, strong focus is put on employer branding and other means to make the company better known as an employer.

Fazer is continuously identifying people with high potential and key competencies for future needs. Through systematic development and improvement of compensation schemes, learning programmes, and career development programmes, Fazer aims to ensure the continuity of skilled personnel also in the future.

Risks related to M&A and transactions

In addition to organic growth, acquisitions are a potential means to achieve Fazer’s goals and strategies. Unsuccessful acquisitions or a failure to successfully integrate an acquired company could result in reduced profitability or hamper the implementation of corporate strategy. Fazer regularly evaluates a variety of potential strategic transactions, including acquisitions, joint ventures and other strategic alliances that could support its strategic objectives. Fazer may not successfully identify or mitigate the risks presented by these strategic transactions. Fazer’s success partially depends on its ability to identify suitable transactions, negotiate favourable terms, integrate or separate businesses, realise the full extent of the benefits, cost savings or synergies presented by strategic transactions and minimise potential disputes with buyers, sellers and strategic partners. Fazer’s M&A activities, or related activities such as reorganisations, restructuring programmes and transformation initiatives, may require Fazer to recognise impairment losses or to take action to reduce costs after the completion of a transaction, which may negatively impact Fazer’s financial results.

Fazer has created M&A processes and gathered a dedicated Group level M&A team, who actively manage M&A activities and support execution of business transactions. External advisory services also support the successful management of such transactions.

Human rights in the supply chain

To maintain and strengthen customer and consumer trust, it is important to maintain good control of the supply chain. Sourcing certain raw materials, such as cocoa, may include human rights challenges. Fazer engages in systematic internal work to define sustainable sourcing and to develop related procurement processes. Human rights related risks are also mitigated by following UN Guiding Principles on businesses and human rights and processes described in these guiding principles. Fazer has implemented a whistleblowing system that provides an opportunity to report suspicions of misconduct. Mapping of risks at the supplier level is based on a number of different dimensions. Fazer conducts extensive quality, safety, and sustainability work, and quality assurance is conducted at several levels before a supplier is approved. Purchasing is steered toward suppliers with developed sustainability work or a positive willingness to change.

Fazer’s suppliers are expected to actively improve their human rights, environment and occupational health and safety activities as well as ethical business conduct. In 2020, Fazer updated its Supplier Code of Conduct and processes related to supplier checks were further developed. All Fazer’s suppliers, as well as supplier employees and subcontractors, are expected to adhere to the Supplier Code of Conduct. By the end of December 2021, 78% of Fazer’s suppliers (calculated as share of external spend) had signed the Group’s updated Supplier Code of Conduct.

Geopolitical instability

Fazer has operations in 8 countries and sells its products to some 40 countries globally. Political developments and changes in legislation can have an adverse impact on Fazer’s business. The company actively monitors political and legal developments in its markets and engages in a dialogue with various official bodies on projects of importance to its operations.

Changes in laws and regulations

The food industry is highly regulated and subject to government oversight. Various laws and regulations govern among others food production, packaging and waste management, and health and safety practices. Government authorities regularly change laws and regulations as well as their interpretations of existing laws and regulations. The establishment of taxes targeting the consumption of specific products or ingredients could adversely affect Fazer’s business. Climate change concerns might result in new legal and regulatory requirements to reduce or mitigate the effects of climate change. These changes could increase Fazer’s operating costs related to energy or packaging through taxes or regulations. In its extensive sustainability work, Fazer is continuously improving the energy efficiency of its operations and aims to substantially reduce emissions throughout its supply chain.

Customer consolidation and increased retail power

Retail customers, such as supermarkets, discounters, online retailers and retail networks may continue to consolidate or be acquired by new entrants in the food retail market, resulting in fewer, larger customers with increased negotiation power. Large retail customers could delist Fazer’s products or reduce the shelf space allotted to them, demand lower pricing, increased promotional programmes or longer payment terms. Fazer mitigates the risk of retail consolidation and increasing retail power by actively building customer relationships and strategic partnerships, maintaining a superior product portfolio and brands, developing the service levels and maintaining cost-efficiency in production to remain price competitive.

Climate change

Climate change may have an impact on Fazer’s supply chain and operations in the future. CO2 and other greenhouse gases in the atmosphere have caused and will in the future cause changes in weather patterns around the globe. These changes are expected to increase the frequency of extreme weather events and natural disasters and affect water availability and quality. These impacts increase risks for the global food production and distribution system. Decreased agricultural productivity caused by climate change might limit the availability of purchased commodities, such as cocoa, which is a critical raw material for Fazer, and is especially sensitive to changes in climate, as well as other raw materials such as grains, vegetable oils, sugar, nuts and dairy.

Cyber security

Fazer is increasingly dependent on data systems, data traffic and external service providers. The interconnectedness of networks, the outsourcing of services and online services have made it more difficult for companies to monitor their data security effectively. Prolonged disturbances in data systems, payment transmission or elsewhere in the supply chain, or other exceptional situations such as a cyber-attack, could paralyse the company’s operations or halt the flow of goods within the Group, causing significant financial losses. Fazer is focusing increasingly on identifying data security risks and increasing its data security capabilities through trainings and tests and ongoing business continuity planning.

COVID-19 and other pandemics

Global or regional health pandemics, including COVID-19, could negatively impact Fazer’s business operations, financial performance, and results of operations. Depending on the severity, magnitude and duration of the pandemic, it could negatively impact Fazer’s business in numerous ways. Although Fazer was impacted by the pandemic, the business showed clear resilience in 2021. Fazer managed and mitigated the risks related to the pandemic by maintaining and executing rigorous business continuity plans as well as country and function-specific instructions. Fazer's financial position and cash flow remained strong.

Hazard risks

Major operational breaks such as fire, dust explosion or machinery breakdown in the production could negatively impact Fazer’s business operations and ability to supply products. These risks are mitigated by continuous improvement of processes, conducting risk surveys, ongoing business continuity planning and transfer of risk through insurance.

Financial risk management

The Group is exposed to various financial risks such as foreign exchange risks, commodity risks, interest rate risks, liquidity and refinancing risks, and counterparty risks. The objectives and principles within which the financial risks are managed in Fazer as well as the principles that govern the commodity specific risk management are fined in respective policies approved by the Board of Directors.


At the end of 2021, the parent company of Fazer Group, Oy Karl Fazer Ab, had 4 341 039 preference shares and 2 365 200 ordinary shares. The preference shares carry a preferential right of at least 6%, of the nominal value of the share, ahead of ordinary shares for the annual dividend from the company’s distributable profits. At the Annual General Meeting, each ordinary share is entitled to ten votes and each preference share entitles to one vote.


In 2021 Fazer continued to simplify the Group's legal structure by merging and dissolving several companies. A more detailed description of changes in the Group structure can be found in note 24 to the consolidated financial statements.

Fazer continues to simplify the Group's legal structure and is considering a number of alternative structures in this context, which may lead, among others, to the separation of the investment operations from the parent company.


In January 2022, Fazer signed a new EUR 200 million revolving credit facility (RCF) agreement linked to sustainability targets, a milestone in the integration of Fazer’s financial and sustainability targets reinforcing the interlinkage between its financial and non-financial performance, further positioning Fazer as a sustainability leader.

In January 2022, Fazer announced its plan to invest in a new confectionery factory in Finland. If realised, the new factory would replace the existing confectionery factories in Vantaa and Lappeenranta. The change would come into force in 2025 at the earliest. The decision on the potential construction and location of the new factory will be made during 2022.

In January 2022, The Swedish Competition Authority approved the acquisition of Trensums Food AB and the closing of the deal took place on 28 February 2022.

The geopolitical situation in Europe changed dramatically in the end of February. On 2 March 2022 Fazer announced the suspension of all exports of its products from Finland to Russia. Fazer’s exports to Russia have comprised of confectionery and milling products. On 6 March 2022 Fazer announced its decision to exit all its operations in Russia. Local Bakery operations in Moscow and St Petersburg have employed approximately 2,300 persons. In 2021, net sales from Russia totalled approximately EUR 157 million, accounting for 13% of total Group net sales. Fazer will continue assess the impact on year 2022 financial statements.


All Fazer markets are expected to grow in 2022, but due to the uncertainty related to the COVID- pandemic, visibility remains low. In addition to the pandemic, price pressures on energy, raw materials, packaging and logistics costs will continue and geopolitical tensions will create uncertainty in the market.


The parent company’s distributable equity on 31 December 2021 was 1,015,707,251.89 euro of which 30,830,830.89 euro represent profit for the financial year. The Board of Directors proposes to the Annual General Meeting that the distributable profit should be appropriated as follows:


a dividend of 13.60 per share to be paid

91,204,850.40 euro

to be retained in non-restricted equity 

924,502,401.49 euro


1,015,707,251.89 euro


No significant changes have taken place in respect of the company’s financial position after the balance sheet date. In the opinion of the Board of Directors the proposed distribution of profits will not compromise the company’s solvency