We have begun our transformation into a modern sustainable food company with joint strategic direction. During the 2018–2022 strategy period, we intend to grow our net sales on average by 6–8 per cent annually. We target a Group EBITDA margin of at least 12 per cent. In relation to these targets, 2018 was a challenging year. We are nevertheless committed to improving our performance with strategic initiatives in all businesses and geographies. We have set the bar high and will focus on execution.
Development of our business and product portfolios is one of the cornerstones of our strategy. We leverage deep customer insight and close cooperation with the scientific community to create new, attractive products and solutions. In addition to the development and innovation in the businesses, we use Fazer Lab to build new growth engines for Fazer and accelerate transformative business development across the Group. We innovate through collaboration, creating added value for customers and partners alike.
Renewed brand supports strategic expansion
With our renewed Fazer brand, we will ensure that Fazer will be meaningfully different in the eyes of the consumer also in the future. ‘Northern Magic. Made Real.’ is unique and forward-looking; it is an ambitious promise that builds on our heritage and reaches out to the future, enabling Fazer’s ambition of strong expansion in Northern Europe and beyond. In addition to excellent products and services, there is a growing customer need for brands to stand for a deeper purpose and to demonstrate values, attitudes and actions that do good for the society. We want consumers to choose Fazer. Our renewed brand helps us better communicate who we are, what we offer and what we stand for.
In 2018, we introduced new products across categories; functional Froosh smoothies and Fazer Alku cereals, new Fazer Yosa oat products for snacking, drinking and cooking, as well as crispy, fibre-rich Fazer Snacks, to name a few. We also developed products and services to be introduced in 2019 and beyond.
Consumer insight guides portfolio development
In our strategy, we place the consumer first. By engaging with consumers in all contact points – online and in our cafés, bakery shops and restaurants – we learn what people value. Understanding their needs more thoroughly allows us to deliver new products, services and experiences faster. We experiment fearlessly to surprise consumers with new flavours and services. Having a meaningful role in people’s lives is reflected as added value in our customer relationships.
The health and well-being trend continues strong, and customers’ interest towards sustainability continues to grow. According to a food trend survey commissioned by Fazer in 2018, as many as 41% of Finns are interested in favouring vegetable proteins to protect the environment and 54% would eat food tailored to their health condition.
Fazer Lifestyle Foods, a business area established in 2017, serves conscious customers looking to enhance their quality of life through food. The business area focuses in non-dairy, plant-based meals and breakfasts and sustainably produced foods. Fazer Lifestyle Foods has been recognised as a strong growth area, and its organic growth will be supported with potential acquisitions. In Fazer Food Services, we introduced Fazer Brainhow to increase awareness about brain-friendly foods – a topic we continue to research.
In the beginning of 2018, we formed the Fazer Retail business unit to strengthen our direct retail offering to consumers. Fazer Retail caters to customers in cafés and bakery shops, combining its high-quality artisan products with an exceptional customer experience. Strategic recruitment actions have been carried out during the year to ensure the organisation is equipped for future growth.
Our ambition is to grow beyond our main markets in the Nordics, Baltics and Russia. We will reach new customers in Northern Europe and other selected markets with an offering based on strong brands in growing categories. The lifestyle category, together with chocolate, will lead the way to international markets.
Smarter, faster, digital Fazer
We have created a digital vision and roadmap for the Group. Fazer Digital means that we will become smarter and faster. We will increase our understanding of how consumer behaviour is evolving and innovate across our categories. Our digital roadmap for 2019-2020 will focus on the following themes:
Direct to consumer – We will build direct relationships and insight for creating meaningful offerings and experiences, supporting brand loyalty. Consumer understanding, offerings and insight drive Fazer’s position as a preferred trade partner and enable new business models and opportunities.
Digital commerce – We will ensure capabilities to serve customers in various channels. We will create new business models, revenue streams and go-to-market strategies as well as develop our existing models and relationships.
Connect the operations – We will use data and analytics to make the supply chain transparent and to drive efficiency. We will enable new delivery and fulfilment models by increasing agility and responsiveness through connected processes, shared information and demand analytics.
Build data capabilities – We will harness data from processes, markets and transactions to create insight and to transform operations. We will create an environment for learning and sharing.
Fazer values are at the heart of our operations
Our values guide us in everything we do, and they form a core around which strategy, mission and vision were built. These values form the basis for our everyday interactions and steer us towards the future.
Agile High Performance Culture driven by entrepreneurial spirit
Staying competitive requires fast moves. We favour action to lengthy planning processes. We engage others early, collaborating iteratively to integrate points of view along the way. This requires trust and openness to learn from each other. It is our shared task to build a working culture, where we are comfortable to share without fear of judgement before being ready. Our behaviours enable the development of a truly entrepreneurial culture: we engage, we perform and we develop.
We aim to develop a high performance culture in which we act more like entrepreneurs than employees. It means looking further than completing our task, understanding the impact of our contribution, adapting quickly to changes in the environment and taking responsibility for the result. We all have an important role in transforming Fazer.