We are expanding from a Finnish company to become Northern European, with operations beyond that.
In the next few years, we aim to create value through building an even stronger position as the number 1 FMCG brand in Finland, developing leading positions in Northern Europe and beyond, accelerating our profitable growth through innovations, on-trend categories and foodtech, and excelling in our ways of working as an integrated company to be an industry leader in profitability.
This strategy is enabled by our cultural change and by developing food as a solution for a sustainable planet and business, delivered to our consumers through our brand promise Northern Magic. Made Real.
Evolving food system drives changes in operating environment
The operating environment for FMCG companies has changed, with the food system evolving and growing through distinctly different established categories, on-trend categories and foodtech. To succeed in the long term, we as an FMCG company need to master all three. These changes are driven by and further enhanced through the ongoing channel disruption.
eCommerce, in particular, is rapidly growing in importance – not as an additional sales channel but as an emerging alternative to traditional trade. Drivers behind this development include the millennial effect and the even more demanding generation Z, the growth of attacker brands at the expense of larger more traditional food players, and the new rate of innovation and change brought by foodtech. Foodtech makes the food system more productive, affordable, sustainable and healthy through innovations in technology, cultivation methods, new ingredients and new types of services. At the same time, the focus on convenience, good-for-me, personalisation, transparency and sustainability continue to grow.
To address the further fragmentation of the food landscape from both a production and a channel perspective, we need to leverage our role as a reliable and genuine brand towards consumers and retail while strengthening our capabilities and role in the growing channels.
Simultaneously, we need to adapt select best practices from successful attacker brands to drive further growth through a clearly articulated and communicated brand position and portfolio. We need to build on our on-trend ingredients to speed up our innovation track, continuously anticipating new consumer preferences. Developing Fazer’s position in foodtech and our ability to commercialise significant innovations will, in the future, play an even more important role in executing our ambitious growth strategy. In building on anticipated consumer trends, faster innovations and foodtech, we must master consumer engagement through the implementation of modern technologies to meet or preferably exceed the advances of our highly credible, capable and diverse competitors.
Targeting the leading position in FMCG
We are The Food Experience Company in Northern Europe and beyond. Our mission is Food with a Purpose and vision Towards Perfect Days. In doing so, we will in the next few years create value and strengthen our position as the leading FMCG company in Finland, build leading positions in Northern Europe and beyond, accelerate our growth through leading positions in on-trend categories, innovation and foodtech, and achieve industry-leading profitability.
Concretely, we are targeting:
• Average annual net sales growth 6-8% (including organic growth and M&A)
• EBITDA margin >12%
• Maintaining a solid balance sheet with equity ratio >50%
• A continued significant dividend yield with a payout ratio of >50%
• Increasing market shares in our core markets and categories
New vision as basis for strategy implementation
Our mission is Food with a Purpose. This is why we exist, and the foundation for everything we do.
We are The Food Experience Company. In early 2020, we updated our vision: Towards Perfect Days. Our vision sets out what we as a Group want to achieve, setting our direction and the basis for our strategy.
We updated our vision because the market environment gives us the opportunity to address the consumer more holistically than before. Now, through the sale of Fazer Food Services, as a more focused FMCG company we are in a better place to do so with a clear vision as our guiding Star.
Now is the time to find our full potential and unleash it. It is time to see our role in people’s lives in a new light. In doing so, we want to be a part of all those memorable moments that make a perfect day.
It is a step change, but if we can make a single perfect day, for a single human being, we are simply making our world a better, happier place. It truly is food with a purpose.
From 2019 to the new decade
In 2019, we implemented our strategy successfully in many ways. We repositioned Fazer as an FMCG company through the sale of Fazer Food Services. We also actively implemented the renewed Fazer brand: Northern Magic. Made Real.
We invested in organic growth in Fazer Confectionery and Fazer Bakery’s shop-inshops and expanded Fazer Lifestyle Foods’ business through the acquisition of Kaslink. Fazer Retail’s concepts were further developed, and the network expanded. We invested in innovation and R&D through, among others, the new xylitol factory in Lahti, our partnership with Solar Foods and our internal innovation challenge.
In 2020, planned strategic actions include the re-organisation of our sales force in Finland in order to serve our customers better than before. We will invest in growth in the Nordics and Baltics in Fazer Confectionery while strengthening our nondairy offering and distribution through Fazer Lifestyle Foods.
Our plans also include expanding our shop-in-shop operations and considering our manufacturing efficiency potential in Fazer Confectionery and Fazer Bakery. We will complete the xylitol factory and oat mill investments announced in 2019, significantly increasing our oat capacity while applying the principles of circular economy in our production.
We will identify and implement opportunities across our functions to become a more integrated FMCG company after the Food Services divestment. We will focus on integrating acquired businesses Kaslink and Vuohelan Herkku into our operations and ways of working, but also look into further acquisitions to strengthen our organic efforts.