Chr. Hansen Q1 results reveal 8% growth in Food Cultures and Enzymes

14 Jan 2021 --- Chr. Hansen has revealed its Q1 results, highlighting strong organic growth. With this, the company is on track to execute its 2025 strategy.

Q1 2020/21 organic sales growth was 10 percent, equally split between volume/mix and price, and driven by Health & Nutrition, which delivered 15 percent growth, while Food Cultures & Enzymes delivered 8 percent growth.

According to the company, it is “off to a positive start to 2020/21 with good commercial traction and integration of acquisitions on track.”

Chr. Hansen also says its “outlook for 2020/21 is unchanged on all key parameters.”

Food Cultures & Enzymes delivered 8 percent growth in Q1.Performance amid COVID-19
“Our first quarter came in quite strong on a relatively easy comparable from Q1 last year, with good performance across our business, especially within Health & Nutrition. We were able to win new business, launch new products in Food Cultures & Enzymes and drive upselling in key markets such as cheese – all despite the difficulties of COVID-19,” says Mauricio Graber, company CEO.

“We have more product launches scheduled for the current financial year, which will help to ensure that we have a healthy commercial pipeline in the years to come.”

According to the company’s own estimates, the end markets for fermented milk declined slightly in Q1 2020/21. The impacts of COVID-19 led to reduced output in China, the largest yogurt market in the world, and in Latin America, while an increase in in-home consumption of fermented milks in EMEA and North America partially offset the declines.

The global production of cheese is estimated to have grown by more than 1 percent in Q1 2020/21, broadly driven by all regions. On the demand side, COVID-19 had negative consequences for out-of-home consumption, but the effect was more than offset by an increase in at-home consumption.

“Our CHY-MAX Supreme enzyme has generated a lot of customer attention on a global scale,” Lise Mortensen, CFO of Chr. Hansen, tells FoodIngredientsFirst. “And that’s also what's impacting the positives of this quarter,” she continues. 

“It’s a game-changing coagulant that produces up to 1 to 4 percent more of the same amount of milk. And the result is, of course, less waste. And with the pandemic going on, our customers are focused on cost savings, and then so this is avoiding food waste. And it’s also improving the profitability of our customers.”

Meanwhile, sister publication NutritionInsight details the temporary capacity constraints in Chr. Hansen’s human milk oligosaccharide (HMO) business, which is set to impact FY21 revenues negatively. 

Mortensen says that the constraints stem from the existing factory in Germany that Chr. Hansen took over in its September acquisition of HMO specialist Jennewein Biotechnologie. 

The road to 2025
Chr. Hansen is on course to execute its 2025 strategy and become a focused bioscience company based on a unique microbial and fermentation technology platform. 

Graber says 2021 will be a year of transition, where the company will need to secure a successful integration of the acquired businesses. Chr. Hansen is on course to execute its 2025 strategy.

“We have started strong, and we will address any challenges that may arise in those processes head-on and with determination. The divestment process of Natural Colors is also on track and the business delivered as expected,” he adds. 

“Our outlook for 2020/21 remains cautious, and despite COVID-19, we can maintain our outlook on all key parameters. This means that we will still outgrow the underlying markets as we strive to deliver industry-leading growth rates.”

Investment in fermented plant bases was highlighted in Chr. Hansen’s 2025 strategy, which pegs the category as a “lighthouse,” a business category worth potential revenue above €100 million (US$118 million). 

In November, Chr. Hansen launched FreshQ DA, the food culture selected to help strengthen the fermentation of plant-based products, providing better protection against the spoilage caused by yeasts and molds. 

Edited by Elizabeth Green, with additional reporting from Katherine Durrell