Interview: Palsgaard R&D Arm Targets Innovation Beyond Food for Growth
03 Apr 2017 --- As Palsgaard celebrates 100 years since its founder, Einar Schou, invented the modern commercial emulsifier, the Danish-based ingredients manufacturer is increasingly looking outside of its base of food for growth. Palsgaard set highly ambitious 5 year growth targets in 2016, aimed at doubling turnover of DKK1 billion (€135 million) in 2021.
Palsgaard A/S owes its highly successful portfolio of vegetable-based emulsifiers and stabilizers to sister company Nexus A/S, which comprises a range of laboratories and functions with a common purpose: to continuously create new and innovative solutions to serve end-users worldwide – and to continuously refine existing emulsifier formulations to meet client-specific needs.
Nexus CEO Viggo Norn, a highly respected scientist and entrepreneurial innovator who has led the company for over 25 years, was officially replaced by Claus Hviid Christensen at a ceremony at the company’s headquarters on April 1 (pictured together here). Viggo was instrumental in helping Palsgaard to grow during his time, providing innovation after innovation to meet market needs.
“We will compete in more areas, not just food, and will start to compete more and more with larger companies,” Christensen tells FoodIngredientsFirst in a detailed interview, just before taking on the role. “We are going to cover a lot of new ground with our emulsifiers, beginning with our most recent move into polymers and developing this along with other entirely new business segments. In fact, given that our products, their derivatives and our competencies can be expanded into so many new potential applications and services, we need to choose the next steps with care.”
In the 100 anniversary year, the focus at Palsgaard will be on looking forward, as much as on looking back. “In 1917, you could say that a lot of the understanding of emulsifiers was phenomenological in its nature, with limited understanding and a lot of room for trial and error. As I see it, the big trend now is towards the molecular design and control of emulsifiers. In this area, there are still a lot of things that we know work, but we don’t know why or how,” Christensen says.
“We are getting further with sophisticated technologies, so that we are actually going from a macroscopic understanding to a detailed microscopic, or even nanoscopic understanding. Of course each and every day that understanding leads us to design more and more improved or functional products.”
One example of innovation in analysis comes in ammonium phosphatides, which are used in chocolate to replace lecithin, a natural product that is a limited resource, with many raw material challenges. “When we produce that, it is a mixture of hundreds or even thousands of components. Even though it has a single E number, it is built up of many different substances. We are now getting to the bottom of understanding the functionality of these different molecules. We know that they have very different functionality when it comes to decreasing the viscosity of chocolate during the manufacturing process,” he explains. “When we understand which molecules have the largest effect, we can develop strategies to create products. This eventually means that our customers can dose less and less of the additives into their formulations. This method is going to all of our emulsifiers and is a trend that I see continuing in the food and ingredients industry for many years to come.”
This type of innovation is also opening up new applications beyond food alone. “Developing a molecular understanding of how an emulsifier works and which specific components, whether natural or synthetic provides the functionality that you need. Why and how they do it is a constant source of new products in other areas; whether cosmetics, polymers and the asphalt industry, which uses a huge volume of emulsifiers. The big thing is that we are now moving from a trial and error based experimentation, to a more knowledge driven approach,” he explains.
In 1917, Danish-born businessman Einar Viggo Schou, having returned from a successful career in the English margarine industry, developed a potion he called Palsgaard Emulsion Oil (PEO) in a simple laboratory. Schou’s emulsifier dramatically changed the process of producing many different foods. With PEO, manufacturers had obtained an entirely new understanding of what was going on at a chemistry and functional level, allowing different raw materials and emulsion types to be brought into recipe development. Today, hundreds of thousands of individual food products, including most of the approximately 10 billion liters of ice cream produced each year around the world, use ingredients that originated from Einar Schou’s invention in some form or another.
But despite this long history, Palsgaard is still learning about the potential of this basic ingredient, due to the advances in analytical sciences. “The first commercial emulsifier was produced exactly 100 years ago [1917] by blowing air through soy oil. It is only in the last months that we found out what the molar mass was of that emulsifier,” says Christensen. “That is quite a fundamental thing. I think that our understanding will definitely drive continuous improvement. Some will be small and incremental, but others will allow us to enter entirely new fields where we are not active today.”
Nexus and Palsgaard form a uniquely synergistic constellation in which research, development and innovation is conducted in separate, but closely related, entities to ensure that the horizon is sufficiently long and the ambition sufficiently high.
“I started here on January 1, where I have been trying to get up to speed on the topics and themes that are important in this area,” Christensen says. “I worked with catalysts before and the similarities and analogies to emulsifiers is more pronounced than I thought it would be. The types of problems that we are trying to solve and products that we are trying to develop; there are lots of analogies and ideas and principles at play.”
Christensen has worked in innovation and R&D in a number of settings, but for him, Nexus is an entirely unique setup. “When Herbert Schou decided to establish Nexus in 1949, it was based on the idea that research and innovation should not be driven by short terms interests. He therefore decided that the structure should be that Nexus should serve as an independent research organization, that should serve Palsgaard for quality control, analysis, R&D, business development projects etc. It has been the structure since,” he says.
This offers high levels of freedom in R&D and innovation. But with freedom comes responsibility, as the easiest thing is to do a lot of things that are not sufficiently focused. “I have always seen that at publicly traded companies you develop too short term strategies, because everyone is focused on quarterlies. I have also seen research develop into a bubble of its own, without the necessary dialogue with customers and daily business,” he explains.
“People here have been able to establish a tradition where there is a lot of ambition. There is room to explore creativity, freedom to do it and also a deep respect and understanding that everything needs to create value for the business in the both short and long term. At Nexus, we have a robust tradition of doing the more radical innovation and looking for some applications outside of food or finding unconventional answers to the questions that emerge. The structure within the company is that we will only be competitive in 10-100 years from now, if we remain dedicated to innovation,” he adds.
In terms of personal ambitions for the role, he states: “At Palsgaard, we have one important thing, which is required from us from the Schou Foundation. This is that they must be good workplaces. I will do my utmost to ensure that this is a good workplace for all employees, also in the coming years. But I’ll also do my best that 20-30 years from now that we maintained that very entrepreneurial approach that has started out of our roots. Making sure that those two things are in place and using them as ingredients as a stepping stone to make important innovations that help us to better in food science and move into completely new areas.”
Part of the reason for this move towards new application areas is undoubtedly the rise of clean label, with E numbers, such as those for emulsifiers, rightly or wrongly having negative connotations in the mindset of many consumers.
“There is this trend and part of our approach is to make our emulsifiers more and more effective, so that we can use less and less of them. We also have a big program of finding alternatives one way or the other, that would allow us to not make ‘clean,’ but at least ‘lean’ labels with less E numbers and produce clean labels without the addition of synthetic emulsifiers,” says Christensen, who notes how experience can play a role. “All this 100 years of experience also allows us to move into entirely new areas. We have the fundamental understanding and when people face a problem in asphalt, cosmetics or polymer additives, we can often go back and find a notebook from decades ago where experiments were conducted at Palsgaard in the past. We can find examples of many different types of applications of emulsifiers and use those as a stepping stone outside of the food industry.”
Other areas being assessed include specialized drug delivery systems and more specialized applications. “For us, with all our tradition and history, which is a result of the freedom in Nexus, it is a matter of thing about what to do first, as we have more opportunities and we can effectively pursue. After all we are still a relatively small company with limited resources, despite the very attractive setup that we have. It is a matter of prioritizing and dosing our efforts to see a reasonable effect in the short term,” he says.
But food is still key. “There are several products slated and already now especially looking outside of the food area at the moment, you can already find many new formulations, but we need to maintain a constant stream of developments in the food area, so there are things to watch for and we are optimistic about new product launches and the possibilities of doing this in a smarter way,” he concludes.
By Robin Wyers
