KEY INTERVIEW: Novozymes Looks to Regain Growth in Food & Beverage Enzymes

16 Feb 2015 --- Global biotechnology company Novozymes has reported of strong growth for 2014 and a positive outlook for the year ahead, but its recent results statement did point to slower growth from its food and beverage division. Here, FoodIngredientsFirst talks to the company’s Vice President for Food & Beverages, Rasmus von Gottberg, to see what the future holds for this division.

“The prime reason for slow growth in food and beverages in 2014 was related to our starch business, specifically in China,” von Gottberg explains. “The starch industry in China suffered due to challenging corn prices. Meanwhile, a multitude of smaller things also affected this division: our distilling and other grain processing businesses in China were also weak.”

Looking forward, he explains that Novozymes has set out to achieve growth for the year ahead and the company is working hard to show that food and beverage delivers towards this.

“Our current view is that we expect the challenges in China to have bottomed out now and we will see more positive developments in this region,” he says. “It does not mean we expect to get back to previous levels overnight but it will level out and we will not have these adverse conditions to deal with.”

Trends in Food and Beverages
Looking forward, there are a number of trends and growth drivers in food and beverages that Novozymes can be part of, he explains.

“In general emerging markets are starting to feel much more relevant in terms of their potential for growth in food and beverages as a whole, particularly when it comes to processed foods.”

He points to other important trends for the business, such as food safety. “This is important because we want to document our products well because we are a science-based business”.

The trend for healthier products is also something Novozymes can tap into and he notes that brand owners are increasingly using local supplies as part of their commitments to sustainability, as well as fitting into clean labels trends.

“All of these things call for good potential for us,” he notes. “But against this some consumers want to stick to traditional foods and we are also seeing some scepticism about technology in food, such as the rising debate on GM foods.

“Food and beverages is a fragmented sector and that makes it hard,” he explains. “All in all, some of these trends and drivers speak to Novozymes.”

Enzyme Innovation
The company continues to innovate within food and beverages.

“We have been working on LpHera, which boosts starch processing yields during liquefaction while securing chemical, water and energy savings.”

For the ingredients industry there is also “significant potential” in the company’s technology in baking.

“Novozymes is a pioneer in the area of fresh-keeping for example, and we keep adding to our offering by developing solutions to bring new freshness parameters to packaged bread. We are also working to be able to provide solutions for areas such as texture, softness and sugar reduction in the baked goods sector.”

Other areas the company is working on is in grain processing and oil seed production. “If you look at oils and fats we see opportunity to drive yield in this industry, to help with trans-fat reduction and to enable more environmentally-friendly processing methods. This is an area where enzymes are still the early stages.”

New Corporate Strategy
This month Novozymes also announced its new corporate strategy, “Partnering for impact”, which was accompanied by a new set of long-term social, environmental and financial targets and a new purpose statement which reads, “Together, we find biological answers for better lives in a growing world – let’s rethink tomorrow.”

With this strategy, Novozymes says it reinforces its commitment to help solve some of the pressing global challenges facing a growing world.

The new strategy sets out four focus areas for Novozymes, namely;
1) Rally for change,
2) Lead innovation,
3) Focus on opportunities and
4) Grow people.

These focus areas will not only be addressed at a corporate level but also be reflected in the separate strategies for each industry area. With the special focus being on ‘Rally for change’, Novozymes will explore new kinds of partnerships, and become a driving force in bringing together coalitions of the willing, for example, working with governments and international organizations to create sustainable energy from waste or partnering with countries to solve challenges about access to nutritious food and clean water.

Von Gottberg talks specifically about the second area of focus, where the company aims to lead innovation.

“I think we have the opportunity to impart our innovation model in various ways – for example we can push for more local innovation, and this is all about adapting better to local needs,” he explains.

“It’s about educating about the value of enzymes and how to use them but at the same time is its learning process for us, and we need to get a good understanding of local needs.”

He explains that because Novozymes is a B2B company they are removed from the end consumer. “It means that by working more closely with our customers and educating them about our technology, we can get a better idea of what solutions are required.

“As a company we are a couple of steps ahead in some of the other market segments but because food and beverage is so fragmented and there are lots of small players, we haven’t been able to apply this strategy as much. We need to step up our game here – there is no way around this. It needs a holistic approach because there is a collection of industries and trends that cut across food and beverages and we need to work with people who have the same views as us.”

To conclude, von Gottberg is positive that the food and beverage division will play stronger role in the company’s growth for the years ahead.

Having been in the role since September 2014 he says he has “no complaints” about the amount the company has been investing in this sector.

“There is definitely a strong investment willingness, but the onus is on us.”

By Sonya Hook