Health and emerging markets propel Danisco Cultures growth

By Jess Halliday

- Last updated on GMT

Related tags: Danisco cultures, Probiotic

Danisco Cultures is ploughing research and innovation efforts into
studying the health promoting properties of its strains - a shrewd
move not only because of the impending EU health and nutrition
claims regulation but also since cultures for the health and
supplements sectors experienced 15 per cent growth in the last
year.

In its full year results announced last week, Danisco reported 69 per cent growth in its specialty products to DKK 6.7m (€0.9m), and within this cultures experienced growth in excess of ten per cent.

"We are very happy with the development. It's a bit above market,"​ Fabienne Saadane-Oaks, president of Danisco Cultures told NutraIngredients.com, calling probiotic dietary supplements "an incredible success story"​.

As health food and supplement-makers prepare for the impending Health and Nutrition Claims legislation, expected to come into effect next year, probiotics is expected to be one area that will particularly benefit.

Even though the European market for spoonable probiotic yoghurts alone was worth US$1.6bn (€1.25bn) at retail in 2005, according to Euromonitor International, to date probiotics have tended to err on the side of caution with their claims, making only nebulous marketing statements to the tune of 'makes you feel better', or boosting energy.

Saadane-Oaks said she expects that health claims will clarify the message for the consumer. In order for claims to be approved, however, there needs to be a solid scientific evidence of health efficacy.

"We have a continuous pipeline of health efficacy studies,"​ she said, "and this has been our strategy from the start."

It takes nine to 18 months to get a valid claim study out, the results of and the results of a major new study are expected to be made public next month.

Nor does Dansico rest on its laurels when it has established new claims, but sets to work designing new products around them or tapping new markets they open up.

The company has an impressive bank consisting of more than 10,000 potential strains kept in a carefully controlled environment - and is continues to source new ones. While not all of these are active, they are continuously screened for their properties and potential for mutations.

This task has become much easier now that Danisco is able to use genome sequencing to obtain the fingerprint of a strain, which enables it to screen for functional properties such as texture, flavour, health benefits, and the probability of being able to produce it on an industrial scale.

"Stability is also key,"​ said Saadane-Oaks, and the company is presently conductin g research into how to improve the survivability of its strains.

Dansico's three "champion strains"​ are marketed under the HOWARU brand.

Beyond probiotics for supplements and fresh dairy, Saadane-Oaks said that the growth in cultures is also down to two fast-growing regions: Asia Pacific and Latin America.

While dairy consumption in Asia Pacific may be low compared to Europe and the US, Saadane-Oaks said the company has seen unbelievable organic growth. In China the growth rate has been close to 40 per cent for fresh dairy.

Danisco has invested in the region with its new culture creation centre in Singapore, which has cut down the delivery time products specifically for the Asian markets.

Previously, new products had to be created by teams in Europe and transport times meant that the progress could take as long as ten days. Now, with local resources, the work can be done in just five.

"This part of the world is into speed and reactivity. It is what the customer wants."

In Latin America, both fresh dairy cultures and cheese have performed well.

"Danisco is well positioned in the booming market,"​ said Fabienne. "We are getting results of marketing efforts there."

The company has been present in the market for many years, and has two plants in Guatemala and Columbia, as well as a new laboratory in Brazil.

Mexico, Brazil and Argentina are the three countries where Danisco Cultures has been experiencing a boom - and the latter in particular, a major market for dairy, has been picked up substantially since economic recovery.

Globally, Danisco Cultures is in the midst of a capacity expansion. The €7m expansion of its frozen palletised cultures facility in Niebl, Germany was completed in June, with production primarily targeting dairy but also the meat, bread and vegetable industries.

In France, more capacity expansion is underway for freeze dried cultures, with the aim of serving the whole world as it is relatively economical to ship these around the world. In particular, these will be shipped to Asia Pacific and Latin America, in order to follow up market growth. It is expected that this will be operational next year.

The third anticipated area of expansion is in Madison, USA, where a project has recently been approved for the company's facility producing both freeze dried and frozen cultures for the US market.

Saadane-Oaks said that although Danisco occupies the number two position on the global cultures market, behind Chr Hansen, it believes it is number one in dietary supplements and in fresh dairy it is a close call.

"Chr Hansen is active in market we are not,"​ she said, referring to cultures for wine and for animal feed.

Related topics: Market Trends

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