Natural colours raise 3Q results for Chr Hansen

Related tags Natural colours Compound annual growth rate Food processing

Danish ingredients firm Chr Hansen has benefited from the growing
demand by food makers for natural colours. Higher sales of natural
colours helped to lift profit figures in a third quarter that also
gained from the increasing popularity of probiotic cultures,
writes Lindsey Partos.

The company, which makes cultures for cheese and yoghurt makers worldwide, saw sales for the ingredients part of the group rise by 3.5 per cent from DK848 million (€114m) in 2002/2003 for the third quarter to DK878 million (€118m) for the equivalent period this year.

But operating profit for the period in the ingredients sector slipped from DK102 million to DK100 million for the third quarter this year.

Combined sales from the firm, which supplies a broad spectrum of the food industry from meat to confectionery, rose by over 6 per cent for Europe, South America and Asia combined, climbing to DK1.62 billion from DK1.52 billion last year.

"Sales of cultures continued the positive trend in Europe,"​ said the number one cultures maker.

But natural colours are also offering gains. As the functional food trend continues to soar, food and beverage manufacturers are increasingly on the hunt for natural colours - fuelling growth in the colouring foodstuffs market and outstripping the base line growth of the European colours market in general, valued at €195 million in 2001.

In the three quarter results reported today, the €2 billion firm notes the benefit of this growing trend. "The demand for natural colours for the beverage, confectionery and marmalade industries is also on the increase based on increasing consumer demand for this type of solution,"​the company said in a statement.

This is a trend that seems set to continue: according to Frost and Sullivan analyst Lyndsey Greig, the European colouring market is expected to experience a compound annual growth rate of only 1 per cent for the period 2001-2008.

"In contrast, the colouring foodstuffs market is currently experiencing growth of an estimated 10 per cent to 15 per cent, driven by consumer interest in natural products,"​ Greig said.

In addition to the influence of the functional food trend, the shift from synthetic colours to natural equivalents is underpinned by consumer suspicions that all E-numbers are unhealthy.

"Colouring foodstuffs include fruit and vegetable juices, concentrates and dried, powdered extracts. They do not contain any carriers or additives, and may be listed as ingredients, rather than as food additives,"​ she added.

Colouring foodstuffs include fruit and vegetable juices, concentrates and dried, powdered extracts. They do not contain any carriers or additives, and may be listed as ingredients, rather than as food additives.

While sales in the natural colours area were steady across South America and Europe, Chr Hansen reported stiff competition in the US from both synthetic and natural colours makers.

The Danish firm has seen growth in probiotics, an area currently enjoying the gains from the health concern boom, particularly in the dairy sector.

"New probiotic cultures have been developed for a large number of dairies,"​ said Chr Hansen​, adding that sales of cultures for the cheese and meat industries are also increasing.

Profit for the first nine months for the group as a whole - ingredients and allergy vaccine sectors combined - came in at DK150 million, up from DK134 million for 2002/2003.

Related topics Ingredients

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