Nutrition
While the culinary culture in Nordic countries is markedly different than in the rest of Europe, the scientific approach of nutrition, and the connection of food with health effects (both negative and positive) has been emphasised very early.
In technology intensive economies like Nordic countries, this led to major innovations from the 1970's onward that gave birth to a world leading Food ingredient and Functional Food industry.
Today, as health claims are gradually becoming the key focus for new product launches and regulations are stricter, large food processing companies adapt their strategy and gain health related expertise, to secure and strengthen their market position in a worldwide functional food market forecasted to reach $128 billion by 2013 (+76% growth from 2007, PricewaterhouseCoopers survey 2009). At the same time, smaller companies with no history in food processing and created following an innovation, focus on niche markets.
Finland, Sweden and Denmark are leading countries in this field, each of them with its own fields of expertise. Norway also has its specialities while Iceland and Baltic countries are emerging producers and markets, gradually adopting the Nordic model and innovation strategy with more limited ambitions.
Expertise heavily connected to traditional food productions
Unsurprisingly, new products and innovation have been heavily based on local raw materials and existing productions.
Denmark is the main regional exporter of processed food; its production covers the needs of almost 4 times its population. It is for example the 5th producer of pork meat in Europe. Other countries are not as much export oriented, and most of the time only a few types of products are exported (for example, 95% of Norway's fish products are exported, the other productions are chiefly sold on the home market).
Dairy is important all around the region. Once fully limited to their home markets, the biggest firms are now very active abroad, competing also in the Nordic and Baltic region with each other. Swedish-Danish Arla (8th biggest dairy firm in the world) has for main competitors Finnish Valio and Norwegian Tine, with a large number of medium sized dairy industries relying on innovation to create a competitive advantage.
In all countries, beverage sub sector includes a significant brewing activity, Danish Carlsberg group being the biggest brewer in the region and the 4th in the world.
Besides Danish Crown, the biggest pork meat process company in Europe, there are many large meat processing and ready meals companies like HKscan, Atria or Nortura.
Bakery and cereals processing are strong activities everywhere but in Iceland, with different crops and specialities. Finland is the second producer for oats in Europe, rye is a major crop in the Baltics and in Finland, wheat is more common in southern Sweden and Denmark. Major companies include Swedish Lantmännen and Finnish Fazer. Swedish-Danish ArhusKarlshamn is the regional leader for vegetable oils.
Besides these main fields of activity, a few speciality productions are also of interest for their nutritional properties, like red berries used for their antioxidant effects, mostly in Sweden, Finland, Norway and Estonia.
Innovation as a competitive advantage on domestic and export markets
A few spectacular successes on global markets can be highlighted in Nordic nutrition companies' history. Xylitol has been lauched from Finland in the mid-70's, Raisio's Benecol, based on plant stanol esters that reduce cholesterol levels, has enjoyed a wide success from the early 90's.
A 2006 poll among Danish food companies has shown that 70% of them have a clear innovation strategy, and 10% are considering to set up one. Fairly similar figures are obtained in neighbouring countries. A greater focus on health properties is often quoted as the first priority.
Innovation in nutrition concerns all the economic players. Big companies, Universities and research centres, but what is a characteristic of the region is the large proportion of medium-small innovative companies.
Newer companies have been created from research organisations, or benefit very much from their proximity with them, like Oatly with the University of Lund.
Older food companies often find in nutrition innovation a way to survive on markets where they have to face huge multinationals. A good example of that strategy is Swedish Skånemejerier. Despite having a dairy market share in Sweden almost 10 times lower than Arla, it has never stopped its active development of new healthy products and now gains market share.
Even the smallest companies can have access to innovation, mostly as the states support heavily applied research organisations to which companies may outsource part of their research work. This strategy is particularly true in smaller countries, where the companies often lack the critical size to start ambitious projects - especially as proving health claims for a new product is getting somewhat trickier and expensive. In Estonia, the competence centres (2 of them specifically in food, ex Bio-Competence Centre of Healthy Dairy Products) are in charge of the most challenging applied research.
The formulation of new products requires a growing expertise on processing and ingredients. Denmark is a key player on the global market of food ingredients, and particularly is the world leader when it comes to food enzymes. The best known ingredient and enzymes companies are Danisco, Novozymes and Chr Hansen.
For foreign providers interested on these markets, the rules are the same. The consumers have a very positive attitude towards innovation and are eager to discover new tastes and foreign food products (the overall food imports have grown by more than 10% a year in average in most countries during the year 2000's). The wide network of research partners and local companies eager to innovate has to be seen as an asset, building partnerships or adapting a product to local taste and request remains fairly straightforward with proper local partners.
Iloxia supports you through this partnering process and helps you in boosting your sales on these markets.
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