Plant-based drinks: Fazer considers productional changes

Helsinki / FI. (fg) The slowdown in consumption growth, in combination with increased production capacity in Europe, has led to a more competitive market situation in plant-based drinks. This development requires Finland’s Fazer Group to seek efficiencies to secure its competitiveness. Therefore, Fazer is considering consolidating its production by making its Tingsryd factory in Sweden the centre for oat drink production, while the Koria factory in Finland would focus on producing oat-based gurts. Due to this, Fazer initiates change negotiations that could lead to the termination of 93 employments in Finland.

The demand for plant-based products has steadily increased over the last decade, as consumers’ interest in healthy and sustainably produced food has grown. Today, numerous companies compete in this market globally. In particular, the oat drinks market has experienced strong growth in recent years, and nowadays there is a wide range of product options available for consumers.

However, in the last year, the growth in the consumption of plant-based drinks has slowed down in the Nordic countries. Consumers are more price-conscious, and the market has become increasingly campaign-driven. Furthermore, several recent investments made by existing producers, as well as new producers entering the European market, have led to increased capacity and strong competition.

To ensure its competitiveness in the plant-based drinks business and to increase focus at both of its factories, Fazer is considering consolidating its production by making its Tingsryd factory in Sweden the centre for producing oat drinks, while the Koria factory in Finland would focus on producing oat-based gurts, with the intention of starting exports to international markets in the years to come.

«Our two factories have different profiles. In Koria, we have great capabilities and know-how to produce high-quality oat-based gurts, whereas in Tingsryd, we have decades of experience and very efficient and streamlined processes to produce oat drinks on a large scale. With these changes, we would be able to increase the focus in both factories and secure our competitiveness also in the future», says Kati Rajala, VP, Plant-based drinks, Fazer Lifestyle Foods.

Despite the current slowdown in growth, the consumption of plant-based products is expected to grow in the coming years, and Fazer is strongly committed to the development and production of oat-based and other plant-based products also in the future. Fazer uses high-quality Nordic oats in its products and has unique manufacturing expertise and outstanding ability to innovate new, oat-based products.

Koria factory would focus on developing and producing gurts

If the plans would realise, the production of Fazer Aito oat drinks and cooking products done in Koria would gradually be moved to the Tingsryd factory during the coming year, and it is estimated that production would cease in Koria by the autumn of 2024. Koria factory would focus on Fazer Aito gurts which are plant-based products made by fermenting from oats and can be used similarly to yoghurt.

«Oat gurts have established their position as breakfast and snack choices. In Finland, the consumption of Fazer Aito gurts is on the rise, and we already have around 20 percent market share. We see good international growth potential for gurts and our Koria factory is well-positioned to respond to this growth due to our highly skilled personnel and the state-of-the-art facility», Rajala continues.

Fazer initiates change negotiations and supports its personnel

Possible productional changes would have an impact also on the personnel. Therefore, Fazer initiates change negotiations on financial and production-related grounds, and due to re-organization of operations. The change negotiations affect 133 employees in the plant-based drinks organisation in Finland, and it is estimated that the negotiations could lead to the termination of a maximum of 93 permanent employments.

Rajala: «If these changes would realise, we would do our utmost to support our employees in Koria and help them find new jobs. Vacancies in other Fazer Group units would be offered with priority to those employees whose employment would possibly be terminated. We would collaborate with partners, such as local employment administration, educational institutions, and re-employment coaching partners.»

Fazer Lifestyle Foods is one of the pillars

Fazer Lifestyle Foods responds to the growing demand for healthy and plant-based food, especially among consumers who follow sustainable lifestyles. It offers modern consumers a variety of plant-based products, such as oat drinks, breakfast products, and smoothies. The product range also includes flours, mixes, and ingredient solutions like xylitol for businesses. Fazer is a forerunner in oats and has made significant investments in the product development and production of oat-based products. Fazer Lifestyle Foods is one of Fazer Group’s three business areas. In 2022, it employed approximately 700 people and net sales totalled EUR 260 million.