So Good soy milk is among Wessanens brands

So Good soy milk is among Wessanen's brands

Wessanen CEO Frans Koffrie today (25 February) insisted organic food has long-term potential in Europe as the Dutch food group looks to rebuild after a tumultuous 2009.

The downturn has dampened organic sales, particularly in key markets for Wessanen such as Germany and the UK.

However, Koffrie said Wessanen, which has set out to focus on its organic food business in Europe, believed the "underlying" market would be strong.

Speaking to analysts after Wessanen reported a loss of almost EUR220m (US$296.8m) in 2009, Koffrie said organic food sales accounted for around 3% of all food sales in Europe, driven by organic advocates.

"We think going forward that mainstream customers will buy more and more organic products and the grocery channel will become more important. In five to ten years, the 3% [share] will go up and be a bigger share of the overall food market," Koffrie said.

Wessanen is looking to leave behind a 2009 in which the company saw its CEO leave the business due to differences over strategy and when the business faced challenges with its debt levels and falling profits.

The group is pinning its hopes on a focus on the European organic food market after offloading a slew of businesses in the US and plans to push brands like So Good and Kallo in the grocery channel and products including Bonneterre to dedicated health-food stores.

Despite Wessanen swinging into the red over the last 12 months, the company managed to cut its net debts from EUR215m in 2008 to EUR175m in 2009.

However, CFO Frans Eelkman Rooda indicated that Wessanen may look to strengthen its balance sheet to give the company the ability to make small acquisitions in Europe - and the resources to invest behind its current portfolio. Both executives, however, refused to be drawn on whether Wessanen would look to issue more shares in the business.

Former Procter & Gamble and Sara Lee executive Piet Hein Merckens will join Wessanen next month and is set to take up the role CEO in June.

Koffrie emphasised that Merckens was behind the company's ambition to become the "organic food champion" of Europe.

"In the process of finding a new CEO, it has been a very important subject - and it would be a very strange outcome if we had a new CEO who has different ideas about the future," Koffrie said.

Shares in Wessanen, however, tumbled 13.4% to EUR3.06 at 13:45 CET this afternoon.