Finnish food group Raisio is looking to expand the presence of its Benecol brand in emerging markets, with South America and Asia at the forefront. The company today (4 September) launched its Benecol yoghurt drinks in Hong Kong. Katie Smith spoke to Mikko Laavainen, vice president of Raisio’s licensed brands, who outlined the group’s mid- to long-term growth strategy for the Benecol business.
Hong Kong has become the latest market for Raisio’s Benecol brand. The Finnish food group has launched yoghurt drinks under the brand in the city, its latest push to broaden Benecol’s reach in emerging markets.
Mikko Laavainen, who holds responsibility for Raisio’s Benecol business, tells just-food Hong Kong’s rising population, like in many developing markets, made it an attractive one to enter. However, Laavinen also said Hong Kong’s regulatory framework made it a target for the business. Hong Kong is still following European and UK regulations, he explained, making it easier to enter the city.
The yoghurt drinks, which are available in strawberry and blueberry flavours, are being produced by Swiss dairy giant Emmi in Switzerland and are available in major retail chains and department stores across the country.
For the time being, Raisio is focused on just distributing the Benecol yoghurt drinks in Hong Kong but Laavainen adds: “If all goes as planned, we will evaluate other options to widen the range in the future but now we are focusing on these two products.”
Laavainen says Raisio faces local competition in Hong Kong but, crucially, he adds: “The same competitors we are having in Europe are not present.”
The move into Hong Kong is part of Raisio’s wider plans to expand Benecol into emerging markets. Laavainen is coy about specific targets but says the company is eyeing the growth of large middle classes in developing markets with interest.
“We are convening negotiations in many market places and we are especially focusing on Asia and South America,” Laavainen says.
“I think that the feeling in emerging markets [is that] the middle class is still very sizeable and combine[d] with the growing problem of elevated cholesterol – it’s still a very attractive target audience for Benecol’s products so we still believe that there is a good opportunity,” he adds.
The Benecol brand is not yet present in China but Laavainen says Raisio is “actively working” to take the product onto the Chinese mainland. “China is an attractive opportunity and we are continuing discussions on possibilities at some point to enter but we will tell when we are ready to launch.”
In terms of sales, Laavainen says Europe is by far the biggest market for its Benecol brand area but adds emerging markets are where the company are seeing the “highest growth numbers”.
Raisio earlier this month said its Benecol sales fell 12.5% in the first half of the year amid lower volumes in the US. However, sales were up in markets like Chile, Indonesia and Ecuador.
Laavainen says Chile is a “growing market for us”, with combined sales in Chile, Colombia and Ecuador currently representing 10% of Benecol’s total sales.
“And of course there are still countries we are looking at like Brazil as part of the BRIC countries,” he notes, adding it is “an interesting market, where we are looking at opportunities for how to introduce Benecol”.