Finnish better-for-you products business Raisio said it intends to shelve its 2022-2025 growth and profitability targets, following a year of flat sales in 2023.

In a statement accompanying its latest fiscal results, Raisio CEO Pekka Kuusniemi said “it is safe to say that achieving the December 2022 targets through organic growth is unrealistic”.

He added: “We will continue to promote the key priorities of our strategy in a systematic and sustained manner, now with a better understanding of the short-term market challenges.”

Net sales for the for fourth quarter 2023 were €54.2m, ($58.4m) a 2.5% dip on the same period the year prior.

Its financial targets for the three-year period had included hitting a 9% CAGR for the whole Raisio Group, and 11% CAGR for the combined net sales of its three core product areas: low-cholesterol Benecol spreads and yogurt drinks, value added oat products and ingredients such as Elovena oatmeal, and its plant protein brands including Härkis.

Regarding profits, Raisio had also looked to achieve a comparable EBIT rate of more than 13% of group net sales in 2025.

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It also intended to book total net sales exceeding €280m and comparable EBIT of more than €36m by fiscal year 2025.

Having initially set lower targets in 2021, the company revamped its growth strategy in 2022.

In a statement today (13 February), the company said it had been facing “slower than expected” short-term growth in the past year, “due to challenging market conditions.”

Raisio’s net sales plateaued year-on-year for the 12-month period ended December 2023, at €220m, a 0.6% drop on 2022.

EBIT for the 12 months rose 6.8% compared to 2022 at €19.1m but saw an annual decline of 47.6% in the three months ended December 2023, at €3.1m.

Finland remained Raisio’s biggest market, delivering 52% of its sales for the year. The UK saw 22% of sales, while other countries in Europe and the rest of the world made up 26%.

Commenting on Raisio’s performance, CEO Kuusniemi said: “The sharp fall in consumer purchasing power due to high inflation and rising interest rates caused major changes in the market environment during 2023.”

These difficulties included a drop in volumes, increasing consumer demand for cheaper and own-brand goods, making it a “surprisingly challenging” market for the company to navigate.

Benecol took a significant hit in Raisio’s portfolio. In the fourth quarter, net sales dipped 8.9% year-on-year at €26.2m and dropped 6.3% across the 12 months compared to the same point in 2022, at €106.5m.

The decline was particularly significant in the UK, it said, with inflation having a “significant impact on purchasing power and consumer demand”.

While the UK’s low-cholesterol products market dipped as a whole in 2023, the company said Benecol still retained “high” market share in the country.

Rasio’s plant proteins segment also recorded an annual decline of 17.7% in the fourth quarter at €1.2m and dropped 17.3% to €5.5m last January to December, compared to the same period in 2022.

It attributed the decline in the segment to the increasing competition in the plant-based protein market, with it having “been hit hardest by the current market turmoil.”

Despite the hit, Raisio stressed that it remained optimistic about the future of plant-based food “both in Finland and internationally” and did not intend to halt its innovation in the category.

The company’s value-added oat products and ingredients booked a 6.2% boost in sales in the fourth quarter at €14m, and a 12.8% annual increase across the 12 months, at €58m.

Last April, Raisio made changes to its executive board as part of a “comprehensive, long-term transformation program” which began in August 2022.