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Recipe for success
31/03/2006 | Channel:
Packaging & Logistics
Norfoods group is an organisation that distributes ingredients for the Nordic food industry
Operating in the Nordic area, which includes Norway, Denmark, Finland and its
home nation of Sweden, the Norfoods Group is a distributor of food ingredients, with a number of extra activities that support the main system making it one of the key operators in this regional market. With an aim to become the biggest operator in the Nordic nations the company is looking to work with the largest suppliers and manufacturers in the region, and become an integral part of the smoothest run and widest reaching supply chains.
The group has been built up from a single Swedish company, ABR Lundberg, which was founded in the 1920s, and had established a strong reputation within the local market. Over the companyís history it has been involved in several important
breakthroughs in the industry, introducing aspartame together with Nutrasweet in the
1980s and was integral together with Cerestar in the conversion that jam and marmalade producers made from sugar to glucose syrup when the Nordic countries
joined the EU.
In 1983 Torbjorn Malmsjo and Anders Brantberg bought the company, and since
then it has been expanding its boundaries, initially selling across Swedenís borders
from its original site, then buying extra facilities in the other Nordic countries.
The current MD of Lundberg, and one of the two men who bought the company,
Torbjorn Malmsjo explains how the group has made the other Nordic countries a part of its target market: "From '83 until the mid 90s we worked solely from the Lundberg company, as a food ingredient importer and supplier. But then we started to think that it might be a good idea to regard the Nordic region as one market, which meant that we had to get a better coverage over the whole area. We started by acquiring some smaller companies in Sweden and integrating them into Lundberg, as well as buying an operator in Denmark, which we restructured and refined down to just the ingredients division. In Norway and Finland we started from scratch and have been building them up over the last few years."
The first side of the group was based in Sweden, and therefore Norfoods sees the
main part of its business taking place there; 63 million of the groupís total annual
turnover of 83 million euros is generated by ABR Lundberg. The move to the other
areas was made in the last ten years: it moved to Denmark in 1997, Norway in 2000 and Finland in 2003. This means that the group is still working to establish itself in the newer markets and achieve its goal of conquering the whole Nordic region. "In Sweden, we like to think that if you can find five producers, that operate on an industrial level, that we donít sell anything to we will be very disappointed; so we basically sell to all aspects of the market here. In the other countries we are more of a newcomer and we see ourselves as the underdog, we havenít got the same
penetration yet, but we are working on it."
The current aim for the company is to develop its footprint on the Nordic area, in
order to become as strong as it is in Sweden in each of the different countries. It is part of an initiative across the group to unify the product portfolios and suppliers
for the separate countries. "Getting the four companies to work with the same
people has been a hard task to achieve," continues Torbjorn. "There is always a
situation where a manufacturer has traditionally had one agent or distributor in
each country. Weíre trying to change that, because we see that it makes more sense
for them and for our suppliers, as well as for us, to have one just one person to deal
with at each end. Our plan for dealing with this is to strengthen each local platform,
because if a supplier wants to access the smaller or medium sized parts of the
market it needs to have a local representative, which is what we offer."
The group currently offers a range of ingredients from a number of different
suppliers. In total the products portfolio consists of 1700 items, of which 900 are
active. The items can be divided into several categories, all used in various stages of food production. One of the largest groups is the thickener and stabiliser range which consists of almost every variety of starch, including a number of specialist types. As well as these items there is the protein group, the sweeteners, and what is referred to as the colonial products, which include almonds, hazelnut kernels, coconuts, tomato paste and dried fruit.
In order to compliment the full catalogue of products that the Norfoods Group has on offer, it has begun to branch out and supply a series of blended ingredients and madeup recipes to its customers. This operates as a vital addition to the service that the group already has in place, so that its clients get a more complete product to
work with. The move towards this new activity has been made through external
operators, employing people who specialise in mixing and blending. "We are using
existing blending companies, regarding them on the basis of who is good at what,"
says Torbjorn. "We have, at present, five or six operators that we work with. This
means that we can make subtle spice blends with one, and then dairy mixes with
another, because you canít have the two in the same factory; we try to choose the
best site for that particular blend, while we supply the recipes and customer contacts."
Another additional activity that the group has moved into is the packaging side of the
business. It has always been a facet of the Norfoods Group, taking in bulk quantities of a product, portioning it into consumer-sized amounts, then sending the packets out to retail outlets. "The packaging side of the business has been growing a great deal over the last few years," explains Torbjorn. "Out of the items that we package there has been an increase in the colonial produce business, so almonds, hazelnut
kernels, coconut, raisins and so on. These products are packaged at our site, mostly
for private label suppliers, for sale in the large retail giants, and due to a surge in
activity in this area recently we have been seeing an increase in work for this part of
"This has been most noticeable in the last two years, partly thanks to the retail giants in the Nordic countries, but itís also because of a rising demand on the market
for almonds and hazelnut kernels. The increase of activity in this sector has meant that, over the last two years, the packaging has been generating approximately 15 per cent of the total annual turnover, making it one of the key features across
the whole group."
The future of the company, although it will involve adding capabilities like this, and
the blending service, will not be aimed at changing its focus, which has always been on the food industry. Any additions that are made to the Norfoods Group will be
intended to compliment its existing systems, and help the companies become
more attractive prospects for suppliers and manufacturers. With some movements
towards other countries, following clients further into Europe, the key intention is still
to dominate the Nordic market. "Weíve got to continue our efforts in this area so that we can get a turnover of above ten million euros in each country, and be counted as one of the biggest players in the regional market," says Torbjorn.
With this at the forefront of the groupís business strategy, and a desire to become
involved with new, breakthrough technologies and advancements in the food
industry, the Norfoods Group is set to fulfil its target of cementing its place in the Nordic market. Building on its regional success the group is prepared to widen its
capabilities to meet the needs of the four countries. "We have the biggest range, we
have more sales people out there than anyone else and we have more technical
know-how than most of our competitors. The group is, in a way a middleman, and
our speciality is being able to add value both to our suppliers and to our customers,
and thatís what people want," concludes Torbjorn.