Fazer

From taste sensations to food with a purpose — crafting Fazer’s new growth logic

For generations, Fazer has been a successful company with a strong heritage in innovation, iconic brands and close consumer dialogue. Yet, finding growth within the conventional food market had become harder due to market saturation, and at the end of 2016, Fazer decided to redefine its strategy for 2022. This task was given to Marketing Clinic.

The Outcome

Working together with Fazer, Marketing Clinic crafted a transformational strategy in the autumn of 2016. The outcome of this work was a new definition of Fazer’s larger purpose, its future competitive advantages and growth logic, as well as a crystallization of the company’s heritage. Fazer’s redefined strategy, launched in 2017, is deeply rooted in strong consumer trends of e.g. health and well-being and plant-based diets. Concrete outcomes of the redefined strategy included a newly established business, Fazer Lifestyle Foods, as well as the acquisition of the fruit company Froosh.

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This new mission modernizes the whole company — from taste sensations to food with a purpose. In combination with the strategy execution, the new mission enables Fazer to think and act more boldly as a company and to execute the strategy more effectively.

Identifying new sources of growth

Fazer and Marketing Clinic have a long history of cooperation. Fazer was Marketing Clinic’s very first client, and the partnership has continued ever since. At the end of 2016, Fazer decided it needed to redefine its strategy for 2022 in order to find new growth opportunities in the changing landscape of the conventional food market.

“The food landscape is rapidly changing, and in today’s global competitive environment, to be successful, companies need to find ways to stay relevant in consumers’ lives. Only by being meaningful can a company grow. During the past 40 years, Fazer had been focusing on its core businesses, and now, it was time to identify and pursue new areas of growth”, Christoph Vitzthum, Fazer Group President and CEO explains.

“Food is the largest global industry. The transformational strategy enabled Fazer to identify its future focus areas and competitive advantages to ensure strong future growth. Fazer has a strong ambition to create value for its stakeholders and to double the value of the company, which requires understanding where to play and what to focus on”, Vitzthum continues.

A license to think beyond “taste sensations”

Fazer is strongly established in Finland with active operations also in Scandinavia, Russia and the Baltic countries as well as some export markets, e.g. the US. Future geographical growth will be focused in Northern Europe. In the strategy work, identified competitive advantages and new sources of growth were crystallized to form Fazer’s growth logic or mission — Food with a purpose.

“Fazer achieved great results through its previous mission of creating ’Taste sensations’. It had become a strong part of the Fazer DNA. Even though Fazer will continue to create taste sensations in the future, this mission was in a way already achieved and had become static. We needed something more dynamic, something bolder, a growth logic that could help us reach growth targets and expand our business. ’Food with a purpose’ gave us a license to think beyond taste sensations to further unleash innovation. We needed to carve out a growth strategy that would combine our traditional strengths with new business and fresh thinking”, Vitzthum says.

Fazer’s new growth logic synthesizes the consumer trends of sustainable and ethical consumption and holistic well-being as well as meaningful experiences and self-expression. “Food with a purpose” also focuses on storytelling and distinct moments spent with food — taking experiences beyond the actual product.

“The recent celebration of Finland’s 100th year of independence demonstrated the emotional bond consumers have with Fazer. There is an immense number of anecdotes, especially from Finnish expats, for whom the Fazerin Sininen chocolate is a symbol of Finland. In a world where consumers want to express their individuality, these products are very important. Fazer, as a company, has both the potential and the obligation to think ahead and show the path forward. We don’t want to be reactive followers”, Vitzthum explains.

The new mission “Food with a purpose” was launched internally and was embraced by Fazer’s 15,000 employees as well as external stakeholders.

“It is amazing how the new mission works on so many levels and how it has come alive within the company. The organization wants to be associated with it. Meanwhile, the customers, i.e. retailers and consumers, see this growth logic as extremely interesting and innovative. Consumers associate themselves with the mission and see Fazer as a relevant brand. This new mission modernizes the whole company — from taste sensations to food with a purpose, from a conservative company to a dynamic company. This change was visible before any strategic development had been communicated. I state, that this mission, in combination with the strategy execution, enables Fazer to think and act more boldly as a company, and to execute the strategy more effectively”, Vitzthum declares.

Growth by executing the transformational strategy

The transformational strategy has led to concrete outcomes in Fazer’s pursuit of growth. “The most concrete outcome is the newly established Fazer Lifestyle Foods, which will focus on offering plant-based foods for consumers. In our strategy work, vegetarian diets were identified as a strong growth opportunity and a permanent trend, not a fad, both from sustainability and health perspectives”, Vitzthum points out.

The growth logic has broken down internal mindset barriers, giving the company the possibility to consider food in a new, more functional context. “For example, in the Bakery portfolio, the highly successful Fazer Juuresleipä would probably have remained a niche product without our revised strategy. Now, this functional bread, as a forerunner in our bread portfolio, has accelerated the innovation of similar products”, Vitzthum explains.

Another example of progressive product development is the newly launched Fazer Cricket Bread. Vitzthum continues, “If it wasn’t for the new mission, Fazer Cricket Bread would probably have been too bold of an initiative to launch under Fazer Bakery”.

Furthermore, the strategy work has guided Mergers & Acquisitions. “In the autumn of 2017, Fazer acquired the fruit company Froosh, an acquisition strongly aligned with the new strategy. The transformational strategy has further accelerated our new product development as well as our ambition to decrease our use of additives”, Vitzthum states.

The new strategy for 2022 was launched in 2017. In the years ahead, Fazer will continue to execute its new strategy and to grow through “Food with a purpose”.

“Fazer is a family company with a heritage of long-lasting partner relationships that are based on trust. Marketing Clinic is a dynamic company fearlessly developing its offering to respond to customer and market needs. In today’s world, companies most often need specialized guidance and less general advice. Marketing Clinic has successfully captured and contained its core competency while expanding as forerunners in new areas such as digitalization”, Vitzthum states.

Marketing Clinic’s core team on the project: Erika Kavén, Consultant; Catharina Stackelberg, Group CEO, Marketing Clinic Partners; Mika Rytkönen, Managing Director, Marketing Clinic Finland; Heli Hytönen, Manager and Charlotta Välimäki, Senior Associate. Missing from the image: Joakim Köhler, Manager