AAK Annual Report 2018

17 Dairy+ – for dairy and plant-based solutions Dairy+, including the general dairy and ice cream segments as well as the plant-based dairy segment, continues to be a high-potential focus area, delive- ring great results for AAK as well as for our custo- mers. Here we speak to Henning Villadsen, Business Development Director Dairy, to get his opinions and insights into this exciting and dynamic market. Why is Dairy+ a focus area for AAK? Vegetable oils and fats offer a wealth of untapped potential for the general dairy and ice cream industries, especially within sub-industries such as cheese, yellow fats, whipped toppings, and ice cream. We also see the plant-based dairy segment as an extremely interesting growth opportunity with double-digit growth rates and a perfect fit with our plant-based expertise and heritage. What are the trends driving this market? Consumers today want healthier and more sustainable products. Flexitarianism is on the rise, with “Generation Z” and “Millennials” adding more plant-based foods into their diet. These people understand that what they eat has an impact on their well-being as well as the future of the planet. We are now also seeing older generations switching to plant-based foods, although they focus more on replacing animal-originating foods with a plant- based alternative. How do you help customers understand and tap into these trends? Through our co-development approach, we work closely with our customers to understand their needs and to keep our solutions in line with our own market and consumer insights. This is essential to create value- adding end products that deliver great taste experiences as well as many other benefits around our six value drivers: sustainability, health, sensory, functionality, cost efficiency, and food safety. How has AAK performed over 2018 within Dairy+? It has been an extremely good year for Dairy+ with double-digit growth, both in terms of volumes and oper- ating profit. All regions, North Latin America and Europe in particular, have contributed with positive results. Which new products and solutions have been developed during this time? Our Customer Innovation teams have developed some outstanding plant-based solutions, which have repeatedly shown our ability to help customers increase consumer brand loyalty and market share. 2018 was a record year for results from our Customer Innovation organization. What are the growth opportunities for AAK within this market? In only two years, Dairy+ has proved our potential for growth, with opportunities within plant-based dairy exceeding initial estimations. This potential is widely recognized and reported; every day plant-based activities are hitting the headlines with more and more consumers embracing this way of living. Hard market data also confirms the double-digit growth within all plant-based dairy segments. How will AAK help to shape the future of this market? Over 2019, we will continue to execute our successful strategy. We intend to put even more focus on our plant- based activities, which over the coming year will be supported by many different market initiatives that build upon our strong plant-based heritage. Health and sustainability – two important growth drivers for Special Nutrition and Dairy+ Henning Villadsen Business Development Director Dairy Innovation Go to Market Operational Excellence Special Focus Areas People AAK Way of Selling Customer Co-Development Sourcing Excellence Cost Effective & Flexible World Class Delivery Special Nutrition Dairy+ INNOBO - Products