Food and Beverage Business

Raisio considers dropping “unrealistic” 2025 targets after disappointing sales year

Raisio considers dropping "unrealistic" 2025 targets after disappointing sales year Raisio Food and Beverage Business

Raisio, a Finnish better-for-you products business, announced its decision to shelve its growth and profitability targets for 2022-2025. This decision follows a year of flat sales in 2023. CEO Pekka Kuusniemi stated, “it is safe to say that achieving the December 2022 targets through organic growth is unrealistic.” While the company plans to continue promoting its strategic priorities, it acknowledges the challenges posed by short-term market conditions.

In the fourth quarter of 2023, Raisio reported a 2.5% decline in net sales, amounting to €54.2m. The company’s initial three-year targets included achieving a 9% CAGR for the whole Raisio Group and an 11% CAGR for the combined net sales of its core product areas. Additionally, Raisio aimed to reach a comparable EBIT rate of more than 13% of group net sales by 2025.

The company had anticipated booking total net sales exceeding €280m and comparable EBIT of more than €36m by the fiscal year 2025. Having set lower targets in 2021, Raisio revamped its growth strategy in 2022. However, the company faced a “slower than expected” short-term growth due to “challenging market conditions”. These challenges resulted in a year-on-year plateau in net sales for the 12-month period ended December 2023, at €220m.

The decline in net sales also impacted the performance of Raisio’s individual product segments. Notably, the company’s plant proteins segment recorded an annual decline of 17.7% in the fourth quarter.

Despite these challenges, Raisio remains optimistic about the future of plant-based food and continues to innovate in this category. The company’s value-added oat products and ingredients experienced a 6.2% boost in sales in the fourth quarter.

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

While Raisio assesses the impact of its decision, it is clear that the company is navigating a challenging business landscape. As the business evaluates its strategic priorities, it remains steadfast in its commitment to innovation and adapting to market dynamics.

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