In the third quarter, the business environment remained very similar to the second quarter. Due to the economic uncertainty and the slow decline in inflation, price remains a key driver of consumer choice, but consumer behaviour also continues to show signs of a budding resurgence of responsibility, convenience and wellness. Falling interest rates and rising purchasing power are paving the way for this trend to gain momentum.
There is variation between geographical areas in both consumer and retail behaviour. While Nordic retailers are increasingly seeking to serve other needs in addition to price consciousness, most English and Polish chains, for example, still focus heavily on price alone. We will not allow ourselves to rely on the recovery of the external environment; instead, we will actively seek growth and efficiency improvements ourselves, regardless of changes in the world around us. Our strategy work is progressing on schedule, and we will present our updated strategy during the first quarter of 2025.
Raisio’s products have a solid foundation, which is developing positively. Our growth has remained consistently strong and volume-driven also in the third quarter. Strong market positions and brands in our main markets are reducing our exposure to unhealthy price competition. At the same time, however, the market situation is slowing down our establishment in newer markets, as consumers’ willingness to try new products has declined.
Overall, we have witnessed a tentative decline in raw material prices this year, even though there have been divergent trends across product groups and cost items. As price volatility is expected to continue, the ability to anticipate and react remains important. Grain yields have been normal in terms of quantity, but the quality varies considerably. On the one hand, grain prices reduced our costs, but on the other hand they also increased price competition, especially in B2B channels, weighing on our profitability in the quarter. The comparable EBIT for the quarter is also impacted by the provision for retrospective payments to the authorities, without which we would have been very close to last year’s level. Our investments in future growth were also higher than in the previous year, as planned.
We have entered the last quarter of the year in good spirits. Breakfast oatmeal, snacks and heart health are popular all year round. Therefore, demand for our products is fairly stable throughout the year and we are not dependent on seasons, like many other food companies. As a result, the food industry’s holiday season is not causing us any holiday stress. Getting ready for the increasing regulation is a lot of work, but we believe that the Corporate Sustainability Reporting Directive, for example, will make our long-term sustainability efforts more transparent and allow us to also make better commercial use of them in the future. The last quarter of the year will also be partly spent preparing for the celebrations, as next year Elovena® will be 100 years old and Benecol® 30 years old. The celebrations will be reflected in both brands next year. The anniversary of the Elovena® brand in particular will be strongly present in everything we do right from the start of the year.
Looking back, I can say that I am also satisfied with the third quarter. Raisio’s employees have continued their good work in creating new solutions to build a healthier and more sustainable future and improving our efficiency. Thanks to them, the Benecol® brand has continued to grow in our largest markets in the UK and Finland, Elovena® has broken sales records in Finland and we launched Elovena® snack biscuits in September in ICA stores in Sweden.
As the Swedes say: Havre bra!
Pasi Flinkman
CEO, Raisio plc
November 2024
Raisio’s products have a solid foundation, which is developing positively. Our growth has remained consistently strong and volume-driven also in the third quarter.