Fazer Acquires Gluten-free Goods Produces, Closes Oats Plant

Fazer has announced the purchase of Vuohelan Herkku’s bakery and mill businesses, which strengthens its market reach in gluten-free bakery products. At the same time, the company announced it plans to close its Kaarina factory and move operations to the factory in Koria, Finland.

Fazer continues investing in growing product categories by acquiring Vuohelan Herkku’s bakery and mill businesses. Vuohelan Herkku is one of the forerunners of gluten-free baking in Finland and has a new gluten-free bakery in Lahti, built in 2018. Through the acquisition, Fazer becomes the market leader in gluten-free bakery products in Finland, the company says.

Fazer invests in gluten-free production as this market is expected to grow substantially in the coming years. “Acquiring Vuohelan Herkku strengthens Fazer’s position as the leading bakery in Finland. Through the acquisition, Fazer becomes the market leader also in gluten-free bakery products. We will renew Vuohelan Herkku’s product portfolio and integrate it into Fazer’s gluten-free assortment. The acquisition of Vuohelan Herkku is a natural move for us when executing our strategy. We will become a very strong player in the growing gluten-free market when we exploit Fazer’s strong brand and combine Fazer’s and Vuohelan Herkku’s know-how,” said Christoph Vitzthum, president and CEO, Fazer Group.

Vuohelan Herkku’s geographical location near Fazer’s bakery in Lahti enables efficient and reliable use of Fazer’s national distribution network.

”I’m pleased that my life’s work as an innovator of gluten-free products continues. Along with the acquisition, the business will develop further, and more gluten-free options will become available in the market. For us at Vuohelan Herkku, it is important that we share the same values with Fazer. High quality and domestic origin are highly significant to both of us,” said Pirkko Hämäläinen, managing director and the main owner of Vuohelan Herkku Oy.

Gluten-free products represent approximately 3% of the total bakery market in Finland. The market is estimated to grow significantly in the coming years. Around 2% of the Finnish population is affected by celiac disease and at least one out of 10 Finns suffer from IBS (Irritable Bowel Syndrome). In addition to those suffering from celiac disease, many people with sensitive stomachs have experienced that a gluten-free diet is suitable for them and relieves their stomach symptoms.

Closing Kaarina Factory 

On the other hand, Fazer has evaluated different options for increasing efficiency in the production of the Fazer Yosa oat products and for enabling growth, and it plans to close the production facility in Kaarina and to move its operations to Fazer’s factory in Koria. Fazer will start collaboration negotiations affecting all employees at the Kaarina factory. Expanding and modernizing the factory in Kaarina to meet the large-scale food production required by the growth of the oat business would require sizeable investments that, given the factory’s current location, would be difficult to carry out.

“Non-dairy oat-based products play a key role in the growth of our business, both domestically and internationally. The total market for non-dairy products in Western Europe is growing at a yearly rate of over 17%. Our chief assets in the tightening competition are our strong expertise in the oat business, our consumer-centric product range and our strong brands. At the same time, we need to secure our positions in the face of stiffening competition; assure the competitiveness of our production; enable essential additional investments into production; and meet the tightening quality, safety and environmental requirements,” said Heli Anttila, VP supply chain and operations at Fazer Lifestyle Foods.

Fazer employs 23 permanent people in Kaarina as well as a staff of 25 with fixed-term or on-call contracts. The possible closure of the Kaarina factory would take place in autumn 2020. Fazer will support the staff affected by redundancies.

“Increasing the efficiency of our production is necessary to our competitiveness. If we were to settle on closing the factory in Kaarina, we would want to secure for everyone the best possibilities for re-employment. We will liaise with the local employment administrations and offer employment at other Fazer units, where possible,” Heli Anttila added.

The dairy-free oat-based Fazer Yosa products are part of the Fazer Lifestyle Foods Business Area.