Chr Hansen expands US dairy cultures production
cultures plant by 35 per cent in order to tap potential growth in
the probiotics market.
The $7.4 million upgrade to its culture plant in Milwaukee, Wisconsin is the largest single expansion in the plant's history, and completes a five-year $25 million investment plan.
"Our international company, headquartered in Denmark, has made an extraordinary commitment to the US marketplace where were already an industry leader," said president David R. Carpenter.
"This expansion will allow Chr. Hansen to offer customers a more highly technical production process and enhanced product development so we will be able to produce more and different products. We intend to introduce second generations of several of our popular products such as Easy-Set, as well as more innovations in probiotics."
The overall functional food market in the US market was worth $19 billion (16.2) in 2004, compared to 4 billion in Western Europe, with sales for fresh dairy products growing by between nine and ten per cent, compared to about two to three per cent in cheese.
Probiotics have been identified by the Danish company as a key growth sector on both sides of the Atlantic. But there is one specific niche - yoghurts containing active probiotic ingredients - where the US lags behind Europe.
It would appear that US consumers tend to be less receptive to the idea of ingesting live bacteria, however much the benefits are propounded.
But this also presents an opportunity. Indeed, market analyst Datamonitor recently maintained that the growth potential for functional food and drinks is huge, despite public hesitation over some products.
Datamonitor said that in order to tap this potential, companies need to build functional credibility. For product development, this means adding functionality with benefits that the consumer can see or measure.
Functionality should also be closely aligned with the product category. For example, a yoghurt is deemed a good vehicle for functional ingredients like probiotics as consumers already perceive yoghurt to be a healthy food. It is up to Chr Hansen therefore to consolidate this perception in the US.
The Danish firm clearly believes that this is a segment of the functional food market ripe for growth. At the plant in Milwaukee, a 30,000-litre fermentor is being added, with room to add another in the future. To follow design requirements, an upper penthouse is built with a specially designed roof hatch to allow installation of the new fermentors.
A second UHT (Ultra High Temperature Sterilizer) is also being added.
"An important part of this successful expansion has been a close global exchange with our colleagues in the Chr. Hansen culture plants in Denmark and France," said plant manager Greg Wyman. "By sharing and implementing each other's technology and production processes, we all can manufacture cultures at the highest efficiency, consistency, and quality."