Business model, strategy and markets
The HOCHDORF Group is one of Switzerland's leading food companies. The company operates in the areas of milk derivatives, baby care and cereals & ingredients. The Group's core area of expertise lies in developing, producing and marketing powder products based on milk and whey, as well as producing and marketing high-quality cereals. With its participation in Uckermärker Milch GmbH, HOCHDORF is also operating in the butter and curd business in Germany.
HOCHDORF concentrates its activities on its business areas Dairy Ingredients, Baby Care and Cereals & Ingredients. As an international food company, the entire Group identifies with the typically Swiss values of «reliability», «quality» and «precision». Today, the Group largely operates in the business-to-business sector. The Group targets its products at rapidly growing, non-saturated markets. In the process, HOCHDORF focuses on the premium segments and offers its customers correspondingly high benefits and service.
The roots of the HOCHDORF Group lie in the production of different milk powders. In 2015, this business unit was responsible for around three quarters of gross sales revenue. The following companies form part of the business unit Dairy Ingredients:
- The Dairy Ingredients Division of HOCHDORF Swiss Nutrition Ltd operates mainly in Switzerland. With its years of experience, the company specialises in products with dairy ingredients. It is an important supplier of cream, roller-dried whole milk powder, fat powder, milk and whey protein powder, whey powder and permeate powder to the (Swiss) food industry.
- HOCHDORF Baltic Milk UAB is based in Medeikiai (Lithuania). It develops, produces and sells powder products from milk and whey. The company's focus lies on milk filtration and milk drying processes. The majority of the products are exported.
- Uckermärker Milch GmbH, Prenzlau (D), processes milk to make butter, curd and dried milk products. The products are sold domestically and abroad. The HOCHDORF Group owns a 60% share of this company.
HOCHDORF also has a long tradition in the production of infant formula stretching back many years. Greater emphasis has been placed on its global focus since 2006. In 2015, the HOCHDORF Group earned around one fifth of its revenue with infant formula.
- The Baby Care Division of HOCHDORF Swiss Nutrition Ltd exports more than 90% of its products. Its products include a broad range of milk products made in Switzerland for pregnant women, infants and young children. The products are exclusively located in the premium segment.
- The HOCHDORF Group holds a 60% stake in HOCHDORF Americas Ltd. The company sells HOCHDORF infant formula in Latin American countries.
Cereals & Ingredients
The fields of activity covered by this area came to the Group via acquisitions. The companies operate in niche markets with healthy products.
- Healthy VIOGERM® wheat germ products form the centrepiece of the Cereals & Ingredients Division of HOCHDORF Swiss Nutrition Ltd. The company occupies a leading position in the market for stabilised wheat germ and wheat germ oil. The product range is rounded off by Femtorp® instant iessert products as well as various cereals for the baking industry. This company frequently works with its customers to develop new healthy consumer products.
- Marbacher Ölmühle GmbH, Marbach (D), has been producing various organic vegetable oils since 1899. In the process, the company sets great store by the origin, quality and traceability of its oil seeds as well as gentle processing and filling.
- HOCHDORF South Africa Ltd based in Cape Town was set up in 2015. The company develops, produces and sells high-quality chocolate to corporate clients and consumers exclusively on the African continent. Through this activity, HOCHDORF is aiming to achieve even greater expertise in the development of specific ingredients for the chocolate industry. The HOCHDORF Group owns a 90% stake in this company.
Gross sales revenue by region
Strategy 2016 – 2020 sets new priorities
Our goal is to turn HOCHDORF into a global, profitable niche company with premium products, by 2020. As a company operating in certain niche markets, HOCHDORF wants to preserve the agility of a mid-sized company and show the entrepreneurial spirit required to conquer new markets.
Forward integration, i.e. taking a step closer to the consumer, forms an important part of the new strategy. The company is initially aiming to take this step in the Baby Care Division. Joining forces with customers in the MEA region and/or Asia represents the ideal scenario. The intention is also to establish the company's own brands.
The development and marketing of new, high value-added products represents a second major step towards achieving the company's goal. The new products focus on customer benefit and offer high added value; for example, they include base powders for producing infant formula or instantised milk powder.
In every market, HOCHDORF positions itself as a specialist with its products. Proximity to its partners and its high degree of flexibility enables HOCHDORF to differentiate itself from other market participants through its integrated product and marketing concepts. In order to attain the goals it has set itself, every business unit will develop such premium products and use them to establish itself in its target markets.
The aspiration to operate in premium segments is matched by correspondingly high quality standards in HOCHDORF's production facilities. The aim here is to optimise production processes and quality assurance. The efficiency of existing processes is regularly reviewed by means of key indicators. A further objective involves optimising the supply chain throughout the entire Group.
The HOCHDORF Group is aware that many natural resources and a lot of energy are required for the production of its products. We aim to treat all resources sustainably and in ways that are environmentally friendly. Among other things, we make sure that plants are highly energy efficient when we commit to new investments.
Strategy and markets for Dairy Ingredients
The aim is for the Dairy Ingredients business to develop on a sustainably global level from a strong Swiss base. Cooperation between the four milk plants, Hochdorf, Sulgen, Prenzlau and Medeikiai, will be optimised to the greatest extent possible and the product portfolio sensibly combined.
We want to defend our market position in Switzerland, including in the area of roller-dried whole milk powder. As a Swiss expert for roller-dried whole milk powder, we are planning to make global capital from this knowledge. At the same time, we want to develop, produce and market new products with high added value across all our production plants. We position new HOCHDORF products as a premium alternative with corresponding service in the markets.
The aim with all our activities is to pay attention to the various underlying conditions and build them sensibly into the operational implementation process. Milk procurement represents an important element here. It is to be adapted to fit with the requirements of the production facilities.
Strategy and markets Baby Care
The Baby Care business unit is globally structured and we plan for it to achieve further growth with existing customers in Asia, the Near East and Africa. We are looking for new partners, above all in the emerging markets of Latin America and in larger Asian countries where HOCHDORF is not yet operating. In the medium term, the Baby Care business unit wants to reach closer to the consumer in the value chain with its own brands in selected markets.
On the production side, we want to optimise existing capacity for the production of infant formula. At the same time, we will adapt production capacity to meet the high demand. That is why planning has already started for a new spraying tower line. The new spraying tower line will be built in Switzerland due to the high demand for Swiss-made infant formula.
At our Prenzlau facility, we are planning to produce basic products for the production of infant formula that the market is asking for. Several global partners are interested in such high-quality products for making infant formula. Production of these base powders represents a first step in establishing the expertise to produce infant formula at the Prenzlau facility.
Strategy and Markets Cereals & Ingredients
The Cereals & Ingredients business unit occupies a strong position in the domestic market of Switzerland with its gently pressed VIOGERM® wheat germ products. The challenge is to defend this position. We intend to expand our global activities using our production facility in Marbach (D) as our base.
Production at the oil mill in Marbach will be optimised and expanded. The company is banking primarily on organic vegetable oils and press cakes of organic seeds. We demand high quality when it comes to raw materials, and we therefore work closely with our raw materials suppliers. By doing so, we are able to guarantee maximum traceability.
On the product side, Cereals & Ingredients is preparing to enter the kids' food area. Calls for healthy, tasty food for children and the needs of our customers to extend their product range are gathering strength. With its VIOGERM® wheat germ products and various organic vegetable oils, HOCHDORF is in possession of a solid base to service these needs. The products will be sold under its own brand but also as business to business products in existing partner networks.