Business model, strategy and markets
The HOCHDORF Group is one of the leading food companies in Switzerland. 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 holding in Uckermärker Milch GmbH, HOCHDORF is also active in the area of butter, buttermilk and curds in Germany.
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 product 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 2016, this division was responsible for almost three quarters of gross sales revenue. The following companies form part of the Dairy Ingredients division:
- 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, as well as whey 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. Buttermilk has also been filled in pots at this location since 2015. The products are marketed nationally and internationally. The HOCHDORF Group owns a 60 % share of this company.
HOCHDORF has a long tradition in the production of infant formula stretching back many years. Greater emphasis has been placed on the global focus of this division since 2006. In 2016, the HOCHDORF Group earned around 22 % of its revenue with infant formula.
- The Baby Care Division of HOCHDORF Swiss Nutrition Ltd exports more than 90 % of its products. The broad product range includes 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 dessert 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 and flours 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 and produces high-quality chocolate and sells it to business customers and consumers exclusively on the African continent. The HOCHDORF Group owns a 90 % stake in this company.
Gross sales revenue by region
Strategy 2017 – 2021 continues on the route we have chosen
Our goal is to turn HOCHDORF into a global, profitable niche company with premium products. 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 in all business areas.
Die Entwicklung und Vermarktung neuer wertschöpfungsstarker Produkte stellt einen zweiten wichtigen Pfeiler zur Zielerreichung dar. Die neuen Produkte richten sich am Kundennutzen aus und bieten einen hohen Mehrwert; dazu gehören z. B. Basispulver für die Herstellung von Babynahrung oder instantisierte Milchpulver.
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; they include, for example, 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 to produce 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 intend 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 for Baby Care
The Baby Care Division 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. As a USP, along with Swissness, we want to be able to continue offering our customers a modern and complete product range of children's nutritional specialities in line with our premium strategy. In the medium term, the Baby Care Division wants to get closer to the consumer in the value chain with its own brands in selected markets (keyword: forward integration).
On the production side, we are seeking to optimise existing capacity for the production of infant formula. At the same time, we will adapt production capacity to meet the high demand. The new spray drying tower line for manufacturing and filling Swiss-made infant formula in Sulgen is expected to start operating in the first quarter of 2018.
At our Prenzlau facility, we are planning to produce basic products for infant formula production to meet market demand. Several global partners are interested in such high-quality products for manufacturing 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 for Cereals & Ingredients
The Cereals & Ingredients Division 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 concentrates primarily on organic vegetable oils and specialist flours made from the press cake. We demand high quality when it comes to raw materials and so we work closely with our raw materials suppliers. In this way we are able to guarantee maximum traceability.
On the product side, Cereals & Ingredients is preparing to enter the Kids’ Food area. The demand for healthy, tasty food for children and the need for customers to extend their product range are gathering strength. With its VIOGERM® wheat germ products and various organic vegetable oils, HOCHDORF has built a solid base upon which to service these needs. The products will be sold under our own brand and also as business-to-business products in existing partner networks.