Business model, strategy and markets
The HOCHDORF Group is one of the leading food companies in Switzerland. The company operates in the areas of Dairy Ingredients, 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, vegetable oils and flours. With the acquisition of Zifru Trockenprodukte GmbH in Germany, HOCHDORF is now also active in the area of dried vegetables, fruits and other specialities.
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. With the acquisition of the Snapz brand and the stake in Pharmalys Laboratories SA, the company is increasingly also engaging in the business-to-consumer business. 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 various milk powders. In 2017, this division was responsible for two-thirds of the net 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 focuses on milk filtration and milk drying processes. The majority of the products are exported.
- Uckermärker Milch GmbH, Prenzlau (DE), 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 2017, the HOCHDORF Group earned around 28% 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.
- With the 51% majority shareholding in companies in the Pharmalys Group, HOCHDORF is moving closer to the consumer market. Pharmalys markets infant formula as well as cereals under the Primalac and the Swisslac brands. The products are available in over 40 countries in Europe, Asia, Africa and the Middle East.
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. Further priorities are the development and marketing of Kids' Food products and cereal-based healthy snacks and ingredients as well as dried vegetables, fruits and other specialities.
- Marbacher Ölmühle GmbH, Marbach (Germany), 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.
- Zifru Trockenprodukte GmbH, founded in 1997 in Zittau (Germany), specialises in the development and production of healthy, long-life fruit and vegetable products. The fruit and vegetable items are dried using state-of-the-art technology. The drying system is one of the largest of its kind in the world.
- Snapz Foods Ltd was founded in 2017 and is based in Hochdorf. The company markets dried fruits and vegetables as well as other dried specialities directly on the consumer market. HOCHDORF has a 65% stake in this company.
- HOCHDORF South Africa Ltd, based in Cape Town, was founded 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.
Net sales revenue by region
Strategy 2017 – 2021: successful strategy will continue
Our goal is to turn HOCHDORF into a global, profitable niche company with premium products. 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. With the 51% majority stake in Pharmalys Laboratories SA, Pharmalys Tunisia SA and Pharmalys Africa Sarl, the HOCHDORF Group is on an ideal course in the area of Baby Care, especially when it comes to interesting target markets (MEA region and/or Asia).
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 product specialist. 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 premium products accordingly 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 using 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
We aim to develop our Dairy Ingredients business at a sustainable global level from a strong Swiss base. Cooperation between the milk plants will be optimised to the greatest extent possible, and the product portfolio organised logically.
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. At the site in Prenzlau, we are, for example, planning to produce specialist milk powder, which is sought after on the market.
In all our activities we aim to pay attention to the various underlying conditions and build them sensibly into the operational implementation process. Milk procurement represents an important element here and should 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 Middle 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 accordance with our premium strategy. In the medium term, the Baby Care Division aims 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 and increase demand accordingly. The new spray tower line for manufacturing and filling Swiss-made infant formula in Sulgen should start operating at the end of the second quarter of 2018.
Strategy and markets 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 Zittau (Germany) as our base. Marbacher Ölmühle GmbH focuses on organic vegetable oils and specialist flours produced from the resulting press cake. Following the expansion of production at the Marbach site, it is now essential to sell the potential additional quantities on the market and gain market shares. 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 production side, Cereals & Ingredients is entering the private label market with its Kids' Food production. The demand for healthy, tasty food for children and the need for customers to extend their product range are gathering strength. With the VIOGERM® wheat germ products, various organic vegetable oils and flours and the dried vegetable and fruit products of Zifru Trockenprodukte GmbH, HOCHDORF has a solid base to service these needs. The products will be sold under our own brand (Snapz) and also as business-to-business products in existing partner networks.