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, including, in particular, infant formula. The production and marketing of high-quality cereals, dried vegetables and fruits as well as vegetable oils and flours has been geared towards providing healthy nutrition to all age groups – from babies to senior citizens.

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 HOCHDORF Group is using acquisitions and product developments to progressively move into the business-to-consumer market. 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.

Dairy Ingredients

The roots of the HOCHDORF Group lie in the production of various milk powders. In 2018, 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.
  • Uckermärker Milch GmbH, Prenzlau (Germany), processes milk to make butter, curd and dried milk products, as well as buttermilk. The products are marketed nationally and internationally. The HOCHDORF Group owns a 60% stake in this company.

Baby Care

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 2018, the HOCHDORF Group earned 31.4% 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.
  • With the acquisition of the long-established company Bimbosan on 30 April 2018, HOCHDORF is taking an important step closer to the end consumer in the Swiss domestic market. Bimbosan offers a wide range of Swiss organic products and is the market leader in the Swiss retail market.
  • The HOCHDORF Group holds a 60% stake in HOCHDORF Americas Ltd. The company sells HOCHDORF infant formula in Latin American countries.
  • The Pharmalys Group 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. HOCHDORF Holding Ltd holds a 51% majority stake in the Pharmalys Group.

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 Swiss market for stabilised wheat germ and wheat germ oil. Further priorities are the development and marketing of Kids' Food products, 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 AG 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 holds a 65% stake in this company.
  • Snapz Foods USA Inc. was founded in 2018. The company is responsible for marketing Snapz products in the US. HOCHDORF holds a 65% stake in the 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 worldwide. The HOCHDORF Group owns a 90% stake in this company.

Net sales revenue by region

Strategy for 2018 – 2022: continue the successful strategy

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 strategy. With the 51% majority stake in Pharmalys Laboratories SA, Pharmalys Tunisie S.à.r.l. and Pharmalys Africa S.à.r.l., 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 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. To meet their targets, every business division will develop premium products accordingly and use them to establish itself in their respective 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

We aim to develop our Dairy Ingredients business at a sustainable global level from a strong Swiss base. Cooperation between the three milk plants, Hochdorf, Sulgen and Prenzlau, will be optimised to the greatest extent possible, and the product portfolio efficiently combined.

We intend to defend our market position in Switzerland, including 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 special milk powder, which is sought after on the market.

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 international in structure and is planning 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 and related services in accordance with our premium strategy. In the medium term, the Baby Care business division intends to move closer to the consumer in the value chain with its own brands "Bimbosan", "Babina", "Primalac", "Swisslac" and "Natrapure" in selected markets.

On the production side, we are seeking to optimise existing capacity for the production of the infant formula. The capacity of the spray tower lines for the production and filling of Swiss-made infant formula is expected to be utilised to 80% by the end of 2022.

Strategy and Markets for Cereals & Ingredients

The Cereals & Ingredients Division intends to carve itself a niche in the growing market for healthy and tasty foods. With the VIOGERM® wheat germ products, various vegetable oils and flours in organic quality (Marbacher Ölmühle) and dried vegetable and fruit products (Zifru Trockenprodukte GmbH), HOCHDORF is well positioned to meet the need for a healthy and tasty food. The various products will be marketed as private label products and also sold directly to consumers (Snapz Foods AG). This business division needs to be reorganised in the coming months.

With HOCHDORF South Africa Ltd, HOCHDORF operates a chocolate production facility in South Africa, which is geared towards sustainability. The chocolate is primarily sold as a private label or directly to consumers under the "Afrikoa" brand. In the medium term, HOCHDORF also intends to market its products internationally.

Distribution of net sales revenue