Fazer Group is weighing up changes to its plant-based dairy production amid a “slowdown” in category growth.
The Finland-based company is in talks with staff representatives over simplifying production at sites in Sweden and Finland.
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Fazer is looking to make its Tingsryd factory in Sweden “the centre for oat drink production”. Its facility in Koria, Finland, would produce oat-based alternatives to yogurt.
The changes would affect 133 employees, of which 93 permanent positions in Finland could be terminated, Fazer said.
The company has been building its position in plant-based dairy in recent years. It acquired the Tingsryd site in 2021 when it bought Sweden-based oat-drink producer Trensums Food. Two years earlier, Fazer acquired the Finnish family-owned company Kaslink, which was based in Koria.
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As part of the restructuring, Fazer’s Koria facility would be tasked with exporting to international markets.
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By GlobalDataIn February, Fazer said it was going ahead with a plan to exit the dairy category, including ending production of milk products at its Koria plant, shedding 82 employees.
In its statement today (3 October) announcing the potential job cuts, Fazer noted demand for plant-based products had “steadily increased” in the last ten years but said competition had increased amid a “slowdown in consumption growth” and an increase in production capacity in Europe.
Fazer said that, despite the slowdown, the consumption of plant-based products is “expected to grow” in the coming years.
Kati Rajala, VP of plant-based drinks at Fazer, said: “Our two factories have different profiles. In Koria, we have great capabilities and know-how to produce high-quality oat-based gurts, whereas, in Tingsryd, we have decades of experience and very efficient and streamlined processes to produce oat drinks on a large scale. With these changes, we would be able to increase the focus in both factories and secure our competitiveness also in the future.
“In Finland, the consumption of Fazer Aito gurts is on the rise, and we already have around 20% market share. We see good international growth potential for gurts and our Koria factory is well-positioned to respond to this growth due to our highly skilled personnel and the state-of-the-art facility.”
Rajala added that, if Fazer proceeds with the plans, employees could potentially be placed in other parts of the company. “If these changes are realised, we would do our utmost to support our employees in Koria and help them find new jobs. Vacancies in other Fazer Group units would be offered with priority to those employees whose employment would possibly be terminated,” Rajala said.
Fazer employs more than 6,000 people and exports to over 40 markets. In 2022, the company’s net sales were €1.1bn ($1.15bn) with an EBITDA of €101.4m.
In March, Fazer announced job cuts in its domestic bakery arm to invest in “trendy” rye bread. The group said a total of 218 jobs will be affected by its investment in energy-efficient machinery, reducing the total number of bread production lines.
Citing economic volatility and potential domestic sugar taxes, the group has also pared back investment plans for a Finland-based confectionery factory.
