26 Nov 2014 Finland’s Raisio buys back licensing rights to cholesterol-lowering Benecol
Finnish agro-food giant, Raisio, is buying back the licensing rights to its cholesterol-lowering, plant stanol-based Benecol brand. A leader in this functional arena in Europe, Benecol has struggled in the North American market.
Raisio has paid €88.4m to take back the licensing rights from Johnson & Johnson subsidiaries Cilag and McNeil Nutritionals in the UK, Ireland, Belgium and the US.
CEO Matti Rihko said the move meant Raisio could develop the, “Benecol business on our own terms, following our strategic objectives.”
According to Raisio, the plant stanol ester of Benecol products has been chosen as one of the world’s most significant nutritional innovations. Benecol products are sold in almost 30 countries on five continents. Benecol products are said to account for about a fifth of the total consumer market for cholesterol-lowering functional foods worth approximately €1bn.
Analyst Julian Mellentin from New Nutrition Business agreed the EU-health claim-backed brand was better served under Raisio’s roof than at J&J which since 1998 had tried and failed to turn on a mass audience, especially in the US where large marketing outlays were unable to ever push sales much beyond €24m annually. The brand was removed in 2002 before being reintroduced but sales are below €10m in the US today.
Despite the buy-back McNeil will continue to act as distributor in the short term while new arrangements are made.
“McNeil plowed a lot of money into the brand but I doubt they ever won a positive return on investment,” Mellentin told NutraIngredients.com. “J&J should have sold it 10 years ago.”
“I think this indicates a problem with trying to market foods with medical premises to a mass public. Food is food and medicines are medicines. Products in between are niche and companies need to understand this and Raisio does so this is a good move for Raisio. They are the correct parent of this niche brand.”
The range has been more successful in the UK and Ireland where sales are worth about €65m for a range first launched in Finland in 1995 and which includes spreads, yoghurt drinks and other products.
Plant sterols and stanols won EU approval in 2009 that allowed them make cholesterol-benefitting claims under article 13 (general function) and 14 (disease risk factor reduction) of the EU nutrition and health claims regulation (NHCR) such as: “Plant sterols and plant stanol esters have been shown to lower/reduce blood cholesterol. High cholesterol is a risk factor in the development of coronary heart disease.”
Source: NutraIngredients.com