Esa Mäki, CEO:
“The net sales and operating profit of Apetit’s continuing operations clearly grew year-on-year. In the Oilseed Products business the result rose to profitable. The result of Food Solutions also improved year-on-year.
Net sales and sales volumes increased year-on-year in both businesses. In Food Solutions, sales volumes increased particularly in the Food service channel and exports. In the retail segment, volumes were slightly below than the high level seen in the comparison period. In the Oilseed Products business, market prices have levelled off from the highs seen last year.
Investments in product development make sure that Apetit’s product range keeps aligned with the needs of consumers. In March, we launched new snack products in the retail channel, consisting of delicious combinations of vegetables and cheese. We also expanded our range of oven and grill vegetables by introducing a new flavour. Taste and competitive pricing remain key factors in consumers’ purchasing decisions, and we are able to respond to these expectations in our product categories. We strengthen the Apetit brand and have added our Finnish Apetit rapeseed oil to our selection in the Food service channel.
Sales volumes increased year-on-year. The food service channel has continued its growth following the decline in sales caused by the COVID-19 pandemic. In the export, we have achieved strong growth in sales volumes thanks to our deliveries of peas. We have maintained our stable position among the preferred food choices of Finnish consumers. Cost inflation and the sharp increase in food prices reflect in consumer behaviour. Consumers are trying to decrease food waste and are opting for products in more affordable price categories.
We will increase our cultivation area for field vegetables in the upcoming growing season. The number of hectares used for the cultivation of field vegetables by our contract growers will increase particularly for peas, potatoes and carrots. Our contract growing volume for Finnish field vegetables during the upcoming harvest season will be well over 30 million kilograms, using the Responsible Farming method we have developed at Apetit.
Our Räpi experimental farm is continuing to develop cultivation methods. In accordance with our strategy, we will focus on promoting the cultivation of domestic pulses during the upcoming harvest season. In addition to peas, the Räpi farm grows chickpeas, among other crops, and the area under cultivation will again grow substantially when compared to the previous year. We were among the signatories to the Carbon Action cooperation network’s statement published in April with the aim of supporting sustainable cultivation methods and promoting regenerative agriculture. Promoting regenerative agriculture can produce benefits for waterways, the environment and farmers. The Räpi experimental farm will cultivate rapeseed in the upcoming harvest season.
During this spring, we have made highly visible efforts to promote domestic rapeseed cultivation. In our campaign, which is known as Kaikki kotiinpäin in Finnish, we have sought to remind audiences of the significance of rapeseed with regard to self-sufficiency, as well as their favourable characteristics in crop rotation. The concerns about the declining cultivation areas of domestic rapeseed are real: according to the 2023 cultivation area forecast* of the Finnish Cereal Committee VYR, the area under cultivation for spring rapeseed – which is the most popular oilseed plant in Finland – will decline substantially this season. We hope that farmers will include rapeseed in their cultivation plans. Apetit is a stable buyer of domestic oilseed plants and we want to significantly increase the number of Finnish oilseed products.
The new energy solution at the Säkylä frozen foods plant will be deployed during the summer. The energy solution is primarily based on renewable energy sources and heat recovery, and it represents an important step in reducing the climate impacts arising from our energy consumption.
During the first months of the year, we conducted a survey** on Finnish consumers’ habits and perceptions concerning frozen vegetables. The results indicate that we are on the right path in many respects. A majority of the respondents felt that frozen foods make it easier to include vegetables in their diet. According to the survey, frozen vegetables are perceived as a very sustainable choice. Frozen vegetables enable anyone to reduce food waste and increase the share of domestic vegetables on their plate all year round.”
** The survey sample consisted of 1,000 Finnish consumers between the ages of 18 and 75 who buy frozen vegetables at least a few times a year. Further information and more detailed results are available on Apetit’s website (in Finnish).
Esa Mäki, CEO: “The net sales of Apetit Group’s continuing operations increased significantly, but profitability was lower than in the comparison period. In Food Solutions, the main challenge from profitability’s perspective was inflation that affects production inputs. In Oilseed Products, significantly increased raw material and logistics costs reduced profitability. However, demand for products in both businesses remained high. The increase in costs continued during the second quarter, and the sales price increases to be made are a response to cost inflation that has already been realised. In Food Solutions, customer price increases will enter into force gradually in late summer and in the autumn. In Oilseed Products, the introduction of higher sales prices will be slower due to agreement structures and the more extensive customer base. There is very good demand for domestic rapeseed oil in all sales channels. The successfulness of the current cultivation when it comes to the availability and price of oilseed plant raw material is significant for our profitability. According to recent surveys, an increasing number of consumers has changed their purchasing behaviour as the price of food has increased. Apetit’s products have a strong position in retail trade as the only Finnish option and market leader of frozen vegetable products, which contributes to safeguarding demand for our products also in the changed circumstances. Apetit’s products are of high quality and have competitive prices. They are also a good match with the prevailing food trends of easier daily life, domestic origin, well-being, plant-based food, and sustainability. The construction of the pizza production line in Pudasjärvi started in May and proceeded as planned during the summer. The approximately EUR 2 million investment was completed in July, and commercial production on the new line started at the beginning of August. New pizzas will be available in shops’ frozen food sections in October. Our goal is to challenge our foreign competitors by baking pizzas with sourdough, using domestic raw materials as much as possible and ensuring the deliciousness with stonebaking. In Säkylä, we have continued investments in production efficiency improvements. The reception of peas at the start of the production line started during the summer. For its part, this eliminates production bottlenecks and improves our opportunities to increase pea production capacity in the future. The harvest expectations for field vegetables are hopeful. The hot weather in early summer did not continue too long for plants, and rainfall has been mainly even throughout the growing season in our cultivation areas. After a couple of weaker years, the pea harvest is also expected to be good. Cooler weather has also contributed to the more even development of peas, which is good for pea quality and the smoothness of production. For oilseed plants, the conditions during the summer growing season have been generally favourable so far. In the Baltic countries, harvesting started on time, and in Finland, main harvesting will probably begin in September a little later than normally. The total cultivation area of rapeseed in Finland increased by approximately 12,000 hectares from the previous year, which contributes to improving the harvest volume forecast. The divestment of Apetit’s Grain Trade business to Berner was completed at the end of May, and it allows us to focus on growing and developing our processing businesses, meaning the Food Solutions and Oilseed Products businesses. Apetit will continue to cooperate intensively with Berner in purchasing oilseed plant raw material and in increasing the oilseed plant cultivation area and harvest level together with farmers. Apetit’s products promote sustainable eating in many ways. Baltic Sea Fish Patties, to be launched to professional kitchens in August, complement our local fish product selection. Like Baltic Sea Fish Fingers, the product is made of Finnish skinless Baltic herring fillet. The fishing of Baltic herring removes eutrophicating nutrients and algae from waterways. Sustainable food choices do matter!”
The sale of Apetit Group’s Grain Trade business to Berner Oy took place on May 31, 2022. Avena Nordic Grain was responsible for Apetit Group’s Grain Trade and Oilseed Products businesses. As part of the sale, the right to use the Avena name was also transferred to Berner. Avena Nordic Grain Oy new name is Apetit Kasviöljy Oy and its subsidiary Avena Kantvik Oy is now named Apetit Kantvik Oy. The companies form the Apetit Group's Oilseed Products business. The new names have been already registered in the trade register. Both companies’ business ID numbers, invoicing information and phone numbers will remain unchanged. The business has already introduced changes to the e-mail addresses of the personnel of the companies, which now have the format . We continue to purchase domestic oilseeds and develop cultivation together with our partners. We will also import certain amounts of rapeseeds in addition to domestic procurement. This way we can offer our customers decent quantity of high-quality oil products and feeds for their success.
Esa Mäki, CEO: “The significant increase in the prices of production inputs had a negative effect on the profit performance of continuing operations in the first quarter. The profitability of Food Solutions was reduced in particular by higher energy costs. The profitability of Oilseed Products was weighed down by the high costs of raw materials and logistics. Both businesses will continue to transfer the higher costs to sales prices. At the end of December, we announced that Apetit had signed an agreement to sell the Baltic operations of the Grain Trade business to Scandagra Group. The sale concerned the business operations of Avena’s companies in Estonia and Lithuania. The transactions for both companies were completed as planned in March. In connection with these divestments, we decided to close our Latvian company. The Latvian company primarily provided logistics support for wheat and oilseed plants sourced in Lithuania. In March, we announced the sale of the Finnish operations of the Grain Trade business to Berner Ltd. The transaction will be carried out as a business transfer including Avena’s Finnish grain trade business, as well as its grain stocks and port operations in Finland. The transaction is expected to be completed in the second quarter. The completion of the sale is subject to approval by the competition authority. Once completed, the divestment of the Grain Trade business will improve Apetit’s profitability and allow Apetit to focus on the growth and development of its processing businesses, namely the Food Solutions and Oilseed Products businesses. The operating environment and competitive landscape in the Grain Trade business has changed drastically during the past few years. The operating conditions have continuously become increasingly challenging for a company that operates purely as a grain seller. In the upcoming cultivation season, our target for contract growing is the previously established level of just over 30 million kilograms of domestic vegetables. In addition to contract farming, we will continue to implement a number of projects at our experimental farm to seek ways to improve soil fertility and water economy, for example, and to develop the cultivation of various legumes, such as chickpeas, to correspond to the needs of the industry. This will present us with the opportunity to further increase our degree of domestic origin and our self-sufficiency with regard to specialty plants. We will continue our efforts to increase the cultivation area and harvest size of oilseed plants in Finland. Due to the significant increase in the prices of oilseed plants, the profitability of cultivation is at an attractive level from the farmer’s perspective, and there is certain demand for oilseed plant raw material in the Finnish food industry. Highquality rapeseed oil is valued and in high demand in all sales channels: industry, professional kitchens and retail. The BlackGrain rapeseed ingredient, which is currently in small-scale production, responds to the need to increase the availability of plant-based proteins. Our development efforts are focused on moving the production to an industrial scale. Apetit’s corporate responsibility programme sets a target of reducing the CO2 emissions from Apetit’s own operations by 75 per cent by 2025. The most significant emission reductions are achieved from the bioenergy plant completed at the Kantvik vegetable oil milling plant, which became operational last year, and the new energy solution to be deployed in Säkylä. The energy solution at the Säkylä frozen foods plant will use heat-capturing technology and renewable energy to reduce the plant’s CO2 emissions by as much as 80 per cent. The new energy solution is scheduled to be deployed in the second quarter of 2023. To date, we have reduced the Group’s emissions by over 50 per cent compared to the baseline year specified in our corporate responsibility programme. Phasing out the use of fossil fuels and having a fixed price for electricity will also significantly reduce the Group’s energy costs in the next few years. In general, Apetit has successfully achieved its goal of ensuring the health and safety of employees and undisrupted operations throughout the food supply chain during the COVID-19 pandemic. However, sicknessrelated absences caused by the pandemic have significantly increased during the early part of the year. Apetit will continue to promote sustainable food supply chains in a profitable manner.”