Organic junk food by HKScan Finland

Järvi-Suomen Portti Oy, a subsidiary of HKScan Finland, merging into HK-Ruokatalo by the end of the year, really intends to prosper. To my surprise, the company has started producing organic burgers and a veggie version too, already in last August.  That’s fearless, indeed.  One cannot know, if there is a decent sized target group but the launching of this product means that the company completely ignores ordinary market research reports, one of which is presented (in Finnish), incidentally by HKScan Finland’s closest competitor. According to this competitor’s presentation, of all organic food categories in Finland, ready meals are currently the least used and, what’s more important, one of the least desired in the future (see pages 4 and 5).

Without looking at any reports, one is able to guess that many organic food friends are sharply against all ready meals, and burger in particular is a red rag to them.  However, I think that there is also a group of busy consumers, perhaps predominantly female, who are frequent users of ready meals and for whom organic food is a highly positive thing.  And there is yet another possible target group, those who don’t mind the farming method or even do not recognize it, but just pick up their food quickly.  The former group in mind, one must hope that the nutritional properties of this new product are suitable and the packaging is sufficiently attractive.  It is also hoped that these products will get sufficiently shelf space so that the latter group would at least notice them. Of course, there is also the price issue. Compared to ordinary food, organic food is necessarily more expensive.  In this case it is even more so due to the fact that these new organic burgers contain minced beef.   Perhaps there is not yet too much organic pork available in Finland.  On the other hand, beef is of course generally considered healthier than pork. 

All in all, HKScan Finland’s organic food strategy seems to differ drastically from its competitor’s strategy stated in the report above.   Competitor's strategy can be summarized as something like this: The less processed product, the better organic food works. This kind of competitor’s statement means that we need to return to strategy differences between these two companies at some later date.

Organic junk food launch is a tough thing, and sometimes such ideas succeed.  There seems to be also many other organic foods in the company’s product range.  If some of them will be hits, then it is clear, that the company, acquired by HKScan Finland in 2010, has  found its place in the Group, and against all odds, will prosper.

It is likely, that the organic food ideas were born in the plant but there is still another new organic product:  Rose Poultry's organic chickens are in Finland sold under the same brand as those burgers above.  This must be the management group’s idea.  The product itself is bad, whole frozen chicken, just like 70’s were here again.  Secondly, for the Finnish consumer, foreign organic food is not real organic food.  Moreover, Danish meat is in Finland not considered to be completely safe or ethic although “No more salmonella in Danish poultry” tells a headline in Science Nordic.  Whatever, Finnish burgers may well succeed but this particular Danish product will be a failure in Finland.

Danes go China

Surely there will be demand for Rose Poultry’s products elsewhere.  Just these weeks, a group of Danish food companies are aiming the Chinese market.  See for instance TV/MIDT-VEST and LandbrugsAvisen. Authoritative Danish delegation has just returned from China and this was a return visit, namely the outgoing president Hu Jintao visited Denmark in June and food certainly was on the agenda back then. Danish Crown was of course the most important commercial player on this visit, but Rose Poultry was accompanying, as well as its major competitor Danpo.  Danish food companies' global reputation is good and Danes' self-confidence is of course first class, which will guarantee that in the near future we can expect Rose Poultry’s announcement of their successful visit to China. 

We will look at HKScan again later but on Friday, December 21st we are going to examine Atria's businesses. It's cold. Hurry up, climate change, hurry up! Could you come already before the summer? Even next week?

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