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Global demand for oats is increasing strongly

Sari Alhava | 15.1.2016

​Fazer Mill has licensed the technology that enables the production of new functional ingredients from oats. These can be sold for the dairy, dietary supplement, snacks
and cosmetics industries. 

The production of oat ingredients is launching as a result of long-spanning research. VTT started to study functional oats in 2003 in cooperation with the Natural Resources Institute Finland (Luke).

“Concentration of oat fibre provided excellent results almost by chance. We conducted technical and financial calculations in a commercialisation project funded by Tekes and continued product development. It always takes long-term efforts to develop our technologies ready to commercial production and customer’s processes,” says Anu Kaukovirta-Norja, Vice President R&D, Bio and Process Technology at VTT.

In this particular case, the timing was perfect for cooperation. Fazer Mill had invested into its own oats mill in 2013 for the purpose of processing oat flakes.

“We wanted to increase the degree to which oats are processed and also develop new products, particularly for food industry applications. VTT offered the patent to us around that time, and it was exactly what we were looking for. We licensed the innovation after lengthy negotiations, and have an exclusive right to use it in Europe and Russia,” says Pekka Mäki-Reinikka, VP Fazer Mill & Mixes.

Mäki-Reinikka and Fazer Mill’s Senior Manager, R&D Markku Mikola extend special thanks to Juhani Sibakov, Anu Kaukovirta-Norja, Juha Ahvenainen and Taina Saksa at VTT.

“VTT has done the right things and has adopted a long-term visionary approach,” they say.

VTT and Fazer Mill have enjoyed close relations for decades, but this is the first time the organisations are working together as business partners.


 

The high quality of Finnish oats is a great asset

Functional ingredients are a hot topic globally thanks to the health and wellness boom. Oats in particular are in increasingly high demand. Fazer invested in the oats mill at the best possible time.

“Oats are a true superfood, and, thanks to their high quality, Finnish oats are a highly valued ingredient. We want to meet this increasing demand. It makes sense to process oats further in Finland,” Mikola says.

When commercialising a product, it is typical to overestimate future demand, but the exact opposite is true for the sales volume estimates for oats.

“The same may well happen in the oat ingredient market,” Mäki-Reinikka estimates.

He says that, while Fazer Mill was initially interested in exporting oats and oats ingredients to neighbouring areas, further studies indicated that the oat markets are growing globally.


 

Oats truly are good for you

Oats have a good social image, and as an easily digestible food, are suitable for most people. Allergies are rare, and most celiac disease and irritable bowel syndrome (IBS) patients can eat oats.

Oats-based products are in demand specifically because of proven health benefits.

The EU has approved several health claims about oats. Oats contain beta-glucan, which helps maintain healthy blood cholesterol level, which in turn reduces the risk of coronary heart disease. The fibre in oats promotes digestive health.

“Finnish oat protein is also welcomed by consumers who want to eat more domestic plant protein. Oat oil is a good, healthy vegetable oil,” Mikola points out.


 

Healthier snack and breakfast choices

With the new technology, it is possible to break down oats so as to extract valuable healthy ingredients: oat beta-glucan, oat protein and oat oil. The process produces pure components with no residues.

“By concentrating beta-glucan from oats, it is possible to pack more health ‘punch’ in a smaller package. The concentrate is also easier to add to various consumer products,” Mikola explains. Apart from bakeries, Fazer Mill’s new products will be in demand in the dairy, dietary supplement, snacks and cosmetics industries.

“In the food sector, they are suitable for snack bars and biscuits as well as breakfast products that promote heart health,” Mikola explains.

The Fazer Group can use the oat ingredients in its own products, but the company also plans to manufacture them for the export markets.

“We export the basic product from our oats mill, i.e. oat flakes, to 25 countries. The market for oat ingredients is just as global, if not more so,” Mäki-Reinikka says.

Having said that, he emphasises that the domestic market remains an important focus area.

“The mill that produces the basic products is a foundation for everything else.” 


 

IMP_fazer.jpg
 

According to Pekka Mäki-Reinikka and Markku Mikola from Fazer Mill, the new technology enables the extraction of valuable healthy ingredients: oat beta-glucan, oat protein and oat oil.


 

HISTORY OF FAZER MILL

Fazer Mill was founded in 1971. For the first 20 years of its operation, it provided ingredients only for the bakeries and biscuit and sweet factories in the Fazer Group. Fazer Mill was granted permission to sell products to other countries shortly before Finland joined the European Union.

The oats mill was acquired in 2013. The latest line to be finished is the oat ingredient processing line that was taken into production use towards the end of 2015.

During the first 44 years of its operation, the largest mill in Finland focused on B2B sales. The very first consumer product, the Alku (“Start”) porridge, was launched in 2015.

Fazer Mill employs 68 persons who have solid expertise and education in food science, including cereal technology graduates and doctors, food-science engineers and economists.

With new additions to the staff, there has been special emphasis on language skills and international experience, which makes Fazer Mill well equipped to operate on the global markets.


 

 

 

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