Raisio Group and the Benecol Launch

Case 11: Raisio Group and the Benecol Launch

The introduction of Benecol was launched by a Finnish company, Raisio Group. Raisio Group was traditionally a grain milling company, but because of Benecol, they rose to the second most valuable public company in Finland. Benecol brought them a lot of attention and attracted investors for their active ingredient, stanol ester. By partnering with established companies such as Johnson & Johnson, Raisio Group could operate in the global market with their newly patented product. (Grant, 2013)

Synopsis of the Case

The active ingredient in Benecol is stanol ester. Stanol ester has been marketed as an ingredient to help lower cholesterol. The first product to feature this active ingredient was margarine. (Grant, 2013) Because this was an experimental product, there was not enough equipment to produce enough stanol ester to meet demand. “Since there had been no demand for plant sterols, (previously) no investments had been made in separate facilities.” (Grant, 2013, p. 589) The Raisio Group could meet only about two-thirds of the demand for the margarine containing stanol ester. They needed a way to meet the demand in the global market.

Relevant Factual Information about the Problem or Decision the Organization Faced

Raisio Group employed Tor Bergman, head of chemicals, who guessed that the stanol ester produced by them, is ahead of the competition by 18-24 months. Raisio Group needed to capitalize on this advantage and fast, before the competition developed their own was to extract the stanol ester. The company faced the decision of if they needed to be vertically integrated within the markets. They already had many offers to utilize the cholesterol-lowering products in an established number of food and beverage suppliers. (Grant, 2013) The company was also a leading manufacturer in their home country, but did not have the means, facilities or experience to operate outside of Finland.

Explanation of Relevant Concepts, Theories and Applications Derived from Course Materials

Conducting a merger with Johnson & Johnson seemed like the best options for Raisio to overcome the obstacles of global manufacturing and distribution. “Johnson & Johnson possessed global manufacturing, marketing, and distribution capabilities, together with extensive experience in the food and drug approval procedures of the US, Europe, and most other countries.” (Grant, 2013, p. 596) By merging with J&J, Raisio Group did not continue vertical integration, and they could focus on the one product, the key ingredient of stanol ester and the supplying of this product to the market.

Benecol was heavily marketed as a way to lower cholesterol and was marked as a “healthy” additive to food. High cholesterol is an issue in many Western