Chr Hansen gains full rights on LGG including existing deals, a small production site in Tikkurila, Finland, plus other dairy-focused specialty strains and a library of 3200 strains.
Functional foods market expert and consultant, Peter Wennstrom, founder of the Healthy Marketing Team, said the move made sense as Chr Hansen sought to solidify its presence in probiotics.
"Chr Hansen has its roots in fermentation and not in probiotics as do firms like Probi and BioGaia and they are clearly moving forward in the value chain by securing a globally accepted strain portfolio," Wennstrom told us.
"Key now is for them to have probiotic strains that can be applied to their customers' portfolio and LGG thrives in both dairy and juice not to mention in supplements."
"The race is on in this industry to take positions for future growth of probiotics."
Chr Hansen and Valio already have a close business relationship; Chr Hansen manufactures the most LGG products – especially in infant formula and human nutrition and Valio CEO Annikka Hurme said collaboration between the firms would continue.
LGG has had more research performed on it than any other strain (over 200 studies mostly focused on gut and immune health, with 800 other references) and debuted in 1990 in Valio-owned Gefilus probiotic fruit juice drinks.
Chr Hansen CEO Cees de Jong said his firm would “capture the full potential of the LGG brand across markets for dietary supplements and infant formula offerings, as well as pursuing new opportunities in dairy.”
Chr Hansen’s marquee strain is BB-12 (Bifidobacterium Lactis) which has been blended with LGG in the past by Chr Hansen in applications like powder sachet, Probio-Tec.
Valio shifts focus from ingredients to branded products
After publication, Ross Crittenden, Valio executive vice president for New Markets commented on the deal. "The sale will allow reallocation of resources from LGG ingredient sales to Valio's core business in branded consumer products. This includes continued development of Valio's probiotic range of Gefilus dairy and juice products that deliver the benefits of LGG in combination with great taste."