Apetit seeks profit growth by increasing the degree of processing

Translation: Original published in Finnish on 9/26/2025 at 7:53 am EEST.

Apetit’s business consists largely of processing basic foodstuffs such as frozen vegetables and vegetable oils, but in recent years the company has been able to support growth with more highly processed products that provide higher added value. Some of the effects of recent years' investments on the development of business figures are yet to be seen. In addition, the company is planning a new growth driver from the BlackGrain rapeseed ingredient and announced in July its first significant investment related to the ingredient.

Value added and efficiency first in business investments

Apetit has actively invested in its business in recent years, and the company's earnings have seen significant growth in the medium term. The EBIT of the businesses under the current structure has already improved from the 2019 level (~1 MEUR) to over 9 MEUR in 2024.

Investments and depreciation

 Source: Apetit

We have listed below the company's key investments related to product portfolio development in recent years.

Patties and meatballs: Strong market position, plant-based trend supports demand

A 10 MEUR investment in a new patty and ball factory was completed at Apetit's Säkylä plant in 2019. The line has enabled the company to offer a wide range of plant-based and fish products, including vegetable mince products containing pea protein. The selection meets the growing demand for meat substitute products in both the grocery retail and foodservice segments. We believe Apetit has a strong position in domestic meat-free frozen patties and balls, and for example, the company's Crispy Chick patties are widely sold even in small stores. The company has continued to launch new meat substitute products for professional kitchens in fall 2025.

Frozen pizzas: Challenger position

In Pudasjärvi, Apetit's frozen pizza factory implemented a renewed production line in 2022, which involved an investment of around 2 MEUR. Frozen pizzas are a fairly large segment, but Apetit's market share is quite low and competition is, in our estimation, very active. The company aimed to gain a larger share of the market with the investment, but we estimate it is still in a challenger position.

Vegetable oils: Growth opportunity in consumer sales

A new vegetable oil bottling line was completed at Apetit's rapeseed and turnip rape pressing plant in Kirkkonummi at the end of 2024 (an investment of around 4.5 MEUR). The line enables bottling of vegetable oils into packages designed for consumers and professional kitchens in-house – previously, this work was outsourced. We see the investment as relatively low-risk, as the company already had a significant sales volume of vegetable oils, and the new production line will allow Apetit to capture a larger share of the added value. In addition, having its own production line enables more agile product development. The majority of the production from Apetit's vegetable oil pressing plant goes to industries and animal feed, but by focusing on consumer sales, the plant could increase the added value it generates. We see the conditions for this as favorable, as Apetit’s Oilseed Products is the only large processor of rapeseed and turnip rape oil located in Finland. The investment is relatively recent, and its growth impact is therefore mostly yet to come.

BlackGrain is envisioned as the next growth driver

Apetit has been developing and testing the BlackGrain ingredient for years; it is produced from press fractions generated during the vegetable oil refining process. The company announced in July 2025 that it would invest 2 MEUR to improve the BlackGrain rapeseed powder manufacturing process and increase BlackGrain raw material production, which removes a bottleneck from increasing production. BlackGrain itself is manufactured by a subcontractor outside Apetit's own refinery, but Apetit could consider building its own production capacity in the future if the commercialization of the ingredient progresses favorably.

The ingredient contains protein, fiber, and healthy fats, and could be utilized in various products such as breads, bars, plant-based protein products, mueslis and patties. The ingredient has been tested in various products and has also been supplied to professional kitchens as part of vegetable patties in 2022-23. In September 2025, Apetit launched the BlackGrain-containing vegetable burger patty (Kasvisjauhis Burgerpihvi) for professional kitchens. According to the company, BlackGrain improves the texture and nutritional properties of plant-based patties.

In our view, investing in a new ingredient involves more risk compared to strengthening existing product categories. However, Apetit has been developing BlackGrain for a long time and with a relatively low level of risk. We also consider the recently decided 2 MEUR investment to be a relatively limited risk-taking in terms of its size. Making a larger production investment, on the other hand, would in our view require higher visibility into BlackGrain's commercial potential. On the other hand, successful commercialization of BlackGrain and scaling up volumes could enable profitable business for Apetit, as there is no directly comparable ingredient on the market yet. However, competition between different plant-based protein ingredients is fierce, and the market is still relatively small.

We expect an upward trend in earnings for the rest of the year

We expect Apetit’s earnings to decline in the current year, due to headwinds related to the prices of raw materials for Oilseed Products, which we estimate mainly affected the beginning of the year. We expect the earnings level to develop more steadily towards the end of the year, thanks to, e.g., volume growth in Food Solutions and improved raw material availability for Oilseed Products. In addition to launching value-added products, the company has increased contract production of vegetables and invested in sales in export markets (especially Sweden). The success of seasonal production is a key annual variable for the company's earnings, and an indication of this will be provided in connection with the Q3 report.

EBIT of continuing operations

 Source: Inderes forecast (MEUR)