Valio Ltd exploits its know-how as a developer of functional foods by granting licences on the world market. The company has more than 20 partners in various parts of the world who are licensed to use know-how in the Lactobacillus GG lactic acid bacteria in their own products.

Valio, which is known as a pioneer in the milk sector, began its licensing activities ten years ago with Lactobacillus GG lactic acid bacteria, which strengthens the resistance. At this moment products containing LGG are sold in more than 30 countries.

"We offer functional-food licensing agreements around the world for Evolus, a milk drink that reduces blood pressure, and the production of lactose-free milk, says Kalle Leporanta, who is part of Valio's technology-licensing customer service.

Licensing has not only brought new international business but also recognition. Today Valio is better known than ever around the world and also a sought-after co-partner.

The primary target for licensing is an ingredient, secondly know-how and thirdly the product brands. Long-term cooperation is usually the aim. A licensing agreement with Valio lasts a minimum of five and a maximum of 15 years.

First licence in Holland

Valio's heavy investment in research and development has maintained the company's position as a pioneer in the field. A mastery of biotechnological processes and expertise in the use of milk components and lactic acid bacteria have created a solid base for present-day products.

When the worldwide rights to LGG lactic acid bacteria were acquired in 1987, it was felt even then that the know-how developed around the bacteria must be exploited on a worldwide scale.

"Valio's own resources wouldn't have been big enough to market the end products in Europe, let alone other continents. As a result, we sought locally-based partners and made licensing agreements with them," Leporanta says.
Valio's first licensing customer was found in Holland in 1993. Today the list of most important licensing countries besides Holland includes Switzerland, Spain, Ireland, Croatia, Australia, South Korea, Japan and the USA.

Bright prospects for licensing

The future for licensing functional ingredients looks bright. There is sufficient interest from old as well as completely new partners. Valio has extended and is extending the range of products and technologies on offer.

Last year the company started licensing its patented Evolus technology, which reduces blood pressure. The first foreign Evolus products were launched in November 2003, in Iceland. At the beginning of 2004 the biggest dairy company in Switzerland, Emmi AG, launched a lactose-free milk produced with Valio's technology.

The production technology for lactose-free milk is completely new and has aroused a great deal of interest. Negotiations are under way with several dairy firms. Valio also intends finding access to new markets in Europe with Evolus during this year.

"We're aiming at an annual growth of ten per cent in licensing income," Leporanta reports.

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Valio dairy products containing the functional Lactobacillus GG lactic acid bacteria are sold in more than 30 countries.