– We have never seen this cost level as now – E24

– We have never seen this cost level as now – E24

The family business in Sogndal increased its income by more than NOK 100 million last year.

For the first time in many years, Lerum is seeing growth in jam, which is, among other things, a popular accessory to waffles.  Illustrative image.
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The juice and jam producer generated income of approximately NOK 809.2 million in 2023, up from NOK 698.2 million in 2022. This is shown by the company's latest annual accounts.

Operating profit ended at NOK 30.8 million last year, up from NOK 6.7 million the year before. The annual result came in at just over NOK 22 million in 2023, up from NOK 3.7 million the previous year.

At the same time, the company should focus more on cost savings.

-2023 was a good year for us. The jam category has seen volume growth for the first time in many years, and we have strengthened our position in Sweden, Trine Lerum Hellhaug, Managing Director of Lerum, tells E24.

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It belongs to the fourth generation of the Lerum family who are now owners of the company whose roots go back to 1907.

The family company, which has production facilities and headquarters in Köpanger in Sogndal municipality, also supplies juice to the Swedish and Finnish markets.

– Results come from good brands over time, a strong market position, and a very strong focus on cost savings. “I've never encountered a cost level like what we're in right now,” Hellhoge says.

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Trine Lerum Hjelhaug, CEO of Lerum.

– Tough competition

Lerum's director says the company must achieve results at least like last year to be able to reinvest.

The company invested NOK 21.3 million in new production equipment in 2023, according to the calculations.

Our devices need to be renewed, and we are required to constantly market ourselves. “We work on small margins and have to have a constant focus on getting better,” she says.

The company's total costs increased from NOK 692 million in 2022 to NOK 778 million in 2023.

Trine Lerum Hjellhaug says the company has focused on cost savings and efficiency in 2023.

– Last year we focused greatly on saving energy. These measures have reduced electricity consumption by seven percent from 2022. They provide a good “motivation” when you see that it is possible to take measures that are beneficial for the planet.

The board writes in the annual accounts that Lerum's future prospects look good, with an increasing rate of innovation, strong brands and a developing product range.

-We believe in what we do, and we want to be a relevant supplier in the future. In the end, it is the consumer who chooses the products he wants to buy, says Lerum's director.

– It's a really tough competition. “If we want to be financially sustainable moving forward, we must be competitive,” she continued.

Vulnerable to political changes

While the jam category is growing in volume, the concentrated drinks category is declining in volume, while there is some progress in sales value, the company writes in its annual accounts.

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In the Swedish market, juice brand ZERoh! It has strengthened its position over the past year. The same juice was launched in Finland in April 2023, and feedback towards the company has been positive so far.

Temperature and weather instability affects fruit and berry productivity, which in turn affects the price level between seasons. Large fluctuations in raw material and currency prices present a challenge in terms of achieving stable purchasing prices, the company wrote.

Lerum writes that, like the rest of the food industry, they are vulnerable to changes in the conditions of the political framework.

In the last two years, there has been an increase in property taxes, which must be paid with money regardless of whether the company makes a profit or not. These taxes give the company a significant competitive disadvantage and a dangerously large reduction in available investment funds, Lerum writes.

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Dalila Awolowo

Dalila Awolowo

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