Finnish food corporation Fazer is building a manufacturing facility in Lahti, Finland, to produce xylitol from oat hulls in a circular economy innovation using completely new technology. Currently, oat hulls are used mainly for energy production, but Fazer has developed “a unique production process” which utilizes the side stream of the oat milling process.

As part of its growth strategy targeting plant-based products and solutions, Fazer is investing €40 million (US$45 million) in the oat hull-based manufacturing facility to enter the xylitol market, which, according to the company, is expected to grow. 

The investment will strengthen Fazer’s position as a forerunner in value-added grain-based products. In the company’s oat milling process, a substantial amount of oat hulls are derived as a side stream. Oat hulls contain xylose which can be used to produce sugar substitute xylitol.

“We have at hand an innovation wher we combine patentable new technology, healthier options to consumers and an excellent example of an innovative circular economy solution,” says Christoph Vitzthum, Fazer Group President and CEO.

“We believe that xylitol from a plant-based Nordic raw material with a Nordic origin will create interest also outside Finland and the Nordic countries, even globally.”

There are also plans to expand the xylitol production to the company’s mill in Sweden, according to Vitzthum.

The xylitol factory will be built next to Fazer’s oat mill on the Lahti site. The factory will be the first fully backward integrated xylitol manufacturing facility in the world capable of producing many forms of xylitol to cater to the supply needs of the food, cosmetics and pharmaceutical industries.

As consumers continue to seek healthier options to replac refined white sugar and the food industry continues to reformulate in this regard, xylitol “offers excellent potential for future product development,” according to Fazer. 

The company aims to be the only manufacturer producing xylitol from a plant-based raw material of Finnish origin. In addition, xylitol is also an important ingredient for Fazer’s confectionery business – since Fazer is the only company producing chewing gum in Finland.

Work at the Fazer site in Lahti started in February. The oat hull xylitol factory will be a part of the Fazer Lifestyle Foods business area.

Fazer says it is developing its business and product portfolio with a special focus on transforming into a modern sustainable company following plant-based consumer trends. During the past three years, the company has invested approximately €195 million (US$220 million), of which €136 million (US$153 million) has been invested in Finland.

Finland is one of the world’s largest oats producers with oats consumption per capita around 7.3 kg. Moreover, the consumption of oats is increasing by approximately 10 percent a year. The health-promoting properties of this ingredient are well-known in the country and oats are applied to a diverse range of uses, particularly as a raw material for innovative food products.

The growing potential of oats was highlighted earlier this week, in our sister publication, NutritionInsight, which detailed a new initiative aimed at promoting oat consumption and boosting the export potential for high-quality oat products made by the Finnish food industry. 

Industrial production of xylitol is a Finnish innovation which dates back to 1975. 

Xylitol is a sweetener produced from xylose, which is found in various trees and plants, e.g., birch, beech, corn and berries. It is low in calories (60 percent of the calories in sugar) but as sweet as sugar. The most popular xylitol products are chewing gum and pastilles. 

Xylitol has an approved European Food Safety Authority (EFSA) health claim and Fazer is the only domestic xylitol chewing gum manufacturer in Finland.

FoodIngredientsFirst has requested more details from Fazer.