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Award winners Europe Denmark

A Danish family business called Bagger-Sørensen

has been at the forefront of the global chewing

gum industry for more than 100 years. Now

under the management of the fourth generation,

Bagger-Sørensen has thrived for so many years

as a family business thanks to the determination

and innovation of every generation. And

third-generation member Holger Bagger-

Sørensen, who recently stepped down from his

responsibilities at the gum maker, is the living

embodiment of these qualities.

Europe

North America

Latin America

Asia-Pacific

Holger Bagger-SørensenBagger-Sørensen & Co. A/S

“When you’re in the gum business, you can’t take yourself too seriously.”

Holger Bagger-Sørensen,

Past Chairman, Bagger-

Sørensen & Co. A/S

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Executive and Chairman of the group, believes that being a family business is a big reason for the success of the company.

“The long-term perspective has given us the patience and stability to succeed,” he says. “Without this, we would have long ago been sold off to a competitor and be just a footnote in the history of some other corporate group.”

Holger illustrates this point by relating the story of the group’s experiences in Russia. Bagger-Sørensen went into Russia with their chewing gum in 1989, as the Cold War was coming to an abrupt end. “It was a great success, but then the Russian economy melted down in 1998, and we still had a half-finished factory there,” he says. “So we were left with the decision of whether we should just leave it and take the loss, or go on. We decided to go on and trust in the Russian economy recovering. If we had taken that decision as a public company, my managing director and I would have been sacked a long time ago. I often laugh when I think about this.”

Before Holger joined the family business in 1971, he worked for the big consumer goods company Unilever in Copenhagen. But once he joined the family business, it did not take long before he was fully engaged. “In the 1980s, I got the [go-ahead] from my father to steer the business,” says Holger. “And from there, we launched a major restructuring process, which saw much more engagement and education with the staff, and the bringing in of budgets and strategic plans.”

A professional board of directors from outside the family was also established. Back then, Holger introduced what he called the “10 commandments” for the company — a set of best-practice guidelines for all staff to follow. These included

transparency, the encouragement of ideas and team spirit. Nevertheless, with competitive pressures mounting in the global consumer gum market, Holger and his family decided to sell the Dandy brand business — and the factory in Russia — to Cadbury Schweppes in 2002. It proved a masterly move on the part of the family, because it enabled them to realize capital to start new ventures, while retaining a large part of the family gum business. “We had the business-to-business part and the pharmaceutical side,” says Holger. “And we used a large sum of the money we got from selling Dandy to reinvest in these sectors.”

Chewing gum may seem to be about as American as you can get. But a big role in the development of the chewing gum industry has been played by the Danish Bagger-Sørensen family and the company it founded 100 years ago.

Based in the Danish city of Vejle, the family business called the Bagger-Sørensen Group has created a number of the world’s great chewing gum brands. At the same time, the group has been at the cutting edge of the development of the gum industry for much of the 20th century and beyond.

World’s biggest gum manufacturer

Today, the Bagger-Sørensen Group is the world’s biggest private-label gum manufacturer — making gums for sale under other companies’ brands. And it also has a share of more than 35% of the world’s nicotine gum market.

The group is divided up into a number of subsidiaries, including Gumlink, which, primarily in a joint venture with Turkish Ülker, deals with the private-label gum market; and Fertin Pharma, which specializes in developing and manufacturing medicated chewing gum for the pharmaceutical industry. A global business, with its main manufacturing plants in Turkey and Denmark, and big research and development facilities in India and Denmark, the Bagger-Sørensen Group employs around 1,750 people. And the business is still 100% owned by the family.

Holger Bagger-Sørensen, a third-generation member of the family that founded the business, and the former Chief

No doubt Holger’s resolve during difficult times is thanks in part to what he learned from the experiences of the two previous generations. Founded in 1915 by Holger’s grandfather — also called Holger — in his backyard, the company was initially a maker of candy tablets, and only started chewing gum production in 1927.

Production started in the backyard

“When my grandfather and father decided to export gum, they had to come up with a new brand,” says Holger. “My father’s cousin came up with the idea of ‘Dandy’ for the name because, back then, Americans used to say that about everything new

and smart.” The Dandy brand was a huge success for the family business and exported around the world.

After the first Holger died in 1943, his son Erik took over the business. Erik worked hard to rebuild the business after the Second World War. And under his initiative, a new gum brand called Stimorol was launched in 1956. “The Stimorol gum had a very particular taste — the flavor that grows on you — and soon became a big export success for us, and all our sales companies abroad were established around that brand,” says Holger.

Award winners Europe Denmark

Second-generation Erik Bagger-Sørensen and his products.

Third-generation Holger Bagger-Sørensen and his products.

01 Holger Sørensen founded the business in 1915; 02 He invented the company’s first chewing gum, “Vejle Tyggegummi” in 1927; 03 The first factory in Vejle around 1915.

01 02 03

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The remaining businesses were rebranded Gumlink and Fertin

Pharma. Another Bagger-Sørensen company, called Okono, has

been founded to, among other things, sell e-cigarettes with

nicotine fluids from Fertin Pharma A/S. An investment company called Vecata Invest has also been set up, which invests in start-

ups, primarily businesses in the biotech and medico sector.

Huge research and development investments

Holger says the pharmaceutical business is today the most

interesting and innovative part of the business. “There

are potentially many pharmaceutical applications we can

incorporate into gum,” he says. The Bagger-Sørensen Group

is currently the world leader in this area, partly because of the

group’s first-mover advantage. But Holger is very aware that the potential for profit means that competition in the sector will only increase. As he says, “Where there is honey, the bees will come.”

And that probably helps to explain why such a large amount

of the company’s profit gets ploughed back into research and development.

But the development of the various gum businesses will be more

of an issue for the next generation to manage. A few years ago,

Holger decided to step down from his responsibilities in running

the gum businesses. His two sons — Steen and Claus — are now

chairmen in all the different companies.

Holger’s sons have outstanding role models in the form of their

father and, of course, the generations that preceded him. They

can also take heart from one of Holger’s great quotes: “When

you’re in the gum business, you can’t take yourself too seriously,”

although today, as the production has turned more and more to

pharma, a great deal of seriousness is needed. Putting all this

together should give the fourth generation a winning formula to

ensure that the Bagger-Sørensen Group continues to prosper as

a family business for many years to come.

Award winners Europe Denmark

Holger Bagger-SørensenPast Chairman of the Board

Company name: Bagger-Sørensen & Co. A/S

Generation(s): Third and fourth

Founded: 1915 in Vejle, Denmark

Industries: Confectionery and pharmaceutical products

Employees (2014): 1,750 (all production companies, including joint ventures)

Revenue (2014): Approx. DKK1.1b (€146.7m) (Bagger-Soerensen & Co. A/S, Fertin Pharma A/S and 50% of joint venture revenues)

“The long-term perspective has given us

the patience and stability to succeed.”

Holger Bagger-Sørensen

The actual Dandy factory — inaugurated in 1972.

Holger with his two sons Steen and Claus at the inauguration of Green Tech Center in May 2014.

An early Stimorol advertisement.

The Fertin Pharma FDA factory, which was inaugurated in 2004.