HUG: ‘We see our strongest growth in foreign markets’

Anna Hug (fifth generation) and Marianne Wüthrich Gross run HUG together in a co-management model. Vera Leysinger / SWI swissinfo.ch

In an exclusive interview, Swiss biscuit manufacturer and baker HUG’s two co-CEOs outline the challenges of expanding internationally, which include navigating Switzerland’s powerful agricultural lobby.

HUG, a food company known, among others, for its traditional Zwieback rusks, has been in the hands of the same founding family for around 150 years. This hasn’t stopped the two women at the helm of the company from embracing new technologies including the use of artificial intelligence (AI) in advertising campaigns and acquiring new companies. In an interview with Swissinfo, the two co-CEOs say they are committed to keeping the entire value chain in Switzerland despite high costs, and that selling the company to a global conglomerate is off the cards.

Strongly rooted in central Switzerland, HUG already sells 14% of its products abroad and considers foreign markets its main engine for future growth. It was at their headquarters in Malters, in canton Lucerne, that Swissinfo sat down with the two co-CEOs. Anna Hug oversees markets and Marianne Wüthrich, a non-family executive, is responsible for operations.

Swissinfo: You jointly lead HUG, working part-time, each shouldering a load of 70%. How does this work in practice?

Anna Hug: We are very satisfied with our current shared leadership model. This two-headed structure works well because we have clearly defined areas of responsibility. Naturally, keeping each other informed and coordinated takes time, but it also gives us the opportunity to develop ideas together.

Swissinfo: How important are foreign markets for HUG?

A.H: Fourteen per cent of our sales come from exports, and foreign markets are actually where we see our strongest growth, as potential in Switzerland is limited.

Our main export products are our “tart shells” (tartelettes), which are primarily produced for the professional sector. Our strongest geographical focus is Europe, a market that has grown very strongly in recent years and now accounts for 50% of our exports. The next key market is the United States, but over the past ten years we have also consolidated our market in the Middle East and, more recently, in the Far East.

As we are too small to have our own foreign subsidiaries, we work with importers. Some of them – for example in America and Japan – are Swiss expatriates. We do not sell directly online to foreign countries, because we do not want to become competitors of our own importers.

Swissinfo: Are you impacted by the trade tariffs imposed on Swiss exports to the US?

A.H: The American market is our largest national market, and of course the tariffs introduced by the current US administration, combined with the strong Swiss franc [which is nearly at its highest in a decade], is a major challenge for us – though not life-threatening.

Ingredients are weighed and prepared for the next steps in the HUG production rooms in Malters, Lucerne. Vera Leysinger / SWI swissinfo.ch

Swissinfo: You also distribute two products from foreign companies, Limonina (lime-juice products) and Dobla (fine chocolate decorations) in Switzerland. Is distributing foreign products a growth area for you?

A.H: Not really. We are repeatedly approached by foreign companies seeking to enter the Swiss market through our distribution network, but we do not consider this an area of growth.

Swissinfo: In 2024 you launched an AI-based communication campaignExternal link for your new co-branded products the DAR-VIDA–Ovomaltine chocolate biscuits. What were your takeaways?

A.H: Our main motivation was to gain experience using AI, as we saw that this technology is now becoming part of the advertising industry. This AI-based campaign was somewhat cheaper than a classical campaign, and it was also slightly less labour-intensive, even though we used three complementary AI tools and created more than 1,000 iterations (prompts). Most importantly, we did not receive a single negative reaction to the campaign from our clients.

In the future, we expect AI to improve drastically, but that does not necessarily mean we will abandon classical campaigns. For instance, our current Christmas advertising campaign is done using traditional methods.

Swissinfo: As an unlisted family business, you are not required to publish financial results. Why did you decide to discloseExternal link several important ones – such as sales (in 2024: CHF131 million, $166 million) and sales growth (4%) both global and by division?

A.H: We are a rather open company, even though we do not disclose certain figures such as profitability. I believe it is important for current and future employees, as well as for other stakeholders, that we communicate transparently and regularly appear in the media.

Anna Hug Vera Leysinger / SWI swissinfo.ch

Swissinfo: Since 1995 you have acquired, among others, four Swiss companies. How was the integration process?

Marianne Wüthrich: We have now fully integrated these companies – including their production lines – even though in some cases it took more than a decade. As for the resulting multiplicity of brands, we now focus on just four of them: HUG, Wernli, DAR-VIDA and HUG Food Service.

Swissinfo: Are you considering acquiring new companies?

M.W: We are indeed open to acquiring new companies. We are also prepared to consider purchasing foreign companies, although we expect this to be a more complex process.

Swissinfo: Many of your competitors, such as Nestlé or Danone, are global conglomerates. How do you remain competitive? Are you tempted to sell your family business?

A.H: We have no intention of selling our family business to a large conglomerate. I am absolutely convinced that our family background and tradition give our company a strong sense of purpose. We are, wholeheartedly, a family business, and I believe this is positively perceived by our stakeholders. Being a small family company enables us to make decisions quickly. We are also totally committed to maintaining Switzerland as our production location. To reduce costs, our production is highly automated, though not fully, because each production line must produce various products.

Swissinfo: Are Swiss food companies at a disadvantage to sell globally compared to foreign competitors?

M.W: Switzerland is not the easiest place to produce food. We have high wages compared to foreign manufacturers. Moreover, due to a powerful agricultural lobby, raw materials such as flour, sugar and milk are two to three times more expensive here than abroad. To meet requirements for a “Swissness” label, we must also source most ingredients locally. It is therefore no coincidence that Swiss biscuit manufacturers – not only us – do not have large export volumes.

Marianne Wüthrich Gross Vera Leysinger / SWI swissinfo.ch

Swissinfo: As you face rising costs in Switzerland, have you considered outsourcing certain back-office functions (e.g., accounting or IT) to lower-cost countries?

M.W: Not at all. For us, “Swissness” means not only meeting the minimum legal requirement (80% of value creation in Switzerland) but also keeping the entire value chain in Switzerland, including back-office functions.

Swissinfo: Why do you think there are so many international large and small food companies based in Switzerland? Is this strong food cluster an advantage for HUG?

M.W: I believe Switzerland has a strong tradition of producing high-quality food. There are also many relevant training programmes and academic degrees. We also have successful start-ups such as Planted (which produces plant-based meat). In my view, the cluster helps us more than it harms us. For example, it is beneficial when you are looking for well-trained talent, even though you also risk high turnover.

However, the food industry in Switzerland is currently under pressure. There are many changes of ownership underway, and this trend will continue. Ownership changes are not necessarily negative, but they can unsettle employees, and they sometimes lead to plant closures or significant workforce reductions. A recent example is the milk-processing company HSN (Hochdorf Swiss Nutrition), which was acquired by an investment firm and drastically reduced its production as a result.

Swissinfo: There are increasing concerns about foods with high sugar and fat content. How are you adapting to this trend?

A.H: There is certainly a trend towards healthier nutrition, and we have a strong answer with our wholegrain-based DAR-VIDA snacks. More generally, I believe consumers are very conscious when they eat our products. They are a small indulgence both sweet and with fats – that is why they taste so good. What matters is eating reasonable amounts.

We have tested reduced-sugar versions of existing products, but to be frank, they do not work particularly well with consumers. However, when we develop new recipes, we make sure to use only the amounts of sugar and fat needed to achieve a good taste. I also notice that there is often a difference between what consumers say they want – for example, less sugar or less fat – and what they actually buy and consume.

In 2008, HUG took over the biscuit company Wernli. The biscuits are still sold under the brand. Vera Leysinger / SWI swissinfo.ch

Swissinfo: Sustainability is very important for HUG. Does this commitment help you win customers, enforce higher prices, improve long-term profitability, and attract and retain competent employees?

A.H: Sustainability is indeed very important for us in many areas, such as raw materials, packaging, energy and climate, infrastructure and processes, waste management, employees and engagement. I do believe our family has been successful for 150 years because sustainability has always been part of our DNA. So yes, I believe this brings – over time – all the benefits you mentioned, except perhaps higher prices, because our sector is very competitive. However, a very negative aspect of the current sustainability trend is that it generates endless reporting requirements – even though such reporting is usually not yet compulsory for SME.

Edited by Virginie Mangin/ds