In Finland, oat hulls are often feed for reindeer. But even in Finland, there aren’t enough reindeer to eat all the oat hulls left over from the mills of Fazer, the Nordic market leader in bakery and confectionary. So the company came up with a novel way of turning the oat hulls into a sugar substitute for healthier candy – xylitol.

The benefits of xylitol as a natural, healthier alternative to sugar have been mostly accredited to the Finnish professor Kauko Mäkinen, known as the father of xylitol, who conducted a series of studies at the University of Turku in Finland in the 1970s. In what became known as the Turku Sugar Studies, Mäkinen and his colleagues showed that xylitol significantly reduced dental plaque and cavities compared to regular sugar that has the opposite effect.

Auvo Kaikkonen, the European Investment Bank’s senior life science specialist, who went to medical school in Turku at the time, remembers the studies well. “It was this big, revolutionary thing back then,” he says.

Later, when Kaikkonen returned to the United States for his post-graduate studies, he saw xylitol all over the place, in chewing gums in particular. “Then a strange thing happened – some competitors started spreading rumours about possible adverse health effects, and the products vanished from the shelves, almost overnight,” he recalls. “It took a long time to disprove the rumours and for xylitol’s reputation to recover.”

A growing market for natural sugar substitutes  

But recovered it has. Fed by concerns around obesity, diabetes and heart disease, the market for low- or zero-calorie, high-intensity sweeteners ballooned to almost $2.4 billion in 2017. The market includes artificial or synthetic sweeteners such as aspartame and saccharine, but also natural sweeteners derived from the South American plant stevia, Asian monk fruit – and xylitol. Kaikkonen, whose favourite Fazer candy is salty liquorice pastilles called Salmiakki, notes that demand for natural sweeteners like xylitol are expected to grow rapidly in the coming years.

Until now, the majority of xylitol has been produced, surprisingly, from wood pulp, and corn. Fazer has been in the milling business for almost 50 years and has been milling oats since 2013. Even if oats were initially milled for bread, they are increasingly seen as a superfood and used for many other things as well, says Ulrika Romantschuk, Fazer Group’s executive vice-president for communications and branding. “There are so many ways to use oats. We’re now also producing ice cream out of oats, and even an oat block that people use instead of cheese,” Romantschuk says. “We will be doubling our oat-milling capacity to keep up with all the demand.”

One of the by-products of all these oats is oat hulls: the husks that hide the oat grains. While oat hulls are often used as animal feed, only horses and reindeer can digest them. Therefore, most of the oat hulls currently get burned as biomass for energy.

Now Fazer has come up with an innovative process for producing xylitol out of the discarded oat hulls that were found to be rich in xylose, from which xylitol can be derived. The European Investment Bank signed a €40 million loan agreement with Fazer to finance the construction of a new plant to produce xylitol, and other research, development and innovation activities in the coming years.

Professor Mäkinen, the father of xylitol, was present at the plant’s ground-breaking ceremony. He said xylitol was as Finnish as the composer Jean Sibelius and going to the sauna, so was excited to see domestic xylitol production return to Finland.

EIB’s loan officer Lasse Tourunen (favourite Fazer confectionery: Fazer Blue milk chocolates) says that the new innovative process means that Fazer will go from being an importer of xylitol to a supplier. The company expects to be able to produce 4 000 tons of xylitol from around 20 000 tons of oat hulls per year, far more than it needs for its own products. There will still be plenty of leftover oat hulls for Rudolph and the other reindeer, but Fazer will also be able to start supplying xylitol to other companies, for different products such as toothpaste, mouthwash – even cough syrup.

As Finnish as Santa Claus

By now, Fazer has become as Finnish as, well, xylitol and Santa Claus (and Jean Sibelius and saunas, presumably). For decades, its candy brands – Tutti Frutti, Dumle, Geisha – have been the favourites in the Nordic countries. No Christmas there goes by without candy from Fazer.

Yet the food giant is not resting on their laurels, but continues to innovate. Fazer’s growth is increasingly driven by products for people who are sustainability conscious and those looking for dietary substitutes. Traditional sugar confectionery and chocolates are balanced with novelties within bakery and artisan breads and a growing number of plant- and oat-based products. .

“Having candy that is good for your teeth is a dream come true,” he says.

So put a little xylitol in your stockings this Christmas.