The Tree Essence Lime with Liquorice drink made by The Tree Food Industries Sdn. Bhd. has the potential to make it big in Malaysia. This drink is selling in the San Shu Gong outlet in Jonker Street, Malacca, which sells mainly foodstuff to tourists visiting the UNESCO heritage city. I am not sure if this drink is available through other retail channel.
The selling price is about RM 4.00. The taste is good and the packaging design looks nice. The packaging choice makes the drink fit rather nicely in the hand. However, the prominence of the Chinese characters shows this is a drink mainly for Chinese consumers.
I am not aware of any lime drink with liquorice in the market. If this is available in the capital city KL, I can say it will be a hit.
Collaboration seems to be the way forward for companies offering complementary product lines. The recent example in Malaysia is the Kellogg’s-F&N breakfast combo. The new combo taps into the existing Malaysian consumer ritual of consuming cereals with soya bean milk apart from eating with milk.
Soybean milk has proven to be versatile drink. One of the ingenious ways of drinking soya bean in Malaysia is pairingit with cincau or grass jelly. The end result is a perfectly delicious drink.
Cincau soya bean drink – picture taken from the web
Soya bean makers too have come up with a new pairing to encourage consumers to consume soybean milk and cincau drink. Examples of such include the ones by Drinho and Yeo’s. So the key challenge for F&B makers is to find new pairing opportunities to boost sales by tapping into existing consumer practices or introducing a new consumption ritual such as dipping an Oreo’s into the milk.
Companies looking to innovate can look no further than salt, an everyday necessity. Nowadays consumers are becoming picky about their salt. As a result, ordinary sea salt, used for generations, is losing favour among the middle class. Discerning consumers in Asia are embracing salt that supposedly provides better health benefits including Himalayan salt, French sea salt and Celtic sea salt. The latest salt with health-giving properties that is storming the consumer market in Asia is bamboo salt.
Korean bamboo salt
Korean bamboo salt captures the high ground in terms of wellness (South Koreans are famous for healthy living) and the ability to tap into local imagination (bamboo, grown across Asia, is a symbol of serenity and longevity. Bamboo is also used in parts of Asia for cooking). Bamboo salt is marketed as a cure-all for modern ailments. See the link here. Bamboo salt’s high price point plays in the psyche of Asian consumers who often equate premium price with high quality.
Among the benefits of bamboo salt are preventing skin-related diseases, preventing heart diseases and improving diabetes. One can even add water to the bamboo salt to rinse your eyes and brush your teeth with it. Essentially, bamboo salt is marketed as a product with miracle benefits.
LG Bamboo Salt Toothpaste
In China, bamboo salt is popularly found as a toothpaste ingredient to improve oral health. Not surprisingly, South Korea’s LG is the key player in the bamboo salt toothpaste segment there. There is also bamboo salt organic water in China produced by a company called ShanghaiĀ Xiao Cui Xiong Food (äøęµ·å°čēé£åęéå ¬åø). The application of bamboo salt can be seen in food including cracker, seaweed snacks and nuts snacks and in beauty and personal care products.
Bamboo salt has the potential for wide application. For a start, it can be applied in a product that uses salt as one of its ingredients. Replacing the ordinary sea salt with bamboo salt means that product now has better health claims than its competitor. However, the fundamental question is consumers have to recognise the health properties of bamboo salt. This requires more consumer education.
One of the ways to create awareness about bamboo salt is to produce another highly-successful Dae Jang Geum or Jewel in the Palace, which exposes Asian TV audiences to the rich South Korean traditional cuisines, which eventually led to a surge in Korean restaurants around Asia. The new Korean drama will revolve around the rich heritage of bamboo salt and the drama has to feature popular Korean actors and actresses. An industry-led initiative, probably by the Bamboo Salt Industry Association of Korea, will be needed to produce the drama to popularise bamboo salt across Asia. Only then will bamboo salt increasingly feature in new products in Asia or even in other parts of the world.
Rolanjona é²å °å§¬åØ Bamboo Salt Facial Cleanser
Alfamart Trading placed an ad to recruit pharmacists and licensed nurses in May 2014. This is an old advertisement but what the advertisement implies is Alfamart is going to sell pharmaceutical products in its new mini-marts in the Philippines. Selling medicine will definitely provide the chain with a new revenue stream. It seems Alfamart is positioning itself as a outlet straddling Mercury Drugstore and 7-Eleven.
Ambrosial (å®ę åø) , a new Greek yogurt by Inner Mongolia Yili Industrial Group (Yili)Ā launched in early 2014, is now available in more cities in China. The recent cities where Ambrosial have entered are Chengdu and Chongqing in the western region and Hunan in the central region. The unique thing about the Ambrosial Greek yogurt is it an ambient yogurt drink, which can be stored in room temperature for up to five months. The other unique selling point of this Greek yogurt is it contains 35% more protein than ordinary yogurt.
Sources said Yili has the capacity to make 1,000 tonnes of Ambrosial Greek yogurt a year as of May 2014. With each pack weighing 205g, that represents a production capacity of only 4.878 million 205g packs of Ambrosial Greek yogurt per year. At the moment, a 12x205g pack Ambrosial Greek retails at RMB66. That’s equivalent to a revenue of only RMB 26.83 million calculated at retail price. As a comparison, Bright Dairy’s Momchilovtsi Bulgarian yogurt sales in 2013 reached RMB 3.22 billion at wholesale prices, up 106.5% year-on-year. Another Bright Dairy’s yogurt Changyou (ē ä¼) drinkable yogurt recorded sales of RMB 1.19 billion at wholesale prices, representing a year-on-year growth of 35.2%.
Now, Greek yogurt is challenging Bulgarian yogurt in a country tipped to become a rising start in yogurt consumption. Should Chobani wait or should it start aggressively make China as its next frontier before it is too late? However, if you notice, the Ambrosial Greek yogurt is actually a yogurt drink, not spoonable yogurt.
For the spoonable yogurt category in China, the existing products are yogurt with fruit bites and traditional style yogurt (čé ø儶). These traditional style yogurt usually takes the name of the local province, landmark or city such as old Beijing yogurt, old Mongolia yogurt and even old West Lake (Hangzhou) yogurt.
Yili yogurt with fruit bites and cereals
Mengniu Old Mongolia Yogurt
So far, the Greek yogurt has largely ignored the spoonable segment but it will eventually come and that’s when Chobani can shine if it takes the initiative.
Dairy Farm International, the operator of Giant hypermarket and supermarket in Malaysia, said this in its 2013 annual report. We do not know the exact revenue of Giant in Malaysia but looking at the statement, it does show the food business in Malaysia in 2013 was facing challenges.
Giant is a strange beast. It still has stores in run down shopping malls or malls with low footfall. Examples ofĀ these include South City Plaza in Serdang, the mall occupied by Giant Superstore Taman Connaught and Viva Home, which is a one-stop furnishing mall.
Food retailers in Malaysia are facing problem growing their revenues. Even the likes of Tesco, which is viewed by many as a successful hypermarket chain, only reported 1.83% growth in revenue in the 12 months to end-February 2014, the slowest growth in 8 years.
Tesco Malaysia turnover
What about convenience store? The revenue growth of 7-Eleven slowed to 6% in 2013, the slowest in three years. Despite revenue growing to a single digit, net income managed to grow at an outstanding rate of 27.9% in 2013 due to the shift towards higher margin products.
7-Eleven Malaysia turnover and net income
Based on publicly available information, Aeon Big revenue increased by only 4.4% in 2013 to RM 1.66 billion, which shows once again 2013 was a bad year for food retailers.
Raising the profitability level is the key now as revenue growth grinds to a halt. That is why Tesco is heavily focusing its attention on private label, which offers higher margins. Aeon and Aeon Big have renewed push into private label, while Dairy Farm International’s Cold Storage has made available Casino private label range.
A consumer choosing Tesco private label snacks. Photo taken at Tesco Ampang.
Collectibles is also another weapon in the arsenal. Examples include Tesco’s Heroes and Friends and Aeon Big’s Doraemon figurines.
The emerging minimart scene such as KK Mart and 99 Speedmart has intenstified competition. The growth of neighborhood proximity shopping has drawn customers away from big-box retailers. For daily top ups, consumers including foreign workers are choosing minimarts only going to the big-box shops during the weekend.
The rise of premium homegrown supermarkets such as Jaya Supermarket and Village Grocer have also attracted well-to-do consumers and expats. The cheap and cheerful NSK and Econsave, meanwhile, have cannabalised Tesco and Giant’s price sensitive customers. NSK in particular has been very successful in attracting price-sensitive consumers with a wide array of cheap vegetables and fresh food.
Malaysia’s food retailing sector is becoming increasingly difficult and key players will receive another blow as the GST starts to be implemented on 1 April 2015.
The key future trends for Malaysia’s food retailing sector are:
1.) Proximity shopping with big-box retailers started to move into this space
2.) More private label
3.) Online grocery to attract consumers not willing to make the commute to the outlet
4.) Stores adapting to local need eg. price leader in produce and fresh food
5.) Going upscale with more premium supermarkets
6.) Making grocery shopping an experience where it serves as a one-stop destination for eating, shopping and experience
7.) More collectibles on their way to drive footfall
8.) Supermarket targeting certain ethnic group
This is the type of product that I have been hoping to appear in the market. The new 330ml Cowa coconut water comes in Tetra Prisma Aseptic with a plastic closure to lock in the freshness. The 100% natural juice drink is made by Linaco Manufacturing (M) Sdn Bhd, which is also the manufacturer of coconut cream powder, easy to cook premixed recipes and flavours and seasonings.
The picture below is the same Tetra Prisma Aseptic used for another coconut drink product by a different manufacturer. It just gives you an ideal of the pack.
Cowa coconut drink fills the gap in the on-the-go coconut juice segment in Malaysia. The existing coconut drink in the market are 1L carton pack (Tropicana), cans (Yeo’s) and PET plastic (Icetea Co Sdn Bhd). There is still no mainstream coconut juice in portable carton. Linaco has hit the right note by coming up with a 330ml coconut juice in a grab-and-go portable packaging.
To attract consumer attention, the packaging design needs to be improved. At the moment, it simply lacks the punch. In terms of price, it is sold at Village Grocer (Mont Kiara outlet) for RM 2.99. The taste is not too ideal and can be improvised further.
The Facebook page is at https://www.facebook.com/cowah2o
SCS cheese, the house brand cheese of Auric Pacific Group Limited, now comes in a new clean looking packaging in Malaysia with more white spaces. The new look makes the word Original and the iconic SCS logo more prominent.
Old packaging
The new packaging scheme was adopted for sliced cheese likely as a move to standardise the colour scheme across the whole dairy porfolio.
There is a big market selling collectibles to retailers for use in their in-store marketing activities. The limited-edition Bolario bear introduced by 7-Eleven Malaysia as part of the FIFA World Cup promotion could also be found in Indonesia. The bears were known rather unexciting as Football Bear in Indonesia and it was Carrefour that made them available there.
Similarly, the Marvel and Disney-Pixar super heroes collectibles exclusively available to Tesco Malaysia were also used by the Indonesian Alfamart minimarket chain as part of their in-store campaign.
Owners of animated characters or toy companies are in for a good time as retailers need collectibles to stimulate sagging sales.
A news that caught my eye today was about All Market Inc, the maker of Vita Coco, selling a 25% stake to Thailand’s Reignwood Group, the parent company of Red Bull China. The deal will give Vita Coco access to the China market through Red Bull’s distribution channel. Red Bull is the number one energy drink in China.
You might be wondering why would Reignwood want to buy a stake in All Market and introducing Vita Coco to China? Would Chinese consumers drink coconut juice?
Well, there is already a sizable coconut juice market in China. The top player in the market is Yeshu Group or Coconut Palm Group based in the subtropical Hainan island. Its Yeshu coconut juice range or plant protein drink enjoys strong distribution, which means its products can be found all over the country. The other company is known as Hainan Yedao (Group).
China’s Yeshu Group coconut juice range
The white colour products are sold by Yedao Group. As you can see, most of the coconut juice in China is in a slim can, followed by carton. PET bottle is the least common packaging format for coconut juice.
The Yedao and Yeshu coconut drinks have been in the market for a very long time and consumers have gotten used to their milky taste. The Vita Coco drink can be an alternative to consumers looking for a more watery coconut taste, a drink that can be consumed rather like a sports drink to replenish the energy levels. This everyday ion replenish positioning can make Vita Coca rather similar to Danone’s Mizone, which is the number one isotonic brand in China.
The Yeshu and Yedao packaging also seems rather old fashion and dull. What about their advertisements. Well, Yeshu’s advertisement highlights its natural credential. It claims not to use artificial essence, preservatives and colouring. As a protein drink, it helps to create a soft white skin and makes you voluptuous. Obviously, such advertisements targets women who want to have a better body shape. As the goodness of protein is the key message, this drink has to have the thick protein taste. Coconut drink is classified not as a juice drink in China but as a protein drink, competing with other protein-based drinks such as walnut and peanut beverages.
In contrast with Yeshu, Vita Coco advertisement focuses on the natural hydrating message. Vita Coco does not claim to help to augment the breast size. Rather it is positioned as a hydrating drink with 100% coconut juice. This is something Vita Coco can really excel in China with its ‘natural’ halo. Vita Coco coconut juice can be positioned as a ‘natural’ choice for consumers who does not want carbonated soft drinks, the really sweet ready-to-drink tea and juices and artificially flavoured isotonic drinks. As Vita Coco will slowing make its way into the country, let’s see which product positioning the brand will take in China.
