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Cadbury Malaysia halal saga

Cadbury finally was able to breathe a sign of relief following the official recognition by JAKIM that the two variants of its chocolates are halal. The health ministry first announced two samples of Cadbury chocolates contained traces of porcine DNA after much speculation on the social media. Now, we know that it was a health officer who leaked the preliminary report on Instagram. An investigation is being carried out by the ministry against the person who jumped the gun.

cadbury 3
We also being told the test was carried out by a lab that is not accredited and there may be possible contamination of the initial samples tested by the health ministry as they do not come from the factory. I wonder if the lab officer had eaten bak kut teh and forgotten to wash his hands before handling the Cadbury chocolate. Even if the chocolates were bought from the market, the content should be the same as those coming straight from the factory because their packaging should be intact.

Nestle Malaysia

What we see from this Cadbury halal saga is once the news broke out, multinationals quickly issued notices on their websites/social media pages to assure their consumers of their product halal status. Nestle Malaysia issued the notice on 26 May 2014, followed by McDonald’s the next day on 27 May 2014.

Muslim Consumers Association of Malaysia (PPIM) boycotting Cadbury

Malaysian Muslim groups reacted strongly with calls for “jihad” on Cadbury and “boycotting” all Cadbury products. According to another group Perkasa, “they [Cadbury] have betrayed us Muslims by putting ‘haram’ elements through the foods we consume in our body, to weaken us Muslims,” said Perkasa Selangor chief Abu Bakar Yahya. There were even calls by certain people of the need blood transfusion to replace blood to cleanse one’s blood due to the consumption of the tainted Cadbury products. Cadbury was called on by the Allied Coordinating Committee of Islamic NGO to pay for blood transfusions.

Bourbon Cookie not halal

Strangely, a similar event happened in Indonesia as the Cadbury saga unraveled. A consumer broke the news on social media on 18 March 2014 that Indomaret, one of the biggest minimarket chains in Indonesia, was selling non-halal Bourbon Cookie from Japan. The retailer had recalled the product and said it was only sold in 30 out of 9,400 stores. Indomaret explained on 23 May 2014 the cookie manufacturer had changed the ingredients without notifying the importer. The National Drug and Food Control Agency (BPOM) finally issued a total recall of all the affected products on 29 May 2014.

Unlike their Malaysian counterparts, Indonesian consumers did not react drastically probably because the product was not popular and few consumers had eaten it. There were surprisingly little or no backlash against Indomaret with calls for Jihad against the minimarket chain for selling the non-halal biscuit. The contrasting responses in Indonesia and Malaysia show religious bigotry and extremism in Malaysia have reached a dangerous level.

Companies operating in Malaysia have to ensure their halal-certified products remain halal as consumer backlash can be very severe.

Interesting case of no made-in-Thailand Red Bull in China

If you wonder why there is no made-in-Thailand Red Bull in China given the fact TC Pharmaceutical Industries can easily ship its Red Bull from Thailand to Yunnan. The reason is starting 24 March 2006, China’s quality watchdog, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), banned the import of made-in-Thailand Red Bull energy drink citing excessive caffeine content. Only travelers are allowed to bring two cans each per person for self consumption purposes.

So this solves the riddle. However, it also highlights the fact that the Red Bull made and sold in China is less potent than the Thai version. Perhaps you need two made-in-China Red Bull to keep you awake. Group buying of made-in-Thailand Red Bull like the one below is also illegal.

Group buying of Thai Red Bull on yuanchantuan.com in 2012

 

New Pirelli energy drink debuts in China

Another new energy drink has appeared in China as the country welcomes the arrival of summer. The Pirelli (倍耐力) energy drink contains taurine, nicotinamide, caffeine and vitamin B6 and sells in a 428ml black-colour, contoured PET bottle. The manufacturer is Pirelli International Holdings (倍耐力国际控股有限公司), a Hong Kong-invested company with a production line in Guangzhou.

Lamborghini is the “official energy drink of the 2012 China Formula Grand Prix”

Pirelli is another line of energy drink that rides on the Italian motoring theme. The closest equivalent is the  Lamborghini (兰博基尼) energy drink. Lamborghini not only is into energy drink, its other ranges include some unlikely candidates such as coconut drink, milk tea, mango juice with aloe bits and mocha drink. The producer of the Lamborhini range is Beijing Hyperflavour International Trading Co., Ltd. (北京惠远普国际进出口贸易有限公司), which first entered the market in 2011 through a partnership with Lamborghini (Italy) Food International Group Limited registered in Hong Kong.

The origins of both Lamborghini and Pirelli seem dodgy. Italy’s Tonino Lamborghini does make energy drink. However, it is not known if Tonino Lamborghini has any connection with Lamborghini (Italy) Food International Group.

Coconut juice
Mango juice with pieces of aloe

Alfamart – target of break-in, cashless payment the solution?

Alfamart minimart in Indonesia is a popular destination for armed robbery. Below is a list of the most recent armed robberies at Alfamart in May 2014:
27 May 2014: 4 armed men robbed the Gading Rejo store in Pringsewu, Lampung, Java
25 May 2014: 2 armed men robbed Rp 12.2 million (USD 1,026) in cash and cigarettes from an outlet in Blimbing, Kota Malang, Java
21 May 2014: 3 armed men took several hundred thousand rupiah in cash and cigarettes from an outlet at
Jalan Sisingamangaraja in Medan, Sumatra
All three cases involved people armed with weapons including knives and guns and all they wanted were cash and cigarettes. In all three cases, the police had not made any arrest yet.
Placing security guards in each store is exorbitant. To deter robbery, Alfamart needs to ensure there is only minimum amount of cash kept at the cash register machine. It also needs to encourage consumers to turn to cashless payment. Cashless payment will probably be the next frontier for Alfamart going forward not only to discourage armed robbery but also to encourage more spending by consumers.
Taken from Alfamart 2013 presentation

Coconut water in smaller carton and active lifestyle positioning hold the key to success in Malaysia

Image converted using ImgCvt

Coconut drink as a category has not been successfully promoted in Malaysia. Coconut is native to Malaysia and fresh coconut is readily available in restaurants and at roadside stalls. Could it be Malaysian consumers have acquired a taste for the real coconut and will not try something rather artificial from the pack?

If you look at Indonesia and the Philippines, coconut is also native to the two countries. One would think there will be no market for ready-to-drink (RTD) coconut juice in can/carton in those markets. If you go to Indonesia, you will likely come across the popular Hydro Coco, which is made by local Kalbe Farma. In the Philippines, you will find Vita Coco, which has just been launched in the country by the US coconut juice maker in cooperation with local Century Pacific Food Inc. Vita Coco is made from Philippine coconuts and retails in a 330ml pack for PHP35 (RM2.56 or USD0.80).

Why is Hydro Coco (formerly Fatigon Hydro) so successful in Indonesia, a nation that is not short of real coconut fruits? The clue can be found in the product tagline “Love Coco, Love Active.” Hydro Coco is positioned as a natural ion replacement drink for those who are active. The active lifestyle marketing is similar to F&N 100Plus, the leader in the Malaysian isotonic drink segment except 100Plus is not a natural drink. The Hydro Coco in the 250ml carton pack also makes it the perfect drink for on-the-go occasion as it is easy to carry around.

In contrast to the active lifestyle position of Indonesia’s Kalbe Farma Hydro Coco, the coconut water in Malaysia focuses more on the health benefits. Tropicana Coconut Water, launched in early 2014 stresses the “goodness” of coconut water. The product is described in the press as “great pick-me-up on hot days that will help keep you hydrated” in The Star and “beat the blazing heat and stay hydrated with Tropicana Coconut Water; rich in minerals and electrolytes like potassium and magnesium.” in Marketing Magazine Malaysia.

Drinking from a family pack on a hot day?

Think for a moment, would you be drinking coconut juice from a 1 litre family pack on a hot day? So, the choice of the family pack is simply wrong. Tropicana should introduce another smaller 250ml pack for on-the-go consumption.

Also, the “goodness” message is a waste of precious marketing budget. Consumers know only the real coconut juice will give them all the nutrients.  The money should be spent on promoting the active lifestyle positioning such as a natural alternative to isotonic drinks to replace all the lost ions.

In order to grow the coconut juice category in Malaysia, you need to have a smaller pack for on-the-go consumption and have a more relevant product positioning such as active lifestyle that is relevant to consumers who already have easy access to the real coconut juice.

Alfamart to open 100-200 stores in ASEAN, to set up distribution centre in the Philippines first

Alfamart announced on 19 May 2014 it plans to open 100-200 outlets in ASEAN (excluding the Philippines) and open another 1,200 stores in Indonesia in 2014. Capex allocation for 2014 ranges from IDR 1.8 trillion (USD 157 million) to IDR 2 trillion, up from IDR 800 billion in 2013.

What about the Philippines? The company said it will be a joint venture with Alfamart being a minority shareholder, said PT Sumber Alfaria Trijaya managing director Hans Prawira. The name of the local joint venture partner was not disclosed. One of the most interesting things revealed by Prawira is negotiation has not reached the final stage. The company will first set up a distribution centre before opening the retail outlets.

 “Belum itu, kan masih perjanjian awal, belum final business plannya. Tapi memang bangun pusat distribusi terlebih dahulu, karena sebelum bangun toko ritel kita harus bangun distribusi dulu,” papar Hans.Link [The business plan is not yet final. Will establish the distribution centre first because you need to set up the distribution  before you can  have the retail outlets, said Hans]

The joint venture process is expected to be completed in 2014. Alfamart aims to start operation in the Philippines within 2014. The stores will be leased.

Another intersting thing about the announcement is the plan to open 100-200 outlets in ASEAN (excluding the Philippines). Which other countries will Alfamart enter apart from the Philippines, a country with strong similarities with Indonesia. Malaysia and Singapore are out of the question as Malaysia already has a very strong minimart scene with KK Mart and 99Speedmart, while Singapore, a island state, is more suitable for convenience store.

What Alfamart has in mind would be a place where the traffic is still dominated by pedestrians and motorcycles. The place also has to have terrible traffic jam and there is still a lack of modern proximity stores. 

Vietnam fits the bill. 

Vietnam
However, the layout of the Alfamart store in Vietnam will have to adapt to the long and narrow lot. It would be interesting to see if Alfamart is able to modify its store to fit the unique condition in Vietnam where there will be no spacious parking in front of the outlet.

 

Jalna Greek yogurt launched

Australia’s Jalna is the latest entrant into the Greek yogurt mania in Malaysia. At Village Grocer, 1Mont Kiara, the 500g Jalna Low Fat Natural Yogurt is selling for RM 25.99. The interesting thing about Jalna is it comes in a cute plastic pot.

Store check at Village Grocer, One Mont Kiara, 28 May 2014

Gram RM RM/KG
Fage Total 2% Natural Greek Yoghurt 500 31.99 63.98
Fage Total 0% Fat Free Greek Yoghurt 500 31.99 63.98
Jalna Low Fat Natural Greek Yogurt 500 25.99 51.98
Chobani Yogurt Plain 0% Fat 907 34.99 38.58
Nestle Greek Yogurt Natural 470 9.9 21.06
Sunglo Greek Yoghurt 900 14.3 15.89

Source: Mini Me store check

Related posts:
Entry of Chobani & Emmi shows Greek yogurt thriving in Malaysia
Made-in-Australia Chobani arrives in Malaysia & Singapore
Latest news from the Greek yogurt front line in Malaysia
Chobani Greek yogurt upsized to 907g
Emmi Greek style yogurt has highest protein 
Yogurt pouch war

Freenergy isotonic drink by Huiyuan

China’s biggest pure juice maker Huiyuan has come up with another new product, this time isotonic drink. Known as Freenergy (飞能), this product is meant for people who “love to sweat.” The target audience is young active white collar consumers living in tier one and tier two cities with medium- to high-levels of income. They exercise purely to release stress and like to enjoy the sensation of sweating after exercising.
Freenegy
With FIFA 2014 just around the corner, the launch of Freenergy with the football theme is timely. The drink is also the official fruit juice supplier to the 2014 Chinese Super League (CSL) football matches. The 500ml Freenergy is a hybrid isotonic drink with 10% fruit juice content. The three flavours are lime,  peach and grapefruit.
Juizee Pop sparkling fruit juice
Huiyuan is pinning its hopes on other non-juice beverages including bottled water, tea and carbonated soft drinks (CSD) to drive growth. In 2011, it introduced the Juizee Pop series with 10% fruit juice content. Back then, the company expected the new sparkling fruit juice to account for one-fifth of its sales by the end of 2012. Indeed, sales of other beverage products including Juizee Pop accounted nearly one-fifth of sales in 2012 but that amount included OEM, bottled water and tea, not purely Juizee Pop.

Huiyuan revenue split

After the initial strong sales growth in 2011-12, other beverage as a category has lost its momentum with sales value falling 14.3% year-on-year in 2013 following a 16.3% decline in sales volume. Juizee Pop has lost its allure. To regain the growth momentum, Huiyuan now turns its eyes on isotonic drinks, which is growing at a strong double-digit growth, much faster than the CSD category as consumers are increasingly leaving the CSD category for healthier, functional drinks. It is still too early to tell if Freenergy succeeds in its mission to reactive growth. One thing for sure is Freenergy will be competing with Danone’s Mizone, which is growing at an average 40% and Danone expects Mizone to reach EUR 1 billion turnover in China soon.

Mizone

Herbal tea drinks for greasy food

"Oil is more worrisome than internal heat when eating hotpot", says Shihuatang
Hot pot, the prennerial favourite dish in China, is often paired with Wang Lao Ji (王老吉) or Jia Duo Bao (加多宝) herbal tea drinks. Something similar to Pepsi/Coca-Cola eaten together with fried chicken, pizza or burger. Jia Duo Bao (previously holding the licence to Wang Lao Ji) has successfully promoted Wang Lao Ji as the drink to reduce internal heat. “Afraid of excessive internal heat? Drink Wanglaoji!” Now, whenever you eat hotpot, Wang Lao Ji or Jia Duo Bao are there for you.

“Afraid of excessive internal heat? Drink Wanglaoji!”
New comer Shanghai Herbaceous Beverage Co Ltd (上海十花汤饮品有限公司)  is attempting to topple Jia Duo Bao/Wang Lao Ji by focusing not on the internal heat marketing strategy but on greasy and oily food. Shihuatang’s tagline is “Afraid of oil food, drink Chivaton (Shihuatang).” Chivaton or Shihuatang (十花汤), literally “Ten Flowers Soup” in Mandarin, is made from 10 ingredients including monk fruits, kudzu roots, hawthorn berries, licorice, lotus leaf, chrysanthemum and radish seeds.

Chivaton – “Afraid of oily food, drink Chivaton”

The battle is essentially over the concepts of internal heat and oily/greasy food, whichever resonates with consumers the strongest. Whenever you have the symptoms of sore throat, ulcer, lack of sleep, acne and constipation, you know you have internal heat. You get internal heat not just from eating hot pot but from eating fried and spicy food, not drinking enough water and stress. Internal heat is also common during winter due to the excessive consumption of hot pot and not sweating enough. Therefore, internal heat is universal and presents a big market for herbal tea drinks to help consumers cool down their internal body system.

Internal heat

The fat-addressing appeal is only limited to the eating occasion. You will only think of drinking Shihuatang when you are eating oily and greasy food such as hot pot with the intention of diluting the fat. Shihuatang will only work if it is able to convince consumers the drink can help dilute the fat in oily and greasy food. Therefore, the market for Shihuatang is smaller than the herbal tea drinks represented by Wang Lao Ji/Jia Duo Bao as Shihuatang is not a drink for all occasions.

In China, consumers turn to detox tea and slimming tea to slim down. Such marketing materials usually show a woman with a very slim contour such as in the example of Besunyen slimming tea. Despite the popularity of packet slimming tea and detox tea, ready-to-drink (RTD) slimming tea hasn’t really taken off in China unlike in Taiwan with the success of the “oil cutting” (油切) concept there. In China, Taiwan’s Heysong Oil Cutting Barley Tea (黑松油切麦茶) with its contour-shaped bottle has not been successful due to the choice of the barley taste. Barley is not the most popular RTD tea flavour in the country, something Heysong needs to address.

Besunyen Slimming Tea

Heysong

 

Japan’s Suntory has also tried associating its oolong tea in China as the perfect companion for oily and greasy food. According to the company, the oolong tea helps to dilute the oil in the food. Consumers can enjoy all their favourite food without having to fear of gaining the extra fat.

Enjoy all the good food without having to worry about oil.

Is oolong tea a good fit for pizza and other oily and greasy food? I don’t think. For Shihuatang, it has the added advantage in taste. Shihuatang is a sweetened herbal tea and it builds on consumer acceptance of Wang Lao Ji/Jia Duo Bao as the drink for hot pot. Rather than focusing on internal heat, Shihuatang addresses consumer concern, both male and female, about getting fat from consuming fatty food. Such a new health positioning ensures a ready market for Shihuatang but the key challenge is to convince hot pot chains to carry Shihuatang. Wang Lao Ji/Jia Duo Bao, which have worked so hard to make their products available in the hot pot channel, will definitely not make the task easy for Shihuatang.

Is this the real Monster Energy?

One thing caught my attention on a Tuesday morning is a report by a Shanghai news portal (online.sh.cn) of the launch of a new energy drink at Shanghai’s Chair Club bar. The new energy drink is called 怪兽能量 (Monstroe?) and contains Brazilian guarana and ginseng from Changbai Mountain in North East China. Not sure about the exact spelling though. There is still no official site for the drink and the name on the picture is not clear.
Nonetheless, the name 怪兽能量 looks rather similar to Monster Energy’s Chinese name 怪物能量. The only difference is the second character 兽 vs 物. Using the trusty online Chinese dictionary MDBG, both 怪兽 and 怪物 means monster.
A further search on the name of the company chairman 刘凯胜 Liu Kaisheng has revealed he is the chairman of 华胶饮品(上海)有限公司 Huajiao Drink (Shanghai) Co Ltd, founded in 2013. The company Huajiao has just launched the drinkable E Jiao beverage in Shanghai in March 2014. E jiao (阿胶) is a donkey-hide gelatin, used in traditional Chinese medicine (TCM) to treat bleeding, dizziness, insomnia and dry cough.

Drinkable E Jiao beverage

So, the so-called Monstroe energy drink looks like a knockoff of the real Monster Energy. Most Chinese consumers will never know the difference as Monster Energy is a rarity in China. It is easier to buy a shirt with the fake Monster Energy label on it than buying the real Monster Energy drink in China. The major B2C sites Alibaba’s Tmall, JD.com and Wal-Mart’s Yihaodian.com do not carry Monster Energy. Below is what you get when you type 怪物能量 on Tmall.com – A cartoon called Killer Energy and a Monster Energy pillow, most probably a fake too.

The company behind Monstroe is clever. It pays to have the first mover advantage in China where the energy drink market is growing at a double-digit rate and is largely dominated by Red Bull. The Red Bull in China is all made by Thailand’s TC Pharmaceutical Industry and not by the Austrian Red Bull GmbH. The Austrian company only recently received approvals from the Chinese government to sell its European-made Red Bull in the country. But it is too late for Austrian Red Bull GmbH as Chinese energy drink consumers are already accustomed to the Thai version, which has been around since 1995.

For Monster Energy, it is never too late to enter China now. The first thing to do is to secure your brand.

Updated:

The Chinese name for Monster Energy is Monster Claw (鬼爪).

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