No Super foothold overseas without grit

PHOTO: No Super foothold overseas without grit

SINGAPORE - Consumers here are familiar with the instant coffee mixes from Super Group but not many may know that the locally listed food and beverage maker is also the exclusive manufacturer of the popular Pringles potato crisps outside of the United States.

It was under fortuitous circumstances that consumer goods giant Procter & Gamble, the former owner of the Pringles brand, ended up partnering Super.

"No one believes we manufacture Pringles. We were planning to make our own potato chips about eight years ago, but Procter & Gamble found out and asked me to manufacture for them instead," said Super's chairman and managing director David Teo, 63, while brandishing a can of Super brand potato chips that the firm had originally intended to produce.

"They sent a guy here from America to discuss the terms. If the terms and conditions are good, why not?" he added.

The partnership was a culmination of years of efforts by Super to gain a strong foothold in overseas markets for instant food and beverage products, beginning in 1987 with the marketing of its instant coffee, tea and cereal mixes to consumers in South-east Asia.

Instant coffee products are synonymous with Super and remain a key contributor to its earnings.

Beginning with three-in-one instant coffee, Super has since expanded the line to include products such as hazelnut-flavoured white coffee mixes.

In the initial years, Super was sourcing key raw materials from external parties.

But in the 1990s, it decided to take control of the manufacturing and quality processes for these materials, which helped it expand its product offerings.

Mr Darren Teo, 30, group corporate strategy and business development manager, and the son of Mr David Teo, said: "We used to buy raw materials from third parties and used to be known as a packer, where we bought coffee, creamer and sugar from different sources, mix it and pack to sell to consumers."

Consequently, newer Super products began to roll off its manufacturing lines - the three-in-one cereal in 1994, soluble spray-dried coffee in 1998 and non-dairy creamer in 2003.

Currently, Super has 15 manufacturing facilities - including ingredients manufacturing and packaging plants - in Singapore, Malaysia, Myanmar, China, Thailand and Vietnam.

Having a strong manufacturing presence in China benefited Super when the country was rocked by a food scandal in 2008 in which local milk powder products were found to be laced with the industrial chemical melamine.

Super's reputation for manufacturing products under stringent quality control "gave Super the chance to expand in our ingredients business as firms shied away from China", Mr Darren Teo said.

Being able to be a step ahead of the competition by identifying the long-term potential of relatively untapped markets like Thailand and Myanmar has allowed Super to expand rapidly across the region.

"This is mainly due to the first-mover advantage we have in places like Thailand and Myanmar, where we introduced the three-in-one coffee mix concept and brand very early on.

"We also constantly advertise and build the brand in consumers' minds," said Mr Darren Teo.

This commitment to branding extends to tailoring products to meet the consumer demands of various markets such as Japan, where Super exports its Cafe Nova coffee products to.

Super aims to forge ahead with its regional expansion - it is setting its sights on new markets such as India and Mongolia, where it is setting up a plant.

Mr David Teo said: "We are preparing to go into India. It's still early as we have not found the right partner but I seriously want to invest in India."

In a drive to diversify, Super began selling manufactured ingredients to third parties in 2007.

This resulted in the repositioning of its business model - revenues are mainly derived from its core branded consumer products segment followed by the food ingredients segment.

Last year, Super posted a revenue of $519 million, of which $355 million came from sales of branded consumer products.

Having led Super's regional expansion after surmounting numerous hurdles, Mr David Teo advises small and medium-sized enterprises (SMEs) to persevere in growing their business overseas even if they stumble along the way.

Mr David Teo cited the example of how Super gained majority control of an unprofitable joint venture in China, revamped its management and turned it around to post a profit.

He said: "In China, we made losses for four to five years before we could turn the business around.

"We also have a lot of other business and products in other countries which support that.

"You can't shut a business down just because it failed in the first few years, it could break even in the third year and start making money in the fourth."

rachaelb@sph.com.sg


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