Nuts about keeping it in the family

Fruits and nuts are considered healthy snacks. And if you're Tai Sun (Lim Kee) Food Industries Pte Ltd, they're good for the bottom line too.

The company has been manufacturing snacks such as roasted nuts, dried fruit and chips since 1966. And 46 years on, it is the same family that continues to manage the company - that of the late founder Lim Jit Siong and his wife, co-founder Han Yew Lang.

Their children - Winston, Sandy and Lawrence - began helping out with the family business during their schooldays. The three used to work in the hours after school, and were gradually given more responsibilities as part of an informal succession plan.

Today, it is this "second generation" that actively runs the company, and has been responsible for a large part of its success.

For example, back in the 1990s, the siblings decided to directly export products to foreign markets instead of relying on an agent - which helped to cut costs.

Subsequently, it was also their decision that it was commercially advantageous to shift production to a factory in Johor Baru - again a move that helped to reduce costs. The Singapore factory (currently in Pandan Loop) became Tai Sun's corporate office and storage facility.

And now the "third generation" is beginning to take on the running of the business.

Of course, the ability to make sound business decisions is not unique to a family business. But the sense of ownership - that this is a business that was started by the family - and the desire to keep it that way has helped to ensure that every new generation of owners does everything in its power to ensure the longevity of the company.

According to Tai Sun's marketing manager Esther Loo, a third-generation family member, the family draws together during tough times and thus ensures that Tai Sun overcomes any challenges that might come in its way.

The late Mr Lim had placed great emphasis on "family harmony", a quality which Ms Loo says has endured till today.

One manifestation of this family harmony is when there is a disagreement with regard to the running of the business. In such a situation, says Ms Loo, there is a "cooling-off period". Family members take a step back, consider the issues independently, and discuss their views together later.

Discussion is a consultative and deliberative process, and senior family members do not dismiss the views of the junior family members. This is because they too realise that the market is changing.

Sense of ownership

In addition, family members know each other relatively well. This helps, even in a professional setting, says Ms Loo. Most importantly, she added, family businesses have a greater sense of ownership, and work is more than just dollars and cents.

Not that the family has neglected the dollars-and-cents department. What began as a modest operation in the kitchen of the family home has now become a relatively large business, with turnover of about $40 million, and a global footprint across more than 10 markets - including Singapore, Malaysia, Indonesia, Hong Kong and the United Kingdom.

This is a far cry from Tai Sun's beginnings. Back in the 1960s, it was commonplace for patrons of restaurants and bars to consume roasted nuts as an accompaniment to drinks and as an appetiser. Procuring these nuts from another supplier would have made business sense. However, restaurants and bars weren't doing that, and had chosen to roast their own peanuts.

This was a business opportunity that screamed out to founders Mr Lim and Madam Han. They began roasting nuts in the kitchen of their home and began supplying them to hotels, restaurants and bars. Over time, the orders increased and the business outgrew their home. Eventually, in 1976, the company moved its operations to a factory in Jalan Senang.

Today, Tai Sun markets its products under three brands. The first, and probably the best known, is its flagship "Tai Sun" brand, which is used to market the company's range of flavoured nuts.

The company's second brand, "Nature's Wonders", is used to market its more premium range of nuts and is targeted at health-conscious consumers. For this reason, the nuts are only lightly roasted and remain unflavoured so as to maintain both their natural flavours as well as their nutrients.

The company's third brand, "UCA Cassava Chips", is similarly targeted at the health-conscious. Introduced following a rebranding exercise spearheaded by Ms Loo, the chips are made from the cassava root, and are marketed as a healthier alternative to regular potato chips because they contain up to 40 per cent less sodium and are free of gluten, trans-fats and cholesterol.

One reason for Tai Sun's continued success since the 1960s is that demand for snacks has increased over the years. As explained by director Sandy Lim - a second-generation family member - people have gotten busier over time and are now almost always on the move. Snacks are thus a convenient form of sustenance.

Another reason for the company's continued success is that the business is not particularly sensitive to changes in the general economic environment. This is because snacks are not big-ticket items. Instead, they are cheaper food items, and people tend not to think twice about buying them in both good times as well as bad.

In fact, demand for the company's products has even increased during difficult times, such as the Severe Acute Respiratory Syndrome (Sars) outbreak. Mdm Lim attributed this to the fact that many people chose to stay at home as far as possible, and hence bought more snacks during this period.

Challenges and strategies

As is the case with all businesses, the company does face challenges, and its management is aware of them.

Firstly, there is an increasing level of competition from imported brands. While there are only a few local producers, there is a far greater number of foreign producers who bring in a "sea of foreign products", says Ms Loo.

Secondly, the company has to cope with increasing costs. The relatively steady increase in commodity prices has made it more difficult to procure premium-quality nuts. The company does not believe in compromising on quality. Instead, it believes that when prices rise across the market, consumers will continue to buy its products because of its 46-year track record.

Aware of these challenges, and determined to not fall behind in the future, the leaders of Tai Sun conducted a consumer research exercise to find out what consumers felt about the brand and its products. There were three key findings of the exercise.

Firstly, consumers gave the company's products high scores for taste and enjoyment.

Secondly, brand awareness and trust was high among mature consumers.

Thirdly, and perhaps worryingly, young people were less aware of and less drawn to the brand.

As a result of these findings, the company chose to embark on a rebranding exercise. This was spearheaded by Ms Loo and resulted in an updated look for the brand, as well as the introduction of new products (such as the cassava chips) to meet evolving consumer tastes.

The company also engages in highly targeted marketing campaigns. These campaigns extend online where appropriate. For example, the company has sent food bloggers samples of its products to critique and blog about. It also organised a mini contest on Facebook as part of a product launch.

However, Ms Loo's view is that "social media works, but only as a short-term measure".

For this reason, the company places more emphasis on traditional marketing methods, and the preferred method is sampling. Specifically, this involves allowing consumers to try its products in the hope that they will choose to buy the product subsequently. So far, says Ms Loo, it is a method that has worked.

New brands

Going forward, the company plans to focus on developing its existing brands. In addition, it hopes to expand its product range and possibly introduce new brands as well. Its goal is to become a one-stop producer of all varieties of snack foods in about five years.

Regarding whether the next generation of the Lim family will take over the reins of the business, Mdm Lim says: "We see ourselves as stewards of the business. The second generation holds the baton for now. We need to run as fast and as far as we can, without dropping the baton - so that we can pass it on to the next generation for the next lap."