Fraser & Neave Holdings Bhd Annual Report 2019

A N N U A L R E P O R T 2 0 1 9 03 Management Discussion & Analysis 049 T he beverages industry in Malaysia went through a significant change in the financial year ended 30 September 2019 (FY2019) with the implementation of an excise tax on sugar sweetened beverages. At the same time, a confluence of geo-political events together with intensifying competition combined to create a challenging macro environment. Yet, F&NHB concluded the year with positive top and bottom line results. All these are made possible through our successful push for greater sales contribution from outside Malaysia. We further sharpened our competitive edge through better products, greater efficiencies and strengthened relationships with key stakeholders in all our markets. Our achievements were underlined by three strategic priorities: Innovation, Cost Competitiveness and Excellence in Execution (or I.C.E.). From sourcing raw materials to product formulation/reformulation, production, packaging, distribution and, finally, sales and marketing – we are creating synergies, eliminating waste and enhancing our outcomes. SHARPENING OUR COMPETITIVE EDGE WITH I.C.E. HEALTHIER & BETTER PRODUCTS Probably the most significant achievement in Malaysia during the year was the successful application of various innovations and technologies to reformulate more than half of our ready-to-drink (RTD) beverages without compromising on taste . It has been our mission to lower our overall sugar index and offer at least one healthier option in every category we are in, as part of our commitment towards improving the health and well-being of our consumers. Thanks to the sweetened beverages excise duty in Malaysia, which was implemented from 1 July 2019, we undertook probably the biggest product innovation exercise in our history and fast-tracked the introductions of the lower sugar products. As at the end of the financial year, 90 per cent of our RTD products sold in Malaysia are healthier options and below 5g sugar per 100ml. We now have healthier choices in 10 out of 12 of our RTD product categories; and our overall sugar index for 2019 stands at 5.2g per 100ml, 41 per cent lower than when we first started measuring it in 2004. More importantly, all our healthier choice products have been well received, as we are driven by the mantra: “If we don’t love it, we won’t launch it”. *** As at the end of the financial year, 90 per cent of our ready-to-drink products sold in Malaysia are healthier options and below 5g sugar per 100ml. ***