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 051 PURPOSEFUL ENGAGEMENT WITH CONSUMERS AND CUSTOMERS In all markets, we worked closely with our distributors to reach out to our increasing customer base more strategically. The fact remains that excellence in execution is not only about driving more sales but also strengthening the connection with our consumers and customers. In selective markets, our sales teams now serve our larger retail customers directly, while our distributors focus on smaller outlets and those in more remote locations. Rather than partake in value destruction price war, we focus our advertising and promotions budget on building brand loyalty with customers and consumers. As an illustration, the sales team in Thailand has established very strong ties with over 40,000 hawkers as a result of value-added support including the provision of carefully developed new recipes or product applications, in addition to dressing up the hawker stalls. This year, a Line app was launched to engage hawkers by sharing news updates and campaigns. Continued success in marketing and branding initiatives in Thailand and Indochina contributed significantly to the Group’s revenue and profit growth. Through impactful activations and collaborations, we achieved record high sales during the festive seasons in Malaysia. Shipments during Chinese New Year and Hari Raya were the highest in three years in Peninsular Malaysia. In East Malaysia, sales during Gawai (the harvest festival) made up a third of total East Malaysia sales for the year. Differentiated product packaging further boosted sales by catering to customers’ and consumers’ new needs. For example, F&N sweetened condensed milk now comes in sizes from single serve ‘Stix’ pack, convenient squeeze tubes for better flexibility in portion control, to 20kg flexible pouches for bulk industrial usage. We also drove product applications according to different export market needs, with particularly encouraging results in the Philippines and Africa. The halal market overall performed well, contributing to 26 per cent of our Exports revenue from Malaysia this year. Besides brand building and route-to-market initiatives, we continue to strengthen our competitive edge through greater focus on operational excellence and developing the right talents, supported by the right tools and skillsets to execute the strategies. Excellence in execution helped us maintain our leadership in our core categories. In Malaysia, we are No.1 in the carbonated soft drink, tea and canned milk segments. In Thailand, we have retained our leadership in the evaporated milk and total sweetened beverage creamer (SBC) markets with Carnation leading in the Superior segment and TEAPOT maintaining its strong position in the mainstream segment. *** Continued success in marketing and branding initiatives in Thailand and Indochina contributed significantly to the Group’s revenue and profit growth. ***