Fraser & Neave Holdings Bhd Annual Report 2020

1 INNOVATION 069 ANNUAL REPORT 2020 03 md&a RISKS • High investment costs in R&D and equipment with uncertain commercial returns. • Balancing between the risk of non-acceptance by consumers and the risk of being overtaken by competitors. • Replication and improvement by competitors riding on products, processes and packaging of innovator. OPPORTUNITIES • Innovative product that resonates with customers and consumers generates higher sales and profit. • Adoption of emerging and disruptive technologies increases competitive edge. • Improved cost and operational efficiency enhances economies of scale and environmental performance. OUR RESPONSE Product Innovation • Continuous products development to meet the changing needs and preferences of consumers and to deliver high-quality products, with the right nutritional values and taste. • Collaborate with research institutes to access cutting-edge research and scientific studies. • Offer innovative packaging formats to reduce environmental footprint, as well as appeal to consumers’ demand for convenience and flexibility without compromising product quality and integrity. Process Innovation • Investing in more advanced equipment and technology to expand innovation capability. • Adopt technical and scientific advances to capture value and efficiency from our supply chain. • Inculcate employee-driven innovation initiatives to enhance productivity, quality and cost savings. Refer to the ‘Sustainability Statement’ section on pages 133 to 139 in this AR, or read more in the F&NHB Sustainability Report 2020. WHY IT IS IMPORTANT TO US Innovation is critical to maintaining leadership and competitive advantage in a rapidly evolving market. We need to stay relevant to customers’ and consumers’ needs and demands that have evolved towards healthier lifestyles and convenience as well as growing concerns on social and environmental issues.