Trading on heritage and innovation

Kerry Group has paved the way for Irish dairy companies looking to expand into the growing markets of Indonesia and Malaysia, writes

IRISH dairy companies with ambitions to expand in southeast Asia can take inspiration from the success story of Kerry Group in the region. Kerry Group became active in south-east Asia in 1998, employing 2,000 people, with 1,500 of those in five plants in Malaysia; over 200 people work at its emulsifier manufacturing plant in Sha Alam near Kuala Lumpur, where the products made include McDonald’s sauces, some Nestlé snacks and Pringles.

The company also has a meat centre of excellence in Bangkok, Thailand and development application centres in Vietnam, the Philippines and Indonesia.

Dudley Neary, head of the south-east Asian operation, said that the company’s growing success in the region is due to it having talented local people who can provide products that appeal to local tastes.

“We have people on the ground locally to look at local trends and make a product that resonates with customers,” he told companies taking part on the recent Department of Agricultureled trade mission to the region.

“Our dairy heritages leverages and underlines everything we do out here,” said Mr Neary.

Bord Bia’s recent Prioritisation of Markets study showed Malaysia and Indonesia as the top five markets for potential growth. The two countries have a combined, growing population of 650 million people and an increasing middle class.

Kerry Group’s southeast marketing manager Quzairy Ruhaimi pointed out that understanding the expanding population and providing products for the middle class are key to success in the diverse market.

“The behaviour of consumers in south-east Asia has changed tremendously over the last ten years; 90pc of them are likely to try new food,” he said.

“It’s all about modernisation and this is something the food industry cannot run away from. They also want a wellness type product without sacrificing the authenticity of taste. Taste is key and localisation is very important.

Changing landscape

“This rise in population has changed the landscape and changed the way consumers consume. The rise of the middle class was very important in this region. They are always on a quest to seek better solutions, better tastes and better products.

“They are also moving towards being more value cautious as opposed to ten or 20 years ago. It used to be cheaper the better when it came to products, but as income rises they are seeking better value and are willing to spend a little bit more for a better-quality product.”

However, while Ireland is keen to market its sustainability agenda, Mr Ruhaimi added that this concept has not entered the mind of consumers on a wide scale but that larger multi-national companies Kerry Group deals with are becoming more tuned in to the notion.

Thomas Darmawan of KADIN Indonesia chamber of commerce told the Irish delegates at a dairy seminar in Jakarta that the increase in the “consuming class in Indonesia by 2030 will lead to an increase in the consumption of animal-based products” which the country is not self-sufficient in.

Both Indonesia and