Building a regional brand
will notice that established brands dominate the shelves and smaller players come and go. The big brands you see on the shelf 10 years ago and now are the same.
“Your opponents are strong. So if you are going into the consumer market, you will need something to do well.
“One of our missions for Hexa is to be a world-class company. Whatever we do, we ask ourselves whether it is world-class standard or not. If it is not, we won’t do it,” he says.
So he spent some years strengthening its operations and building value in the Hexa brand.
When Gan was finally ready to look at the consumer market, he realised that getting a distributor was a lot tougher than it looked. It wasn’t just a matter of finding a distributor to help sell their products. It was about looking for a partner who could understand its challenges and be prepared to work with the company to ensure minimum correction steps taken for any problems that may arise in the consumer market.
“You need a good partner. Otherwise, you’ll be off the shelves very fast,” he says.
He knocked on every door for about two years before one finally opened to him in 2016.
The partnership has served him well. Not only has Hexa grown in the local market, it is also going places with its distributor. Hexa currently works with its distributor in the Malaysia, Brunei, Indonesia and Dubai markets.
And this is fuelling Gan’s ambitions to go regional.
“Over the next few years, we want to be a regional powerhouse. We want to do well in the market,” he says.
Gan emphasises that he is not merely exporting spices, which rely heavily on pricing. Rather, he is exporting brand, which commands better value.
Export currently makes up about 18%-20% of its sales. He is hoping to bring that up to 30% in three years’ time. And this, he says, also depends on a good partnership with its distributors.
“Export margins are not as high. You need super value-add. And our market positioning is above average so it is not so easy to sell. That is why we need good partners,” he adds.
However, Gan notes that different parts of the South-East Asian region have different taste profiles and getting the right product mix is important in capturing the market. For this, it continues to invest in research and development (R&D) works.
Apart from herbs and spices, Hexa also expanded into the seasonings segment, which Gan says will be the future growth driver for the business. Spices currently make up the bulk of its sales at 70% while seasonings take up the remaining 30%.
He believes its seasonings segment will continue to grow as more and more people look for simpler cooking solutions.
Over the years, Hexa has also looked into other aspects of its products to help the brand stand out in the marketplace including convenient and innovative packaging and adding fun elements into its product design.
With all these steps, Gan is confident that the company and its brand have grown stronger.
Hexa enjoys an average growth of about 20%. However, growth halved last year as the company took a step back to reexamine its operations to prepare it to go for the longer haul. He focused on hiring, training, marketing and getting their standard operating procedures (SOPs) on point.
Hexa turned in revenue of about RM12mil in 2017. Gan is targeting sales of RM14mil this year and RM16 mil for next year.
The company’s two production facilities, one in Shah Alam and its newer one in Klang, are still able to meet its growth needs. The two plants have a combined output of 170 tonnes a month.
If needed, its factory in Klang, which took up an investment of around RM4mil, can add on another production line to cater to increased demand.
Moving forward, the company is looking at brand sustainability by presenting its products as part of consumers’ cooking experiences.
“In the 1960s, people mainly cooked to eat. In the 1980s to 90s, people cooked for the taste. But now, we have a lot of options to eat out. So we mainly cook for the experience.
“So what we are trying to do over the next few years is to get the customers to see us as part of their cooking experience,” says Gan.
Gan hopes Hexa will be able to play a bridging role between recipes and the cooking process by being a solutions provider.
Last year, it opened a retail outlet in partnership with a restaurant to educate consumers on the use of its products and to enable them to experience its products in a physical setting.
Gan notes that its move to enhance cooking experiences is slightly different from the industry trend towards healthy and natural ingredients. He believes Hexa is moving in the right direction for its own growth.
Hexa has also been actively producing digital content to showcase the use of its products in recipes.
“Digital is really the way to go,” says Gan.
He adds that growth will also come from its e-commerce efforts. Gan notes that most of its competi- tors are still lacking in this area, which will give Hexa somewhat of a first mover advantage. “So far, we’ve only been doing a lot of development work. We have not been very focused on selling online yet. But we are looking more into this and I think it can boost sales quite substantially in the future,” he says. Contribution from the consumer segment make up half of Hexa’s sales at the moment. While its branding efforts will likely push sales from its consumer market, Gan says there is still room for growth in the B2B market, both locally and abroad. The challenge in growing, though, is to get everyone on his team on the same page. “Businesses go through different stages. First, it is to survive, then to stabilise. Once it is stable, you’ll need to look at product design, branding and then scaling, especially if you are going overseas.
“You need to use different strategies for the different stages of growth. And each stage requires a different mindset. So you need to switch your mindset and you need to get your team to also change their mindsets to thrive in each stage. So the challenge for most businesses, and for us, is how to get your team to change their mentality at each stage,” he says.
Hexa has about 75 people under its employment and Gan says the company will continue to focus on human resource policies, training, getting its SOPs right and digital marketing for future growth.
Whatever we do, we ask ourselves whether it is worldclass standard or not.
Garry Gan