Red Dragon Farms wants bigger bite of deli meats market
RED DRAGON Farms Feed, Livestock & Foods, Inc. (RDFFLFI), the company behind Fresh Options Meatshop, is looking to expand its offerings beyond fresh meat products and expand more into processed meats such as sausages and hotdogs, as well as “heat-and-serve” food products.
In an interview with BusinessWorld, RDFFLFI President and Chief Executive Officer Robert H. Lo said he hopes the company will see value- added products outpace fresh meat sales in the next few years.
To maximize the use of each carcass slaughtered, meat industries rely on deriving extra value from lower-value meat cuts and from the non-meat parts of the animal, such as skins, offal and blood products that make up the bulk of the total carcass.
“We’re starting to do more value-added products. Hopefully, in the next two years, we have more than just plain meats,” Mr. Lo said in a Dec. 9 interview in Quezon City.
At present, RDFFLFI’s sales of fresh meat account for around 85% of the total, while valueadded meat products account for around 15%.
The company aims to increase the share of value- added meat products in the total revenue mix to 30%, with the acquisition of new machines to support the production of more deli products such as sausages, hotdogs, among others.
This includes battering, breading, and frying equipment for RDFFLFI’s chicken nuggets, breaded patties, and breaded chicken products. The machines also help deliver consistent quality items at low cost.
RDFFLFI acquired in the third quarter of 2016 a mechanically deboned meat grinder for soft bone parts for around P5-P6 million from a Dutch company.
“Basically our strategy is to go places with less players for valueadded products… In the ‘ heat and serve’ category, there are not many players… And we can also maximize the whole carcass. We’re excited with the low-cost machines,” Mr. Lo said.
At present, the bulk of sales from the company’s value-added products are from its heat-andserve Ulam Mismo brand which serves some of the Filipinos’ favorite dishes.
Ulam Mismo’s Pork Sisig generates the biggest annual sales among the brand’s 17 other variants which include Bopis, Beef Caldereta, Bicol Express, Binagoongan, Beef Kare- Kare, Chicken Hamonado, and Bistek Tagalog, among others.
These products are sold in all Fresh Meat Options retail stores — around 80 full stores and 70 to 80 express stores — and in 10 Puregold lifestyle stores.
The firm’s line of products targets middle-income earners and above.
For 2017, Mr. Lo said the company intends to open 13 more full stores and 10 more express stores with focus on southern Metro Manila, which currently has only two Fresh Meat Options stores in the area — one in Makati City and another in Las Piñas City.
RDFFLFI is set to open this year its new slaughterhouse worth around P200 million. The facility, located within its farm in San Fernando, Pampanga, is expected to help cut logistics costs as the closest slaughterhouse facility was located 15 kilometers away.
Mr. Lo mentioned that they have invited a few companies, which he declined to identify, to also utilize and share cost in the operations of their new facility.
The new slaughterhouse is also seen to boost the company’s capacity to slaughter 200 pig heads per day from the current 150 to 180 per day.
With all these developments, Mr. Lo is projecting a 10% to 15% increase in revenue in 2017 from last year’s performance, driven by the introduction of more valueadded products.
RDFFLFI describes itself as a medium-scale agri-food system enterprise, with an integrated food supply chain that includes livestock breeding, feed manufacturing, meat processing, and distribution to food service delivery.