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 Independent - Farming - - ANALYSIS -

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

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