How the makers of Century Tuna stay afloat amid changing tastes
MANILA, Philippines – Consumer tastes are branching out and so is the Philippines' largest canned food company, Century Pacific Food Incorporated.
Business intelligence firm Euromonitor said canned or preserved food packaging volume sales in the Philippines are expected to "slow slightly" due to increasing health consciousness of consumers.
"Rising health consciousness will result in consumers cutting back on canned/preserved food, which is deemed to be unhealthy given the high content of preservatives and salt," Euromonitor said in its industry report. (READ: What are the top 20 food products consumed by Filipinos?)
To keep its earnings growth stable and take advantage of heightened demand for quick meal solutions, Century Pacific took steps to broaden its market like the acquisition of Century Pacific Agricultural Ventures Incorporated (CPAVI). This provides the company additional income through higher-value products like coconut water and virgin coconut oil.
This adds to its portfolio of well-known brands like Century Tuna, 555, Blue Bay, Fresca, Argentina, Swift, Wow, Lucky 7, Angel, Birch Tree, Kaffe de Oro, and Home Pride.
Century Pacific is also the Philippines' largest exporter of private label original equipment manufacturer (OEM) tuna products.
In 2015, its private label tuna segment export took the place of canned and processed meat segment as the second main driver for the company's revenue.
"We continue to benefit from consumers' increasing demand for affordable, convenient and healthy products," Century Pacific Chief Finance Officer Oscar Pobre said in a statement last week.
Amid rising commodity prices and changing taste, Century Pacific was able to grow its bottom line by more than a third to P2.66 billion in 2016.
"Improved employment in the Philippines, alongside the positive economic climate, saw consumers juggling a hectic lifestyle and increasingly demanding convenient and quick meal solutions. This in turn boosted the performance of canned or preserved food and packaging, given the fact such products are easy and fast to prepare," Euromonitor's industry report read.
Century Pacific said its total revenues grew by 21% to P28.29 billion in 2016, supported by a double-digit increase in the company's branded sales and robust top line from its growing coconut exports business.
"The growing global demand for products with positive health benefits and the premiumization of these products are big potential for the company," Oxford Business Group said about Century Pacific.
Century Pacific's Pobre said that while the 4th quarter of 2016 was "slower than previous periods due to an election bump," the company's branded businesses have maintained market leadership in core segments and have likewise gained traction in emerging product categories.
The canned food company has moved quickly to address changing trend through the use of social media to have a conversation with consumers on how it produced its products.
"2017 will be a more challenging year for us as we face rising commodity prices. However, through brand and pricing management, efficiency gains, and cost reduction initiatives, we should be able to strike a balance between growing demand and improving profitability," said Pobre
For the Oxford Business Group, Century Pacific has market leadership in the canned food business, having the advantage of size and scale compared to its competitors.
"Its extensive marketing, research and development, and distribution network puts it ahead of its competition. [Century Pacific's] multiple brands and products cater to a wide range of consumers," the London-based business development service firm said.
In 2016, Century Pacific acquired the license to the Kamayan shrimp paste trademark for North America. The brand is one of the top names in the US market for shrimp paste – a popular condiment in Philippine cuisine, locally known as bagoong.
Century Pacific also acquired distribution companies in China, which sell Century Tuna, currently the leading canned tuna brand in China.
These acquisitions are expected to support the growth of Century Tuna's international branded business, as well as expand its presence into adjacent shelf-stable categories. – Rappler.com