URC’s Great Taste brand dislodged from top spot

MANILA, Philippines — Universal Robina Corp.’s new chief executive officer is aiming to regain the Gokongwei-owned food and beverage giant’s top spot in the cutthroat instant coffee business in the country.

“The challenge is in the coffee wars. It’s not just Coke versus Pepsi or in laundry or in shampoo wars, there’s also coffee wars so that is where we’re focusing our efforts. We are working quite fast to stabilize that,” said Irwin Lee, the company’s newly appointed president and chief executive officer.

Lee took over the position last May 14 from Lance Gokongwei, who is now chairman of URC. Lee’s appointment is part of several major changes in Gokongwei-owned companies such as JG Summit Holdings Corp. where Gokongwei is now president and chief executive officer from president and chief operating officer previously.

URC’s flagship brand Great Taste Coffee was previously the top brand in the country, but intense competition from Indonesian brand Kopiko and Nestle’s Nescafe has challenged its position as market leader.

“It is a three way game – among Kopiko, Nescafe, and Great Taste. Sometimes one is up, the other is down, but Great Taste is a good brand, so I guess it’s a little bit of our success that others are following,” Lee said.

Kopiko is gaining market share, he said, and this has put pressure on Nescafe and Great Taste.

At present, URC’s Great Taste is in the third spot, declining to 26 percent in 2017 from 30 percent in 2016.

“It’s declining, but we’re still quite strong 30 percent to 26 percent. That is what we’re trying to gain back,” Lee said.

“We’ll see where we can drive some change in the game moving forward…There is a packaging evolution from single packs to twin packs,” he said.

URC continues to hold the top spot in snacks, candies, tea, and cup noodles.

 Moving forward, the listed food and drinks conglomerate is pouring in P8 billion in capital expenditures this year as it seeks to bring the business back on track after a challenging tide the past two years. 

The bulk of the P8 billion will go to commodities and agro-industrial, while the rest would go to support business overseas.

“We plan to bring the business back on track,” chairman Lance Gokongwei said during the company’s annual stockholders meeting last week. 

In the first quarter, URC reported a net income of P3 billion, down 12 percent. In terms of sales, URC posted P31.2 billion sales in the first quarter, up two percent in the same period last year.

But the continuous recovery of the business in Vietnam and growth coming from its agro-industrial group are helping the company recover.

The company said its Vitasoy business is likewise doing well, with a 15 percent in volume and 13 percent in value market share. The company will eventually build a P1 billion Vitasoy factory to meet growing demand.