CHAPTER 2 Business Review

CHAPTER 2

BUSINESS REVIEW

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COMPANY HISTORY

Before tracing back the history of NutriAsia, let us first find out the history of

Ketchup.

HISTORYOF KETCHUP/CATSUP

Ketchup (also spelled catsup or catchup), also known as tomato ketchup, tomato

sauce, red sauce, Tommy sauce, Tommy K, or dead horse, is a condiment, usually

made from tomatoes. The ingredients in a typical modern ketchup are tomato

concentrate, spirit vinegar, corn syrup or other sugar, salt, spice and herb extracts

(including celery), spice and garlic powder. Allspice, cloves, cinnamon, onion, and other

vegetables may be included.

Ketchup started out as a general term for sauce, typically made of mushrooms or

fish brine with herbs and spices. Some popular early main ingredients included

blueberry, anchovy, oyster, lobster, walnut, kidney bean, cucumber, cranberry, lemon,

celery and grape. Mushroom ketchup is still available in some countries, such as the

UK, and banana ketchup is popular in the Philippines.

Ketchup is often used with chips (French fries), hamburgers, sandwiches and grilled or

fried meat. Ketchup is also used as a base for various sauces.

PICKLED FISH SPICES

In the 17th century, the Chinese mixed a concoction of pickled fish and spices

and called it (in the Amoy dialect) kôe-chiap or kê-chiap (鮭汁 , Mandarin Chinese guī

zhī, Cantonese gwai1 zap1) meaning the brine of pickled fish (鮭 , salmon; 汁 , juice) or

shellfish. By the early 18th century, the table sauce had made it to the Malay states

(present day Malaysia and Singapore), where it was discovered by English explorers.

The Indonesian-Malay word for the sauce was kecap (pronounced "kay-chap"). That

word evolved into the English word "ketchup". English settlers took ketchup with them

to the American colonies.

The term Ketchup was used in 1690 in the Dictionary of the Canting Crew which

was well acclaimed in North America.

MUSHROOM KETCHUP

In the United Kingdom, preparations of ketchup were historically and originally

prepared with mushroom as a primary ingredient, rather than tomato. Ketchup

recipes begin to appear in British and then American cookbooks in the 18th century. In

a 1742 London cookbook the fish sauce has already taken on a very British flavor, with

the addition of shallots and mushroom. The mushrooms soon became a main

ingredient, and from 1750 to 1850 the word ketchup began to mean any number of thin

dark sauces made of mushrooms or even walnuts. In the United States, mushroom

ketchup dates back to at least 1770, and was prepared by British colonists in "English

speaking colonies in North America. In contemporary times, mushroom ketchup is

available in the UK, although it is not a commonly used condiment.

TOMATO KETCHUP

Many variations of ketchup were created, but the tomato-based version did not

appear until about a century after other types. By 1801, a recipe for tomato ketchup was

created by Sandy Addison and was later printed in an American cookbook, the Sugar

House Book.

By the mid-1850s, the anchovies had been dropped. James Mease published

another recipe in 1812. In 1824, a ketchup recipe using tomatoes appeared in The

Virginia Housewife (an influential 19th-century cookbook written by Mary

Randolph, Thomas Jefferson's cousin). American cooks also began to sweeten ketchup

in the 19th century. As the century progressed, tomato ketchup began its ascent in

popularity in the United States. Ketchup was popular long before fresh tomatoes were.

Many Americans continued to question whether it was safe to eat raw tomatoes.

However, they were much less hesitant to eat tomatoes as part of a highly processed

product that had been cooked and infused with vinegar and spices.

Tomato ketchup was sold locally by farmers. Jonas Yerkes is credited as the first

American to sell tomato ketchup in a bottle. By 1837, he had produced and distributed

the condiment nationally. Shortly thereafter, other companies followed suit. F. & J.

Heinz launched their tomato ketchup in 1876. Heinz tomato ketchup was advertised:

"Blessed relief for Mother and the other women in the household!", a slogan which

alluded to the lengthy and onerous process required to produce tomato ketchup in the

home. With industrial ketchup production and a need for better preservation there was a

great increase of sugar in ketchup, leading to our modern sweet and sour formula.

Modern ketchup emerged in the early years of the 20th century, out of a debate

over the use of sodium benzoate as a preservative in condiments. Harvey W. Wiley, the

"father" of the Food and Drug Administration in the US, challenged the safety of

benzoate which was banned in the 1906 Pure Food and Drug Act. In response,

entrepreneurs including Henry J. Heinz, pursued an alternative recipe that eliminated

the need for that preservative.

Prior to Heinz (and his fellow innovators), commercial tomato ketchups of that

time were watery and thin, in part due to the use of unripe tomatoes, which were low

in pectin. They had less vinegar than modern ketchups; by pickling ripe tomatoes, the

need for benzoate was eliminated without spoilage or degradation in flavor. But the

changes driven by the desire to eliminate benzoate also produced changes that some

experts (such as Andrew F. Smith) believe were key to the establishment of tomato

ketchup as the dominant American condiment.

BANANA KETCHUP

The exact history is not known but it is a predominantly Filipino recipe. Filipino

food technologist Maria Y. Orosa is considered to have come up with the first version of

the recipe. According to another legend, World War II resulted in a severe shortage of

tomatoes. At the same time, there was a surplus production of bananas. Due to the

shortage of tomatoes, there was a concomitant reduction in the amount of tomato sauce

that was being produced. Bananas were cooked with the same ingredients to make the

sauce. Originally, the color of the dish is dark brown, but red coloring was added to

mimic the look and taste of tomato sauce. The company Baron Foods Limited makes a

simpler version that is colored yellow to mimic the appearance of bananas.

Banana ketchup is prepared by using ripe bananas that are cooked with sugar,

vinegar, and spices. The exact recipe will vary as the sauce is prepared according to

individual requirements. The sauce is also prepared at home but there are many

commercial variations in the market that are exported all over the world. The general

color of the sauce is dark brown but adding red color to the dish makes it appear like

tomato sauce. The sauce is similar in taste to Indonesian Kecap manis and the Thai

sweet chili sauce. Other ingredients may be added to the sauce while cooking like

allspice, cloves, nutmeg, tomato paste, pepper, and even dark rum.

HISTORY OF NUTRIASIA

NutriAsia traces its beginnings to Enriton Natural Foods, the brainchild of Filipino

entrepreneurs Joselito Campos Jr., Ang Tin Yu and Kedin Go.

The business thrived on one regional brand - Nelicom and one factory, producing

banana ketchup, hot sauce and fish sauce.

It was a modest business that had limited presence in North Luzon, though it

quickly acquired the rights to three popular brands of catsup and lechon sauce—Jufran,

Mafran and Andok’s.

The first major milestone happened in 1991, with the forging of an accord

between Enriton and Acres & Acres. With the addition of seven more factories and three

well-known brands (Datu Puti vinegar, Papa banana catsup, and Mang Tomas lechon

sauce), the new-born company was truly a national business, and was named

Southeast Asia Food, or SAFI, as we know it today.

In 1994, sales growth began accelerating with the birth of First Sheridan – a

distribution affiliate of SAFI. SAFI also acquired Amihan, another regional brand known

for vinegar and other sauces.

Enter 1996, a big milestone year. SAFI acquired the mega brand, UFC - an icon

among banana catsup lovers. This milestone was accompanied by the founding of

NutriAsia Incorporated, the holding company which acquired the UFC brand. Together

with SAFI, NutriAsia would soon become a major player in the local food market.

At the turn of the millennium, SAFI entered into a joint venture with its first foreign

partner, HJ Heinz of the US. The new company, called Heinz-UFC, carried catsups and

chili sauces while the remaining portfolio of products was handled by SAFI.

Though this joint venture was ultimately short-lived, it was significant because it

allowed SAFI to acquire new technologies and business processes from their foreign

partners, factors that would drive dramatic and consistent growth up until today, and

was a key component in our company’s greatest coup to date.

Looking back, NutriAsia evolved through a series of brand acquisitions. The

acquired brands were nurtured with innovation and brand building investments. And all

these paid off with market leadership.

NutriAsia is now in the big league of Philippine companies, ranked among the top

food companies. And yet our company continues to strive for ever greater heights. Our

long-term vision is to be a world class branded food and beverage company serving

global markets.

AWARDS AND CITATIONS RECEIVED

NutriAsia’s commitment to product quality and safety has brought them recognition

from various certifying bodies on food safety and quality. These are:

GMP, or Current Good Manufacturing practices, which are regulations that

describe the methods, equipment, facilities and controls required for producing

processed food. This certification gives consumers the assurance of clean, safe

and high quality working environment in all of its processing plants at all times.

NutriAsia also received the Food Safety System Certification 22000 in 2011

making the Campos company the first and the only liquid condiments

manufacturing facility in the country today that received this certification. FSSC is

the world’s leading, independently managed, non-profit food certification scheme

for ISSO 2200-based certification of food safety management systems. FSSC

22000 is the latest and the most stringent food certification scheme to date. This

stamp of safety and efficiency is important in light of the proliferation of cheaper

but sub-standard condiments and sauces in the market which could be unsafe for

consumers.

Its factories in Marilao, Bulacan and Cabuyao, Laguna have both received the

Food Safety System Certification (FSSC) from SGS Philippines, part of the

world’s largest independent certification company. In the Philippines, Nutri-Asia is

the first and only branded condiments company that is FSSC-certified, signifying

its compliance with systems that are legal, safe and efficient.

Nutri-Asia also has factories in Cebu and Davao, which, like its plants in Luzon,

are Certified by the Food and Drug Administration.

They also have HALAL Certifications.

The following are the awards, certificate and recognitions received by NutriAsia in

doing corporate social responsibility and environmental care:

Nutri-Asia Inc. has joined the ranks of eco-friendly companies in the country with

its adoption of energy efficient policies in its operations, foremost of which is the

‘green’ design and architecture of its office building.  The food company’s office

building at JY Campos Center at the Bonifacio Global City in Taguig, which it

shares with sister company, Del Monte Pacific Ltd, is currently undergoing

Leadership in Energy and Environmental Design (LEED) Certification by the

US Green Building Certification Institute for sustainable building practices. LEED

certification is an official recognition that a project’s design, construction and

building practices are energy efficient and eco-friendly. This means the building

incorporates efficient waste management, water conservation, energy efficiency,

and environment-friendly features and takes into consideration the health and

wellness of its occupants in its design.  Among the green features of the building

are its sensors for lights which automatically switch off when no people are

detected.  Under the LEED program, employees also become part of the green

process and they are among its beneficiaries. Employees working in better

quality indoor environment are known to be more positive and productive. 

‘Going green’ will not only result in reduced operating costs, through decreased

use of water, energy and other resources.  It is also consistent with the

company’s mission of “giving back to the environment”, says Nutri-Asia, the first

and only branded local condiments company certified by global institutions for its

compliance with efficient systems and best practices.

In celebration of its 40th year of providing Filipinos with the best-tasting and

highest quality condiments that aid and enhance Filipino household’s everyday

dishes, Datu Puti treated the community and mother earth with its biggest activity

last 2014. Datu Puti Jumbohalang Tambalan is a one-of-a-kind event where

Datu Puti gave FREE one liter each of Datu Puti vinegar and Datu Puti soy sauce

to the public on April 27 at the Quezon City Memorial Circle. In partnership with

Earth Day Network, Datu Puti celebrated Earth Month on April by promoting

environment-consciousness with the reusing of clean containers for vinegar and

soy sauce.The event was awarded and certified by Earth Day Network

Philippine’s Country Coordinator Roberto Guevara in recognition of its efforts

to help the environment and Earth Day 2014.

Businesses in Marilao, Bulacan were given recognition for helping shore up the

local government’s operations through their taxes during the recent taxpayer’s

recognition night held at the new municipal hall of Marilao. Dubbed as the “Gabi

ng pasasalamat sa mga taxpayer”, a total of 25 awards of appreciation were

given by Marilao Mayor Epifanio V. Guillermo. Companies and establishments

that received awards as top business taxpayers were Nutri-Asia, Zesto

Corporation, Moldex Products and Jollibee SM.

BOARD OF DIRECTORS

COMPANY PRODUCTS OFFERED

Joselito Campos Jr.

Chairman and Chief Executive Officer

Rolando C. Gapud

Director and Adviser

Edgardo M. Cruz

Director and Corporate Secretary

Tin Yu Ang

Director

Genaro “Gerry” Reyes

Director

Datu Puti White and Cane Vinegar

Datu PutiSoy Sauce

Datu PutiPatis

Datu PutiPinoy Kurat

Datu PutiPremium

UFCBanana Catsup

UFCTomato Sauce

Guisado

UFCTomato Sauce

Filipino

UFCSpaghetti Sauce

UFCHot Sauce

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MICHEAL PORTER’S FIVE FORCES MODEL

THREAT OF NEW ENTRANT:

To market and distribute produce requires adherence to food and safety regulations, which are becoming increasingly stringent.

The cost of getting the appropriate labels, certifications, and approval was extremely high.

Large capital costs are required for branding, advertising and creating product demand, and hence this limits the entry of newer players in the food processing industry.

UFC is seen not only as a sauce but also as a brand. It has held a very significant market share for a long time and loyal customers are not very likely to try a new brand.

SUPPLIER POWER:

Suppliers are concentrated compared to buyers – if there are few suppliers and many buyers – supplier bargaining power is high. 

THREAT OF SUBSTITUTES:

UFC banana ketchup was a lower priced product compared to the premium US brand Del Monte and Heinz tomato ketchup.

There are only few brands of Ketchup available in the market like: Del Monte, Heinz, Mafran and Mother’s Best.

COMPETITIVE RIVALRY:

Currently, the main competitors are Del Monte and Heinz which also offer different sauces and condiments.

BUYER POWER:

Large retailers, like supermarkets, have bargaining power because of the large order quantity, but the bargaining power is lessened because of the end consumer brand loyalty. Actually 78 percent of the country’s ketchup sales are NutriAsia brands.

COMPETITIVERIVALRY

SWOT ANALYSIS

Strengths Weaknesses

Good Advertising . Unlike other ketchups, UFC Color Crazee is

uniquely colored in four (4) variants: Goofy Green, Bubbly Blue, Yummy Yellow, & Radiant Red .

UFC is already well known in the food industry and currently has no negative brand image.

First in the Philippines to deliver such variants of ketchup.

It has a very affordable price/ cheaper than most other companies.

They are committed to working closely with food service operators, such as restaurants, hotels, and other food establishments in making something taste truly memorable.

Reunite in Big companies like Del Monte Pacific.

Target markets/ audiences Contains many artificial

colors & flavors. Low R&D

Opportunities

Threats

Increasing trend of food in wacky colors.

Market image of UFC directly to kids create brand loyalty from young age audience.

Expiry of long-term supply contracts and toll packing (PET bottling) contracts should lift margins from 201.

Product and services expansion. Acquisition Export

Low chance of repeat purchase of novelty ketchup.

Threat from existing brands & local competitors.

Maturing categories, products, or service.

Price wars Competitions