‘A world of bread delights’

Bread sales of Gardenia Bakeries Philippines continued to climb in 2005, rising by 25 percent despite a five percent decline in bread demand brought about by lower disposable income of consumers for certain food items.

The strong 25 growth rate enabled the company to breach the P1 billion sales with actual revenue hitting P1.2 billion–a phenomenal leap from the P100 million sales figure recorded in 1998.

Gardenia general manager Simplicio P. Umali attributed the strong sales performance to the shifting breakfast habit of Filipinos — from rice and viand to the more convenient meal of sandwich.

"Besides, we have come up with several variants of delectable and flavored loaves–not just the traditional white loaf–which made it even more convenient for our consumers who used to buy spreads, hams, jams and other fillings for their morning fare," Umali said.

Like every other commodity, Gardenia breads experienced a peak and lean cycle. Umali said "ours has a mild peak during the rainy season and Christmas when family members are at home and feel the need to keep on eating" and the "mild lean period is during summer when people eat less because of the heat."

Gardenia corners 40 percent of both branded (those sold in supermarkets) and unbranded (those sold in neighborhood bakeries) bread market in the country and 60 percent of the branded loaves category. And from all its products, 80 percent was accounted for by loaf breads and the rest from pan de sal, buns and snack cakes (a new product).

From just the supermarket outlets when it started, Gardenia now has 7,000 outlets and plans to increase this to 10,000 this year tapping village stores and sari sari stores. In addition, it has embarked on a territorial dealership program, launched late last year, where residents of a particular area can become the dealer for the area by delivering the loaves to smaller outlets there.

Through this dealership program, Gardenia hopes to penetrate every nook and cranny of Metro Manila and reduce the turnaround time of its fleet since the trucks will be delivering only to one site and the dealer delivers to the other smaller outlets within his jurisdiction, said Nestor E. Constancia, marketing and sales manager of Gardenia.

Constancia said Gardenia hopes to get initially 100 territorial dealers with each having an outlet base of 100 accredited cart dealers; must own a car or van to deliver to cart operators and has a safe space to store the bread. The initial investment is P150,000 and sales quota per area is P200,000 a month at least to achieve profit margins.

This was first offered to employees of Gardenia and some business partners, who are now able to earn on the side and help create more jobs in their respective areas. Now even professionals are applying for area dealerships to augment their incomes, Umali said.

A cart vendor can sell 50 loaves in three to four hours and earn a net of P250 a day, Umali said adding that some area dealers who have gone into cart vending were able to earn P300,000 to P400,000 a month. 

Gardenia has expanded its market reach reaching the northernmost cities of Luzon and north eastern provinces of Cagayan Valley, Nueva Vizcaya, Tuguegarao, Laoag, Ilocos Sur and Abra. In the Visayas, it sends trucks (via the RORO program) to Iloilo (where Gardenia now corners 20 percent of the market), Kalibo (including Boracay) and Roxas in Panay to Bacolod in Negros.

Umali said by 2007, Gardenia will open a manufacturing plant in Cebu to cater to the needs of that premier, highly urbanized province as well as Mindanao provinces.

But not only is Gardenia known for its quality bread, it has become one of the most preferred destination for school field trips with an average visitor of 2,000 to 2,500 a day from Monday to Friday (sometimes even reaching 4,000 on Thursday and Friday).

Through its outreach partner, Tulay sa Don Bosco–a haven for streetchildren– Gardenia sells factory-priced bread to schoolchildren, teachers and parents in such field trips at 15 percent discount. Tulay sa Don Bosco gets 10 percent of income from total sales for its wards.

Beginning late October, Gardenia came out with a Flavor of the Quarter bread–with Black Forest which it had to extend to February because of consumer clamor. Flavor for March to June is apple cinnamon. "Before we launch a new product, we subject several samples to taste tests in different localities with an average sample survey size of 100 people, who will tell us what flavors they liked best among those they tested," Constancia said.

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Gardenia Bakeries Phils.
LIIP, Mamplasan, Biñan, Laguna
Phone: (632)889-8890/ (6349) 5391136 to 40