Gardenia offers wider snack options

Gardenia Philippines, which dominates the white bread market with 40 percent of volume sales, has ventured into the snack market by launching its wide selection of fun buns, twiggies and muffins, all at very affordable prices and geared toward a broad market spectrum.

As of December 2006, Gardenia’s bread sales in supermarkets and convenience stores amounted to P440 million.

"We are here to redefine snacks as not just the junk food that consists of chips, candies, flakes and biscuits but breads that are more delectable and with more nutritional values to offer," said Simplicio Umali, general manager of Gardenia Philippines which state-of-the-art plants are located in Sta. Rosa, Laguna.

Umali told The STAR he has already informed the head office (QAF Limited of Singapore ) of the need to invest in a new snack plant inside the Gardenia complex at the Laguna International Industrial Park (LIIP) by end of this year or early next year to help the company supply a growing demand for fresher snack items in the local market.

He said the new snack plant is estimated to cost P300 million which he hopes to be funded internally or with the help of the head office so that all the twiggies, fun buns and muffins and pan de sal will operate independently from the loaf or white bread lines. This snack plant is expected to operate by late 2008 or early 2009.

Another plant that will produce solely the toasts, another fast growth market, will cost P200 million which is expected to be operational by end of 2007 so that one of the current loaf plants in operation will be shipped to Cebu to address the bread requirements in the Visayas and Mindanao markets.

"Presently we are squeezing the production of these snack lines, pan de sal and toasts in the existing loaf plants but we can not continue supplying the growing local market using this scheduled operation," Umali said.

While most of Gardenia’s competitors had flat growths in 2006, the bread company grew by nine to 10 percent largely because of the robust demand for pan de sal, its wide variety of loaves, toasts and its entry into the snack market initially with twiggies. But with its successful entry into the snack market this year, Umali expects Gardenia to grow by 28 percent.

The loaf bread market last year grew by two percentage points, or from 60 to 62 but demand for Gardenia’s loaf bread grew by 70 to 72 percent while its pan de sal by 35 to 44 percent, Umali said.

Gardenia’s pan de sal sales are expected to grow this year by 30 percent while the snack line is seen to expand by 143 percent with the muffins leading the pack.

The muffins come in three flavors: blueberry (with the fruit coming all from the Mountain Province ); choco (through a tie-up with Hershey) and corn. The twiggies snack cakes come in chocolate and chocolate-vanilla and the fun buns are flavored with chocolate, strawberry, ube.

Umali said there is still enough room to grow in the snack line and bun lines locally. "We have barely scratched the surface," he said.

Aside from the snack line, another Gardenia product that sells briskly is the toast.

"Now one or two runs of our loaves plant is dedicated to producing the toasts, whose demand grew by leaps and bounds even in markets like Bacolod and Iloilo—both known for native sweetened breads and delicacies," Umali said.

"We really must have a separate plant for the toasts since local demand has grown unexpectedly," he added.