IN LUZON: Virginia Foods eyes expansion prospects

Cebu-based food manufacturer Virginia Foods, Incorporated is now looking at better prospects in penetrating the bigger playing field in Luzon areas.

Virginia Foods Inc. vice president for sales and marketing Stanley Go said that since early October this year, they have already started piping in Virginia products in shelves of Puregold supermarkets in Manila.

Go said that Luzon is a huge potential area for growth because it composes 72 percent of the country’s total canned market whereas Visayas and Mindanao contributes only around 38 percent.

“Our distribution in the past has mainly been focused in Visayas and Mindanao but now we are determined to bring Cebu products to Manila,” he said.

Go said competition in Manila is not as stiff as in the Visayas, particularly Cebu.

To kick off their expansion target, Virginia sets off an intensive marketing campaign and promotions such as product samplings in various areas in Manila.

Go said Virginia actually tried penetrating the Luzon market back in 2002 but eventually retired their efforts because of failed systems so now they are employing a simple strategy that will not be a “one time big time” scheme that has huge risks of flopping.

He said that their expansion will be done slowly and steadily but they do not wish to flood the market just yet.

Go said that their re-entry to the Luzon market will be started by displaying their products in Puregold chains which currently ranks second in Manila supermarkets.

He said that their expansion campaign will be full blown this yearend and once they successfully level the playing field, it will mean that they will eventually increase their production volume to sustain the markets that they will be serving.

Go said that after increasing their prices for their frozen and canned goods in the early part of this year, they have not done incremental price adjustments so far and their prices will certainly be stable until year end.

He said that despite the current global crises, they still project positive sales because food is considered as consumers’ basic necessity so they do not see a decline in food consumption.

This holiday season, Go projected their sales to increase by 50 percent especially that more consumers will be patronizing their products in time for the Noche Buena.

He said that this positive trend has been observed since October and usually their sale for October to December matches their sales for the entire months of January to September.

Although Go noted that in the height of the crisis, manufacturers in their sector are faced with the challenge to produce more innovative products that will be affordable but still maintain the same level of quality.

And in this feat, Virginia is currently laying out its plan to introduce a new product line that will be separate from their canned and frozen segment.

He said that they will soon introduce a new packaging medium for their products that will not use tin cans, which composes 20 percent to 30 percent of their expenditure.

“The food industry will not be affected by the crises because it’s a basic necessity. The trend right now is for manufacturers to be creative in coming up with innovative products but still deliver value for money to consumers,” he said.