Universal Robina Corp., the listed food business of the Gokongwei Group, said Monday it is focusing more on growing volume instead of increasing product prices to drive earnings this year, noting the impact of inflation on consumer preference and spending.
URC president and chief executive officer Irwin Lee told shareholders at their annual meeting that inflation has resulted in consumers buying more URC products priced lower than P10 such as snacks and instant coffee, although some premium brands are also seeing some growth.
“We are pivoting our agenda for 2024 onwards to drive more volume growth. In the last two years, the whole world has been driven by a lot of pricing, driven by commodity cost increases. That has translated to inflation and the impact on consumers,” Lee said.
“What we are trying to do is to make sure that we drive our own operating savings that we need to pass onto the consumers. That is the big push for 2024 and we’re hoping to see renewed volume growth so that reliance on pricing will be minimized,” he added.
Lee said, however, that stronger demand for lower-priced products doesn’t mean URC will ignore higher-priced brands. “We are continuing to drive our brands in higher price segments to prepare for the time that consumer confidence will be stronger,” he said.
Meantime, Lee said that URC is very pleased with the result of its acquisition two years ago of Munchy Food Industries Sdn. Bhd and its subsidiary Munchworld Marketing Sdn. Bhd. From CVC Capital Partners for MYR1.925 billion.
Lee said they have realized a lot of synergies between URC’s operations in Malaysia and Munchy’s, with gains from the Malaysian biscuit company also helping sales of URC products in Malaysia. He added that URC’s takeover of the distribution of Munchy’s products from third-party distributors has more than doubled sales, and whose operation is being expanded by URC in Southeast Asia.
