Strategy Updates
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I. People & Planet
Friendly Culture
URC has a strong foundation of positive people culture. And we aim to enhance this with investments in talent development, digitalization, and simplification initiatives to empower our people further, expand collaboration, and build next-generation leadership. This people development pillar, together with natural resources management and product portfolio improvement, comprises the five materiality focus areas in our sustainability program.
In 2018 we embedded sustainability in URC’s corporate strategic thrust. This is a reminder to our employees and shareholders that sustainability is a significant component of our corporate strategy, tightly woven into our culture and the way we operate. We strengthened our governance model to make our execution and decision making more agile. We redesigned the steering committee responsible for the development & delivery of URC’s Sustainability Commitments. Senior leaders with regional roles were appointed to integrate and execute sustainability initiatives as One URC. Country heads and division heads were also aligned to support delivering on our commitments.
In 2019, we supplemented our Phase 1 materiality areas with long term commitments aligned to the United Nations Sustainable Development Goals. From our baselining exercise in 2018, we were able to develop our long-term commitments and KPIs, which were cascaded from the corporate level to the plant level across our business operations.
We also started our LIVE SUSTAINABILITY. LIVE URC campaign to cascade our sustainability strategy across our operations in that eventually led to organic execution across our businesses. This led to the following progress in Natural Resources, People, and Products materiality areas, along with its impact towards the United Nations Sustainable Development Goals.
Natural Resources
Our Commitment
Our 2019 Progress
Energy
We will optimize Energy Use Ratio by 30 % by 2030 along with its impact on Carbon Footprint.
-6%
We have reduced our energy use ratio(EUR) along with its effects to GHG by -6% or equal to 3.65 GJ/metric tons versus our 2018 baseline driven by the improvements from our businesses in the Philippines. We are on track in achieving our 2030 commitments as we further scale our initiatives that drive more efficient use of energy in our value creation while we grow the business.
Water
Substantially improve water use in our facilities by improving our Water Use Ratio by 30%, by 2030.
-11%
We are pleased that for CY2019, we improved our water use efficiency by reducing our water use ratio (WUR) by -11% or equal to 5.7 m3/metric ton versus our 2018 baseline at 6.4 m3/metric ton. Our performance was driven by improvements across business divisions as a result of our initiatives in driving recycling of wastewater effluents.
Note: Data covers manufacturing facility of BCF-PH, BCF-INT and Flour only
Natural Resources
Our Commitment
Energy
We will optimize Energy Use Ratio by 30 % by 2030 along with its impact on Carbon Footprint.
Water
Substantially improve water use in our facilities by improving our Water Use Ratio by 30%, by 2030.
Our 2019 Progress
-6%
We have reduced our energy use ratio (EUR) along with its effects to GHG by -6% or equal to 3.65 GJ/metric ton versus our 2018 baseline driven by the improvements from our businesses in the Philippines. We are on track in achieving our 2030 commitments as we further scale our initiatives that drives more efficient use of energy in our value creation while we grow the business.
-11%
We are pleased that for CY2019, we improved our water use efficiency by reducing our water use ratio (WUR) by -11% or equal to 5.7 m3/metric ton versus our 2018 baseline at 6.4 m3/metric ton. Our performance was driven by improvements across business divisions as a result of our initiatives in driving recycling of wastewater effluents.
Note: Data covers manufacturing facility of BCF-PH, BCF-INT and Flour only
People
Our Commitment
Our 2019 Progress
Growth
In Talent
We empower the organization through our People & Planet Friendly Culture initiatives, ensuring holistic growth of our employees at all levels.
35
hours
per
employee¹
We’ve conducted an average 35 training hours per employee in 2019. We are on track with our 2030 commitments as we establish a ONE URC Learning program that will strengthen the competencies of our hours per employees specific to the required needs of the business.
Safety
We promote a safe working environment towards zero lost time injuries in the workplace.
-9%
LTIFR²
-26%
AIFR²
We have reduced our Lost Time Injury Frequency Rate (LTIFR) by -9% or equal to 1.22 and All Injury Frequency Rate (AIFR) by -26% or equal to 7.56 versus our 2018 baseline driven by the improvements on our international operations. We are on track in achieving our 2030 commitments as we increase the safety implementation programs across the operation.
Our Communities
We commit to improve people’s capabilities leading to better livelihood through education, improved nutritional level, and environmental stewardship in communities where we live and
operate.
Education:
Live UP
Flourish Pilipinas Kabalikat Program
We have increased the total number of beneficiaries by 35% or equal to 2,522 individuals versus our 2018 baseline as we develop programs specific to Education and Nutrition. We were able to support teachers and students through Flourish Pilipinas, kabalikat partners through Kabalikat Program, farmers through the Sustainable Potato Program and elementary students through the SAGANA Sustansya Program.
Nutrition:
Live Right
Sustainable Potato Program
SAGANA Sustansya
Among the 163 undernourished children who participated in the SAGANA Sustansya program in 2019, 155 have improved their nutritional status which led to a 95% overall improvement rate.
We have increased the total number of our volunteers by 157% or equal to 663 employees versus our 2018 baseline as we further promote our coastal cleanup and tree planting initiatives.
Environment:
Live Clean
Coastal Cleanup Tree Planting
We are on track in achieving our 2030 commitments as we strengthen our communication through better reporting. In 2019, we conducted a roadshow on Live Sustainability, Live URC Framework to help increase the awareness of employees on our CSR metrics.
1 Data covers the total number of URC regular employees excluding BOPP, UFLEX and AU only
2 Data covers manufacturing facility of Total URC
2 Data covers manufacturing facility of Total URC
People
Our Commitment
Growth
In Talent
We empower the organization through our People & Planet Friendly Culture initiatives, ensuring holistic growth of our employees at all levels.
Safety
We promote a safe working environment towards zero lost time injuries in the workplace.
Our Communities
We commit to improve people’s capabilities leading to better livelihood through education, improved nutritional level, and environmental stewardship in communities where we live and
operate.
Our 2019 Progress
35
hours
per
employee¹
We’ve conducted an average 35 training hours per employee in 2019. We are on track with our 2030 commitments as we establish a ONE URC Learning program that will strengthen the competencies of our hours per employees specific to the required needs of the business.
-9%LTIFR²
-26%AIFR²
We have reduced our Lost Time Injury Frequency Rate (LTIFR) by -9% or equal to 1.22 and All Injury Frequency Rate (AIFR) by -26% or equal to 7.56 versus our 2018 baseline driven by the improvements on our international operations. We are on track in achieving our 2030 commitments as we increase the safety implementation programs across the operation.
Education:
Live UP
Flourish Pilipinas Kabalikat Program
Nutrition:
Live Right
Sustainable Potato Program
SAGANA Sustansya
Environment:
Live Clean
Coastal Cleanup Tree Planting
We have increased the total number of beneficiaries by 35% or equal to 2,522 individuals versus our 2018 baseline as we develop programs specific to Education and Nutrition. We were able to support teachers and students through Flourish Pilipinas, kabalikat partners through Kabalikat Program, farmers through the Sustainable Potato Program and elementary students through the SAGANA Sustansya Program.
Among the 163 undernourished children who participated in the SAGANA Sustansya program in 2019, 155 have improved their nutritional status which led to a 95% overall improvement rate.
We have increased the total number of our volunteers by 157% or equal to 663 employees versus our 2018 baseline as we further promote our coastal cleanup and tree planting initiatives.
We are on track in achieving our 2030 commitments as we strengthen our communication through better reporting. In 2019, we conducted a roadshow on Live Sustainability, Live URC Framework to help increase the awareness of employees on our CSR metrics.
1 Data covers the total number of URC regular employees excluding BOPP, UFLEX and AU only
2 Data covers manufacturing facility of Total URC
2 Data covers manufacturing facility of Total URC
Our Products
Our Commitment
Quality
We will consistently deliver products of high quality as we ensure that our processes will always be aligned to the best-in-class standards.
Portfolio
We will improve the nutrition & wellness profile of our product portfolio aligned to the URC Wellness Criteria.
Packaging
We will reduce our packaging footprint and make 60% of our packaging recycle-ready.
Our 2019 Progress
FSSC
2019: 8 Plants
As of 2019, we have an existing FSSC (Food Safety System Certification) to 8 URC plants. This includes 3 plants in Thailand, 4 from Vietnam, and 1 in the Philippines (Distillery-CO2 plant). We are on track in achieving our 2030 commitments as we further pursue the FSSC certification of the remaining URC facilities. Our passion for quality is anchored on our vision to provide our customers with brands of exceptional quality and value.
Total Snack
85%
of SKUs which covered 150 SKUs passed 1 or more than of the URC Wellness Criteria
50%
of SKUs which reformulated 89 SKUs passed 2 or more of the Wellness Criteria
Beverage
86%
or 72 SKUs passed 1 or more of the URC Wellness Criteria
73%
or 61 SKUs passed more than 2 of the URC Wellness Criteria
We started our work in packaging footprint and we are making good progress.
80% of our total packaging is recycle-ready
We will be releasing our second GRI report this year, which will give more color on our sustainability program and the drivers of our progress in 2019 versus our 2018 baseline.
II. Product Supply Chain
Transformation
The ongoing transformation of our operating model is key to enable better customer satisfaction, market reach, productivity, cost efficiencies and service responsiveness in our end-to-end product supply chain. In 2018, we started evolving our structure into an integrated supply chain — ensuring seamless integration from order planning, procurement, manufacturing, and logistics. This new integrated product supply chain organization is undertaking a multi-phased journey in three areas :
LEAN Manufacturing Excellence
We continue to adopt best practices to eliminate waste and optimize conversion costs. In 2019, we piloted LEAN manufacturing in one of our biggest and most diverse facilities (in terms of manufacturing lines) in the Philippines. Through this pilot we aim to create a replicable process that reduces materials waste and utilities cost, improves production yields, and optimizes labor productivity. We expect a total of one billion pesos savings in the Philippines from LEAN over three years.
LEAN Manufacturing
- Successful pilot of Lean in Calamba
- Application of LEAN Mindset in the Philippines
- Philippines Reduced production wastage by 30 bps
- Water & Energy Usage Ratio improved more than 10%
We achieved our 2019 target of PHP 200M savings from the implementation of LEAN manufacturing projects in Calamba plus the inculcation of the “LEAN mindset” across the rest of the facilities in the Philippines. The LEAN mindset enabled the organization to be more responsive towards addressing issues raised by line operators, who are now enabled by new capabilities via training and availability of analytical tools. The new integrated supply chain structure also created a more collaborative process to prevent wastage in input material and finished goods. As a result, production wastage was reduced by 30 basis points; and water and energy use ratios improved by more than 10%. For 2020, we expect more savings as we roll out LEAN and replicate our learnings from the pilot to all facilities in the Philippines. We are now expanding this program from manufacturing to other activity systems like formulation, packaging and logistics.
Better Sales & Operations Planning
Prior to the establishment of our integrated supply chain structure, URC’s complexities over time led to siloed operations and discrepancies in operations planning information management. Demand forecasting, materials and production planning, transport and logistics were fragmented and difficult to coordinate. This resulted to inaccuracies in customer order fulfillment and low enterprise order fill rate.
In 2019 we transformed our sales and operations planning governance. Collaboration and process discipline were significantly improved, and forecast coordination across the value chain were aligned. As a result, we significantly improved the timely fulfillment of customer orders and freshness of our products in the market. Our enterprise order fill rate reached as high as 90%+ in the most complex business units, and well over 95% in the simpler SKU line up operations.
Supply Network Design (SND)
SND is aimed to optimize our entire production network, given the large number of facilities across the region and the need for additional capacity and space to support future growth. While larger, multi-category plants will drive higher operational efficiencies, other factors like contingency, resiliency, and distance to demand are also factored into the overall equation. Similar to LEAN, this transformation is also a multi phased approach and will cover both our Philippine and international operations.
Our Progress:
Last year we completed our Supply Network Design study and we were able to identify the opportunities to improve long term cost efficiencies while supporting future business expansion. This study provided an initial roadmap of optimal supply points to match demand centers of gravity. This will entail some facilities rationalization and consolidation, balancing cost and supply resiliency. The end-state of our supply network design will also enable better regional sourcing support and scale further our Global Exports business.
III. Partner of Choice
Our decades of experience enabled us to gain capabilities in serving the evolving retail landscape. Our customer engagement along with the wide product offerings and price points made us one of the biggest suppliers of top retailers today. As we grow the business, we continue to reinvest in capabilities that will drive scale and efficiency in our distribution and account management, as well as supplier base development. We aim to be a strong partner of choice today and the coming years by further raising our collaboration with long term customers and suppliers.
General Trade: Route-To-Market Strategy
Our Route to market strategy focuses on increasing our direct distribution (coverage), better productivity & sales quality (lines sold) driven by consistent perfect store presence like excellent merchandising and quality of product lineup in stores. We piloted a major reinvention of coverage expansion in the Philippines. This has exceeded our initial targets and has contributed significantly to the growth of BCF Philippines.
As part of this route to market reinvention, we are also building new capabilities. The implementation of Sales Force Automation has been instrumental in driving our vision of leapfrogging our distributor capabilities through digitization. This allowed our distributors to cover more stores in the most efficient manner. In addition to handheld devices, we also utilized geotagging in both current and prospective outlets to effectively monitor our salesman productivity in terms of daily routes as well as monthly acquisition of new direct accounts.
Modern Trade Key Accounts: Joint Business Planning
As trade dynamics continue to shift to modern retailers, we made significant investments to step change our engagement with the top modern key accounts across territories. We have re engaged our key customers and drove strategic partnerships through joint business planning. We are reaping the benefit of aggressive growth rates in our key customers as we plan and execute better shopper plans with them. With our continuous customer engagement, we started to be recognized as a preferred supplier by our key customer partners.
IV. Products & Brands
People Love
In 2018 we established Innovation Process Management (IPM), our platform in our Brand and Products People Love Strategy, that will accelerate our ability to launch new brands. Our direction towards IPM is to strengthen our insighting processes to drive new product development and renovations of existing brands without compromising entrepreneurial speed and agility. IPM also served as a cornerstone of our “Where-to-Play” strategy in which we classified as Grow the Core and Expand for More. Our plans towards Grow the Core ensures that our core products remain competitive by revisiting our proposition while Expand for More focuses on adjacencies in our existing categories, emerging trends, and new sources of growth. In 2019, our IPM delivered the following:
Relaunch of Great Taste White: The relaunch of Great Taste White was considered one of the most critical priorities in 2019. We restaged our original Great Taste White with the better formulation and new packaging along with two new flavors, White Caramel and White Crema. With the relaunch of GT White, we offer the broadest range in the white coffee format in the market, giving consumers more choices on how to enjoy their white coffee mix.
Piatto’s and V-Cut Party Packs: We started expanding our mainstream snacking portfolio at both ends of our price points. We launched a Piattos and V-Cut in Supersized pack that is priced higher at 55 pesos, which can lift our average selling prices while we launched Mr. Chips at P3.00 to participate in the 1-5 pesos price point.
When it comes to new flavors, we also launched Chicharon ni Mang Juan, in Classic Chicharon flavor as we continue to re-excite our consumers and further build our extruded snacks category. Internationally, in Thailand, we continue to push new flavors that Thai consumers love as we launched Roller Coaster Spicy Shrimp flavor while in Oceania, we launched the limited edition Thins Himalayan Pink Salt.
In biscuits, we’ve expanded the Dewberry and Cream-O line with Chocoberry and Choco-O Plus.
In Q4, we relaunched Cloud 9, and we leveraged on the key strength of the brand as we translated it into a new look and campaign.
In our Noodles Category, we continue to strengthen our Nissin Cup Noodles brand by launching a Cheesy Seafood Flavor in Q4 to give consumers a new and exciting experience with their beloved Nissin Seafood Flavor.
We started building our wellness portfolio to serve consumers who are actively looking for better-for-you snacking options. In Q1, we launched Nice & Natural snack bars in the Philippines, Indonesia, and Natural Chip Co. Veggie Rings in Australia.
In Beverages, we launched C2 Plus Fiber in Green Apple and Pineapple flavors, a functional adjacency of our C2 brand that promotes better digestion.
In snacks, we’ve launched a classic crunch version of Nova as our response to a new snacking trend. Nova Classic Crunch has only 90mg per serving of sodium approximately.
Another play in wellness is the recent launch of Vitasoy Milky in 1 liter Tetra, which is aimed to target the bigger mainstream dairy segment in the Philippines as it delivers the creamy and milky taste without the beany taste of soy milk.
In Oceania, we have launched snacking crackers such as Natural Cracker Co and Kettle Flat Bread Crackers in Australia, and in New Zealand, we launched both Snax Crunches and Huntley & Palmers Lavosh Crisps.
Building adjacencies in beverage
We’ve relaunched our water brand, Refresh in Q2, as we make a plan to be more deliberate in participating in the water category, which is one of the fastest-growing RTD beverage segments. Apart from expanding our Better For You platform, we relaunched Refresh as a brand with a purpose (100% recycle-able) with a new packaging design. In Vietnam, our latest launches, which are the Black Tea and Milk Tea, drove growth in the 1H as consumers look for new beverage experiences beyond fruit-based tea. Our 2019 campaign was successful, and the black tea/milk tea line significantly contributed to C2’s total sales by double digits in 2019. Lastly, with our JV in the Philippines with Danone, we continue to drive B’lue, especially in channels like convenience stores by launching B’lue Cactus Tangerine flavor.
Building our Value Added Portfolio in AIC:
We started this transformation when we launched packaged meat products, which is the next phase in our value-added chain under Robina Farms brand on top of our meat cuts. These products cater to households looking for more choices in high quality processed meat such as Tocino, Honeycured Bacon, and Skinless Longganisa. We continue to differentiate in terms of quality, which adheres to Robina farms’ highest standards, ensuring that it is family-safe, free from Antibiotic Residue and Hormones from our homegrown hogs and a product of our AAA certified abattoir.
Our Animal Nutrition & Health Business (ANH) has been nurturing new growth streams, such as dog feeds, food, and pet care essentials. Our dog meal brand, TopBreed, was formulated to satisfy the nutritional needs of dogs for good health, general well-being, and optimum performance. TopBreed continues to expand its market by entering the modern trade channel. Today, TopBreed is the number #1 dog food in the Philippines in terms of volume, and we continue to nurture this category of ANH.
Besides dog meals, we expanded into dog essentials through ShamPooch Dog Bath Essential and TopB+ Multivitamins. ShamPooch was formulated from natural ingredients to provide top care for dogs by gently washing out dirt while keeping the dog’s coat smooth, and shiny, and ensuring a long-lasting fresh scent. It comes in 1Liter, 300ml, and 15ml packages to suit different needs of Petcare owners. TopB+ Multivitamins is a daily nutritional supplement for Dogs of all ages containing all essential multivitamins, Lysine, and Zinc. It enhances growth, boosts brain function, and strengthens immunity. It comes in 60ml and 120 ml bottles.
