04
Strategy
Updates
“The important thing to know is that life will always deal us a few bad cards. But we have to play those cards the best we can. And we can play to win!” — Mr. John
Strategy Updates
URC’s launchpad for moving beyond boundaries is built upon a sound strategy of hitting targets, securing progress, and exceeding expectations.
Throughout 2020, our ‘How-To-Win and Where-To-Play’ frameworks aided us in adapting to the challenges posed by the pandemic. Borders closed and consumer needs rapidly shifted, but we did not waver. Instead, URC revisited its core strategies and steered through trials by means of thoughtful innovation.
Here are our leading breakthroughs across our four main platforms:
Products and Brands People Love
At URC, our mission is to delight everyone with good food choices. To achieve this, we develop our food and beverage products through our Innovation Process Management (IPM) system, established in 2018.
IPM strengthens our insighting processes, drives new product development and renovation of existing brands without compromising
entrepreneurial speed and agility. It’s a cornerstone of our ‘How-to-Win’ strategies that allows us to nurture brands with purpose – satisfying customer needs amid shifting trends.
This year, we solidified our IPM with the full integration of our Where-to-Play strategies into the system: Grow the Core and Expand for More.
Grow the Core guides us in refining our propositions and maintaining competitiveness in existing segments we play in.
Expand for More helps us identify pressing needs, emerging trends, and new sources of growth in adjacent segments or categories.
For 2020, we followed through on these key areas:
Healthy Snacking
More people becoming mindful of their well-being has resulted in a greater demand for healthier snack options. URC is ahead of this curve, with several hearty food and beverage choices in the pipeline to support this lifestyle shift.
We’re currently expanding our C2 line, with last year’s launch of its fiber variants, Green Apple and Pineapple.
Introducing Shield+ and BioSure
The demand for hygiene and sanitation products spiked in 2020, particularly for pharmaceutical-grade rubbing alcohol. This motivated us to diversify and launch Shield+ and BioSure, providing essential supplies to more communities. Our recent distillery expansion under the Agro-Industrial & Commodities division will secure capacity for long term production.
Value-adding Variants
Consumers were also on the look-out for products at appealing price points. We took this as an opportunity to cater to a broad spectrum of budgets.
We relaunched Great Taste Premium Classic, our value for money soluble coffee. Customers can also stock up on salty snacks with our affordable new line of Seacharon ni Mang Juan in Chilimansea and Isdalicious flavors.
Supersized Family Treats
The pandemic has led to a shift to in-home consumption. To address this, we created bigger, for sharing, supersized selections for our products, such as Piattos Supersized and Refresh in 5L bottles.
We also introduced C2 milktea variants to satisfy consumers’ increasing appreciation for tea drinks, available in Wintermelon and Choco flavors. The positive response inspired us to reimagine our other beverages. Innovating our signature coffee blend, we came up with our café-inspired Great Taste Iced Coffee in Vanilla Latte, Caramel Macchiato, and Chocolate Mocha, extending the coffee shop experience anywhere both out of home and in home.
Simple Joys at Home
In candies, we produced a wider range of options for consumers to enjoy with chewy Lush Chocolate and Strawberry and X.O. Milk Tea. We also added new flavors to our flagship chocolate brands with Nips Fruit and Nut and Cloud 9 Peanut Butter.
Loyal Cream-O consumers were rewarded when we brought back our limited-edition Cream-O Premium chocolate-covered biscuits.
Preferred Partner of Choice
Over the years, URC has become one of the top suppliers for major retailers. We are grateful for our partners who continue to trust in our commitment to deliver and in our capacity to evolve. We intend to sustain this with strategies that build upon our integrated supply network.
Today, we foster lasting customer engagement, create diverse product offerings, and maintain accessible price points – setting the landscape for more win-win collaborations.
As we journey towards our Ambition 2035, we’re investing in capabilities that will boost our distribution efficiency and account management. This ties in with our expansion plan to drive and scale up our operations and strengthen our supplier base.
Taken together, these efforts accelerate our goal of becoming a dependable, global sustainable enterprise.
Route-To-Market Reinvention
General trade focuses on our widespread
distribution of products to small retail and wholesale establishments. These crucial groups of retailers allow us to reach consumers who prefer day-to-day purchases.
We focused on streamlining our Route-To-Market strategy, following the pilot of our major Philippine coverage expansion last year. We retained perfect store presence through compelling merchandising and excellent product lineup quality across various outlets. The team also enhanced direct distribution, as well as productivity and sales quality for lines
sold.
Last year’s digitization efforts helped us overcome trade limitations caused by the pandemic. The implementation of Sales Force Automation jumpstarted distributor capabilities, allowing us to prioritize lead generation. We also utilized geotagging in both current and prospective outlets, which we used to monitor daily salesman productivity and monthly acquisitions of new direct accounts.
Alternative selling channels were introduced to deal with imposed movement restrictions and address shifts in the retail landscape. We entered the e-commerce channel and implemented initiatives like URCommunity Mart, a roving store which brings well-loved URC products closer to communities, and social commerce which connects sari-sari store owners with distributors that cover their area.
During this reinvention process, we secured our Route-To-Market progress despite border
limitations, pressing on to arrive at valuable outcomes.
Joint Business Planning
For modern trade accounts, we supply a diverse range of products in bulk quantities. Our key partners in this division are composed of large retail institutions, such as supermarkets, groceries, and hypermarkets.
When it comes to modernizing trade, URC has made investments to elevate its engagement with key accounts through joint business planning. The two-way process has opened doors for engaging discussions with key customers, driving strategic partnerships in various territories.
This year, we reaped the benefits of aggressive growth rates, made possible with ideas shared by our key accounts. From precise shopper plans to intuitive consumer engagement, our joint planning strategy made URC a preferred supplier among key partners.
Product Supply Chain Transformation
Encompassing URC’s vast network of partners is a comprehensive supply chain framework that is integral to our seamless operations. It’s responsible for ensuring we deliver fresh products in full and
on-time day in and day out. This is why URC searches for new ways to improve its product supply chain through its supply chain transformation program, which began in 2018.
The on-going optimization has allowed us to improve multiple aspects of the business: customer satisfaction, market reach, productivity and cost efficiency. In terms of structure, we have a fully-integrated supply chain that transitions between processes with ease – from material planning, to product manufacturing, to product storage and down to logistics and delivery.
Our multi-phased supply chain transformation journey continues in these areas:
LEAN Manufacturing Excellence
The LEAN manufacturing methodology has supported countless businesses across industries to minimize waste and optimize conversion costs. We began incorporating the LEAN method in 2019, starting with one of our largest manufacturing facilities in the Philippines. Our goal was to carry on this process to reduce material waste and utility costs, improve production yields, and optimize labor productivity.
The success in our pilot plant prompted us
to impart the “LEAN mindset” through training sessions across all our domestic facilities. Our manufacturing teams, now equipped with the right skills and analytical tools, became more proactive in solving issues.
Today, we are currently expanding the LEAN program to other areas, such as product reformulation, packaging and logistics. It continues to enrich our integrated supply chain, cutting down on wastage in input material and finished goods.
Better Sales and Operations Planning
There was a clear need to reform our sales and operations management, as expansion made processes increasingly complex. With the introduction of transformative planning governance, we were able to simplify our processes. Our timely fulfillment of customer orders garnered impressive and satisfying feedback.
Supply Network Design (SND)
Similar to our LEAN manufacturing program, SND uses a multi-phased approach that covers our domestic and international operations.
After completing our SND study in 2018, we identified several opportunities to improve our long-term cost efficiencies while supporting
business expansion. We took actionable steps within the year to move our initial SND roadmap along.
Through the study, we were able to rationalize and consolidate certain facilities to balance costs and improve supply resiliency. It allowed us to optimize our supply points, assigning key areas of high demand within their proximity to minimize transportation costs. Moreover, our SND generated meaningful results, such as enhanced regional sourcing support and upscaled Global Exports.
People and Planet Friendly Culture
Among URC’s priorities is covering multiple sustainability dimensions that uphold the welfare of the environment and communities.
This is best summed up in our People and Planet Friendly Culture, where we spearhead programs that ensure we leave a positive impact on the areas in which we operate.
World-class Talent
We engage in talent development and next-generation leadership training, encouraging holistic growth in our people. Our digitization and process simplification initiatives are vital in developing new skill sets in our people and for project collaboration.
In 2020, we also ensured the safety of our people with adjustments in how they work. For our essential workers, we supplied personal protective equipment, transportation services, and workplace safety protocols to secure everyone’s well-being.
For others, we moved to a work-from-home set up, which allowed people to collaborate productively while staying safe. Today, we are exploring ways to maintain this positive impact on our work environments.
We also continue to promote our We also continue to promote our Living in an Injury-Free Environment (LIFE) safety initiatives for on site- team in our distribution and production facilities. This includes ensuring safety measures are in place in addition to the proper use of protective equipment to prevent work-related injuries.
Our hope is that this secure, open, and fluid office work situation increases our people’s passion, creativity, and dedication to the work at hand.
Our Commitment
Growth in Talent
We empower the organization through our People and 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 Progress
Our People
Growth in Talent
We started adapting to new raining
methodologies such as digital learning
through the URC University Virtual
Learning Plan.
Safety
-26%
Lost Time Injury
Frequency Rate
Spacer
-27%
All Injury
Frequency Rate
Sustainable Global Enterprise
By 2035, URC aims to become a sustainable global enterprise, spanning from operational practices down to our end products.
We aim to achieve this through our natural resource management and product portfolio improvement program ‘Live Sustainably. Live URC.’ It includes responsible resource consumption and proper waste management.
To stay on track in delivering our sustainability goals, we restructured our existing steering committee to oversee this progress. The team is composed of senior leaders with regional roles who will integrate and relay these initiatives to their respective areas.
We also oriented our country and division heads to cascade the program in their respective areas. Since then, this proactive approach has solidified our governance model, promoting accountability, productivity, and trust.
Our Commitment
Energy Efficiency & Reduction
in GHG Emissions
We will optimize our energy use by
improving Energy Use Ratio by 30% by
2030 and its impact on Carbon
Footprint (GHG)
30%▼
Water Conservation
Substantially improve water use in our
facilities by improving our Water Use
Ratio by 30% by 2030
30%▼
Our Progress
Natural Resources
-3%
Energy Use Ratio
We improve our energy use ratio (EUR)
versus our 2018 baseline as we
continue to optimize our resources
with initiatives that drives more
efficient use of energy.
-14%
Water Use Ratio
Our water use ratio (WUR) continues to
progress versus the 2018 baseline as
we drive water saving initiatives.
Coverage: Manufacturing facility in PH, INT, and flour
Quality Planet-Friendly Products
URC also focused on incorporating sustainability into its product portfolio.
We endeavored to make improvements in the nutrition and wellness profile of our products. This led us to create the URC Wellness Criteria which evaluates each product and balances delight with proper nourishment.
In terms of resource conservation, our R&D and manufacturing divisions collaborated on improving our energy and water use ratios. This year, we’ve managed to reduce our energy consumption by -3% through the efficient use of machinery and equipment in our local facilities. Our water use ratio was also cut down by -14%, which was driven by the recycling of wastewater across business divisions.
The combined effort of our people has effectively brought us a step closer to achieving our zero-waste initiative. As we develop more innovative environmentally friendly practices, our hope is that it inspires consumers to do the same in their homes.
Our Commitment
Our Products
Quality
We will consistently deliver products of
high quality
Product
We will improve the nutrition or wellness
profile of our product portfolio aligned to
the URC Wellness Criteria
Packaging
We will reduce packaging footprint and
make 60% of our packaging recycle-ready
Our Progress
Our Products
Portfolio
We made improvements in the nutrition &
wellness profile of our product portfolio aligned
to the URC Wellness Criteria
Packaging
Enriching Lives
The most integral part of our sustainability journey is caring for society and the communities that continue to believe in URC.
It is our shared ambition to champion positive change. We do this by improving different touchpoints in people’s lives.
We take part in coastal clean-ups and tree planting programs every year in partnership with environmental organizations.
For nutrition, URC received the bronze prize during the 2020 Asia-Pacific Stevie Awards for SAGANA Sustansya. The program strives to eradicate malnutrition among public school students in the Philippines, and we hope to reach more communities in the future.
In addition to this, we also continue our partnership with the Department of Agriculture for our pioneer Sustainable Potato Program. It aims to support Filipino potato farmers to increase their crop yields and scale-up productivity.
URC also takes part in several educational initiatives across various sectors. Flourish Pilipinas, led by our Flour and Pasta division in partnership with the Department of Education (DepEd), provides practical
instructional materials and training programs on baking and pastry production. We share our knowledge with senior high school teachers to aid them as they teach their students.
Our Kabalikat Program allows us to share our experience with local farmers to transform and elevate their livelihood. This includes training on the upkeep of piggery and poultry farms and easy access to feeds and veterinary medicine.
Project Salig is a program of URC SURE that started in 2019 with the aim to develop partnership with sugarcane planters in districts where URC sugar mills operate. “Salig” is a Visayan word for “trust”; hence, the program aims to create partnership based on trust. URC’s sugar mills endeavors to address major areas of concern for the planters – sugar recovery and farm yield, turn-around of hauling trucks during the milling season and customer service provision.
In 2020, we also partnered with GMA Kapuso Foundation for the Bike for Good project. The program aims to help people from Metro Manila and Rizal, who lost their livelihood or source of income due to the COVID-19 pandemic or typhoons. The beneficiaries received a Negosyo starter package (bike and bread products from Baker John) for them to start a community selling business.
Our Commitment
Our Communities
We commit to improve people’s capabilities leading to better livelihood, improved nutritional level, and environmental stewardship in communities where we live and operate.
Our Progress
Education
1. Flourish Pilipinas
2. Kabalikat Program
3. Bike for Good Project
4. Project SALIG
Nutrition
1. Sustainable Potato Program
2. SAGANA Sustansya
Environment
1. Coastal Cleanup
2. Tree Planting
