Chairman's Message
“Through all the turmoil, I saw URC working hand-in-hand with the communities we serve – to be essential and to continue being
of service.”
Chairman's Message
“It was a tough climb over an unprecedented situation with long-term effects. Facing these realities, URC knew that it had to adapt in a decisive and timely manner.”
- Lance Y. Gokongwei
- Lance Y. Gokongwei
As I write these words, the world seems both very similar and markedly different from where we stood a year ago. We have lived through two years of COVID-19, and the pandemic continues to rage worldwide as infections continue to spread.
Southeast Asia, long a model of control over the pandemic, experienced a surge of the Delta variant through the region midway through 2021, necessitating more lockdowns in numerous countries.
Markets have yet to recover from the severe troughs of 2020 with consumer demand still muted throughout the year. Inflation continues its upward trajectory, as prices for basic necessities have gone up in lockstep with global commodities. Geopolitical tensions have also added to the mix, with the war in Ukraine contributing to further price and trade volatility. We are not out of the woods yet.
Southeast Asia, long a model of control over the pandemic, experienced a surge of the Delta variant through the region midway through 2021, necessitating more lockdowns in numerous countries.
Markets have yet to recover from the severe troughs of 2020 with consumer demand still muted throughout the year. Inflation continues its upward trajectory, as prices for basic necessities have gone up in lockstep with global commodities. Geopolitical tensions have also added to the mix, with the war in Ukraine contributing to further price and trade volatility. We are not out of the woods yet.
LANDMARKS OF RECOVERY
However, we also saw a renewed sense of optimism take hold, especially with COVID-19 vaccines rolling out across the world. The Philippines was able to inoculate more than half of its adult citizens through an increase in treatment accessibility.
While minimal breakthrough infections are still a concern, the weaker Omicron variant coupled with broader vaccination has lowered the risks for those who contract the disease. This has given governments the opportunity to ease the broader lockdowns that we’ve experienced early in the pandemic.
People are heading back to work with the continued recovery of service industries and ease of mobilization. Both domestic and international travel have opened up, bringing much-needed relief to local economies. Truly, there is a sense of return to some normalcy, and a more positive outlook moving forward – one that we see accelerating into 2022.
While minimal breakthrough infections are still a concern, the weaker Omicron variant coupled with broader vaccination has lowered the risks for those who contract the disease. This has given governments the opportunity to ease the broader lockdowns that we’ve experienced early in the pandemic.
People are heading back to work with the continued recovery of service industries and ease of mobilization. Both domestic and international travel have opened up, bringing much-needed relief to local economies. Truly, there is a sense of return to some normalcy, and a more positive outlook moving forward – one that we see accelerating into 2022.
SPRINTING ONWARD
Last year, URC focused on solidifying its foundation for growth, making sure that we have a strong base to build upon as we move past recovery.
We made structural portfolio changes in 2021 when we profitably divested our Oceania business, placing Snack Brands Australia and Griffin’s New Zealand under the stewardship of our former partner, Intersnack. While the exit is bittersweet, the URC team is proud of how we’ve transformed the business over the past seven years, and we look forward to its growth with Intersnack leading the business.
The divestment has steered our commitment back into our core developing markets, and we closed the year with the acquisition of Munchy’s, one of the leading biscuits manufacturers in Malaysia. With a strong track record of growth, beloved products, and a management team that fosters an entrepreneurial spirit, Munchy’s is a welcome addition to the URC family and its house of brands.
In strengthening our core businesses, the pandemic has pushed greater innovation in our product portfolio and routes-to-market. As offices and schools shifted to work-from-home and distance learning, in-home consumption grew significantly. Value for money selections became a prime consideration for customers given the mounting pressure on people’s pocketbooks. People prioritized health and wellness products, following the constant drumbeat on disease and immunity. Mental wellbeing became more important and consumers wanted to treat themselves to premium products that were still affordable.
We also saw exponential growth in both online purchases and direct delivery as people adjusted to mobility lockdowns throughout the year. E-commerce became a supplemental distribution solution for consumers to safely purchase their essentials while allowing businesses to thrive. BCFG distributors were also enabled through s-commerce, tapping social media to sell to nearby accounts without having to physically visit their locations.
Aside from digital channels, our AIG segment stepped up its Kabalikat Program by reaching out to more aspiring entrepreneurs who wanted to start their own businesses through Kabalikat Village Hubs. These Hubs provided not only a stable livelihood for our partners, but also served as a reliable source of essentials for communities. The program was an ingenious solution to address distribution limitations during the pandemic.
Over the past two years, the company accelerated the launch of new products, entry into e-commerce platforms, and expansion of non-traditional distribution programs, achieving a strong track record of success in the market – with more innovations to come.
We made structural portfolio changes in 2021 when we profitably divested our Oceania business, placing Snack Brands Australia and Griffin’s New Zealand under the stewardship of our former partner, Intersnack. While the exit is bittersweet, the URC team is proud of how we’ve transformed the business over the past seven years, and we look forward to its growth with Intersnack leading the business.
The divestment has steered our commitment back into our core developing markets, and we closed the year with the acquisition of Munchy’s, one of the leading biscuits manufacturers in Malaysia. With a strong track record of growth, beloved products, and a management team that fosters an entrepreneurial spirit, Munchy’s is a welcome addition to the URC family and its house of brands.
In strengthening our core businesses, the pandemic has pushed greater innovation in our product portfolio and routes-to-market. As offices and schools shifted to work-from-home and distance learning, in-home consumption grew significantly. Value for money selections became a prime consideration for customers given the mounting pressure on people’s pocketbooks. People prioritized health and wellness products, following the constant drumbeat on disease and immunity. Mental wellbeing became more important and consumers wanted to treat themselves to premium products that were still affordable.
We also saw exponential growth in both online purchases and direct delivery as people adjusted to mobility lockdowns throughout the year. E-commerce became a supplemental distribution solution for consumers to safely purchase their essentials while allowing businesses to thrive. BCFG distributors were also enabled through s-commerce, tapping social media to sell to nearby accounts without having to physically visit their locations.
Aside from digital channels, our AIG segment stepped up its Kabalikat Program by reaching out to more aspiring entrepreneurs who wanted to start their own businesses through Kabalikat Village Hubs. These Hubs provided not only a stable livelihood for our partners, but also served as a reliable source of essentials for communities. The program was an ingenious solution to address distribution limitations during the pandemic.
Over the past two years, the company accelerated the launch of new products, entry into e-commerce platforms, and expansion of non-traditional distribution programs, achieving a strong track record of success in the market – with more innovations to come.
AGILE AND ACCELERATING
Finally, URC has refreshed its ways of working with the launch of its Agile@Scale transformation in the Philippines, and we are preparing to roll it out broadly across the region. Agile allowed URC to organize into smaller and faster cross-functional teams, with a focus on action and being closer to the customer and the consumer.
With the new setup, product development has hastened, issues have been brought to light sooner, and problems have been solved much quicker while continuing to stay true to URC’s entrepreneurial culture and values. This has already paid dividends in the past year, with Agile squads generating significant operating savings and adding to the pipelines of innovative new products for the future.
With the new setup, product development has hastened, issues have been brought to light sooner, and problems have been solved much quicker while continuing to stay true to URC’s entrepreneurial culture and values. This has already paid dividends in the past year, with Agile squads generating significant operating savings and adding to the pipelines of innovative new products for the future.
As we enter a new phase of growth with COVID-19 receding into the background, we know that we are positioned for stronger growth in the years to come. This was made possible by all the foundational work we have done over the last two years: reshaping our portfolio, refreshing our new product pipeline and routes-to-market, revitalizing our ways of working, and reinforcing our distribution channels. We look forward to sprinting towards sustained success, riding the momentum forward, and bringing the company to new heights.
Once again, I would like to thank all our partners – our employees, customers, suppliers, consumers, and communities we work with – for all their support and dedication. With our strong foundation, we have weathered the storms of 2021 together, and are ready to accelerate the business into tomorrow.
Once again, I would like to thank all our partners – our employees, customers, suppliers, consumers, and communities we work with – for all their support and dedication. With our strong foundation, we have weathered the storms of 2021 together, and are ready to accelerate the business into tomorrow.
Lance Y. Gokongwei
Chairman
Chairman
