Special Features
Fuel for Growth Update
URC’s Fuel for Growth program is, in simple terms, our initiative to further drive the business through operational cost savings, using some of these savings as fuel to propel growth.
We started in 2019 with our adoption of the LEAN Manufacturing system, with a goal to generate Php 1 billion in savings over the next 3 years (2019- 2021), which we achieved handily.
This success motivated us to up the ante and expand our optimization efforts not just in manufacturing, but across our entire operations including our supply network and product portfolio. We set a new commitment in 2022 to reach Php 5 billion in savings over five years, or Php 1 billion a year. We called this new drive Fuel for Growth – and things have really taken off.
In 2022 we surpassed our target, achieving over Php 1.5 billion in savings. By 2023, we continued to exceed our targets, this time hitting Php 1.8 billion in savings.
In addition to cost savings, Fuel for Growth has had a ripple effect on our operations empowering teams. By investing in our people and exposing them to better trainings and tools, they’ve been able to collaborate, innovate, and increase productivity to tackle challenges and allow cost savings to expand and scale up.
In terms of procurement, we continue to explore new supplier opportunities, and seek cost-efficient alternatives while maintaining the quality standards our customers expect.
Advances in product formulation allow us to create new products at better costs, retaining – not sacrificing – our trademark product quality.
We also continue to embrace digital advancements to enhance customer experiences and optimize internal processes.
We’ve made significant strides in improving our efficiencies, managing material inputs and reducing variances – aligning perfectly with our Sustainability goals.
Our Supply Network Redesign roadmap will allow us to optimize our manufacturing footprint, and operations, ensuring that we continue to provide our customers with good quality products in a timely manner.
All told, we’ve made significant strides in improving our efficiencies, managing material inputs and reducing variances – aligning perfectly with our Sustainability goals.
We fully expect 2024 and beyond to be as fruitful and productive as we’ve presently experienced. If the recent results of our Fuel for Growth program are anything to go by, we’re incredibly optimistic about what lies ahead.
Sustaining, Transformative,
and Disruptive Innovations
URC is built on and sustained by collaboration, the magic of two or more parties sharing their strengths to create impressive, synergistic outcomes. This approach to business can be seen in our boardroom, our factories, and even in our products themselves.
Indeed, in 2023 we’ve worked hard to pursue fascinating new “partnerships” of taste, ingredients, and branding that have resulted in fresh and delicious concoctions. And how fitting that in a year of tough business challenges, we’ve been able to sharpen our collaborations, both within the company and in the products we’ve created in 2023 – to great effect.
The key actions here were to leverage major URC assets and combine them with other brands or flavors, then launch them in a series of fun and calibrated roll outs.
Our strategy worked. Enthusiastic consumer response led to stellar revenue gains, with new products from the last 3 years contributing to almost 9% of URC’s total branded revenue for the full year.
Our strategy for new products is built upon two key ideas:
▸ Consumers are excited by novel
products
▸ There is tremendous equity in
URC’s flagship brands
New Segments
Great things can come out of great collaborations. Great Taste Coffee, a historic, popular brand, was combined with Cream-O, another beloved URC product. The result was Great Taste Cream-O, a unique coffee-cookie mix with real cookie crumbles created for more enjoyable coffee breaktimes.
Dewberry, a popular cream and jam biscuit brand, was used to create a new product featuring fruit yogurt and soft cake elements, and positioned as a treat for all occasions. With Dewberry Yogurt Cake it proved to be another hit, expanding our presence in the cakes category.
Fascinating Flavors
Mang Juan, true to its promise of offering classic Pinoy snacks, launched Kropek ni Mang Juan Spicy Fried Pusit. This squid flavored snack has a light, crispy texture with just the right amount of spice, that every Juan will surely love.
Piattos, another leading snack brand in the URC family, also received some stately treatment with the release of Piattos Truffle Cream. As the name implies, Piattos Truffle Cream combined the rich, earthy truffle flavor with smooth, milky cream, making personal moments and everything you love more enjoyable.
On the confectionary side, Nips Creamy Tiramisu saw us marry Nips, a fun and colorful chocolate brand, with tiramisu, a premium Italian dessert. An unlikely pairing on paper, it proved otherwise in people’s palates, where it scored points for its infusion of coffee-infused ladyfinger biscuits, creamy mix of eggs, cream, sugar, and mascarpone, and cocoa powder toppings. Nips Creamy Tiramisu is now a permanent fixture in URC’s chocolate line up, expanding its consumer base.
Healthy and Whole
On the health front, URC launched Jack ‘n Jill Nova Greens, a snack alternative made with healthy ingredients, including malunggay (moringa oleifera), aimed at health-conscious snackers. Nova Greens comes in two flavors: Nacho Cheese and Sweet Corn, infusing multi-grains and vegetables with delightful flavors, surely a tasty green snack on the go.
Another mixed offering aimed at the health-conscious coffee drinker was Blend 45 Malunggay, which combined our popular Blend 45 coffee with the nutritious benefits of malunggay, Vitamin C and Zinc.
Mounting inflationary pressures throughout the Philippines meant that consumers chose to be prudent with their spending. By listening to this signal, URC was able to make bold, counter-stream decisions and create products that offered consumers more value and fun choices, truly making life more fun with Jack ‘n Jill.
The result has been an increase in revenue, fruitful new brand collaborations, and the successful management of product mix.
URC was able to make bold, counter-stream decisions and create products that offered consumers more value and fun choices, truly making life more fun with Jack ‘n Jill.
Investments
for Long Term
Growth
An enduring company is one that not only anticipates and plans for the future, but actively seeks to nurture both its physical assets and human capital.
This has been a hallmark trait at URC, and particularly relevant in these turbulent, ever-evolving times.
This year, in keeping with our wider vision to create a sustainable business, URC has made several investments, including capacity expansions and the redesign of our supply chain network, to boost efficiency in our branded business and lay the groundwork for future expansion.
In Cebu, the construction of feed mills under our Agro-Industrial Group (AIG) is ongoing, with an expected commercial run by 2024. This is a huge leap for AIG, bolstering capacity and output for the growing animal feeds and pet food markets.
In Sariaya, Quezon, we’ve added assets and expanded our Flour facilities to strengthen capacity and support growth in the region. Commissioning will commence in the latter half of 2024.
Perhaps our biggest and most significant investments this year were made in Batangas, in south Luzon.
Our acquisition and the ongoing reconditioning of the idle sugar milling equipment of Central Azucarera Don Pedro Inc (CADPI) in Balayan, Batangas will increase capacity from 5,000 tons of cane a day to 8,000 tons daily. The benefits of this investment are threefold:
•Captures additional cane supply in Batangas
•Ensures sugar supply for URC’s customers
•Secures livelihood of some 14,000 displaced sugarcane farmers
Lastly is the establishment of URC’s mega site in Malvar, Batangas – a cutting-edge facility that will showcase state-of-the-art manufacturing technology in its operations. This includes the use of renewable energy sources (solar panels, rainwater recovery and wastewater systems) and other design improvements aimed at reducing material resource inputs, production wastage, and labor efforts.
Construction has already begun and will be finished in phases, with some lines up and running by the end of 2024. The entire construction will span 10 to 15 years. When completed, the Malvar mega site will cover more than 30 hectares, employ approximately 3,000 workers directly and indirectly, and ultimately be a driving production facility for a wide range of high-quality URC products.
These long-term investments in South Luzon and Cebu continue our mission to build an enduring business that both serves our customers and guarantees a healthy and sustainable future for URC.