MANILA -- When 26-year-old employee trainer Karl Molina made a recent excursion in Vietnam, he was surprised to see a familiar bottled tea he often drinks during office breaks in Manila.
"I saw C2 in Hanoi. All along, I thought it was only available in the Philippines," he said. He was even more amazed when he was told that Philippine company Universal Robina actually produced his favorite ready-to-drink tea in Vietnam.
Universal Robina's branded beverages, cookies, chips, chocolates, candies and noodles are household names in the Philippines, but many Filipinos are not aware that their much loved snacks are also enjoyed elsewhere in the region.
C2, a leading tea drink in Vietnam, is one of Universal Robina's most successful products abroad. The publicly listed company also sells potato chips, cookies and candies in Vietnam, and the Vietnamese love them so much that the company decided to build its third factory there last year.
But before its move into Vietnam, Universal Robina began its cross-border expansion in Malaysia as early as 1982. There, its snacks, wafers and chocolates were also a hit.
Later, the company bolstered its regional presence by establishing manufacturing plants in Thailand in 1992, followed by China in 1993, Indonesia in 2002 and Vietnam in 2004. Its production facilities in Malaysia and China also serve the Singapore and Hong Kong markets, respectively.
"We built the international business organically by applying our years of experience in building brands and distribution capability in the Philippines," CEO Lance Gokongwei said in an interview with the Nikkei Asian Review.
"Our vision then was to build at least three legs in each of the markets we entered and be in the top three of all the categories, with the overall objective of becoming one of the largest and most respected Philippine-based ASEAN (Association of Southeast Asian Nations) fast-moving consumer goods companies," he added.
In trying to achieve this, Universal Robina searches for opportunities in snack food and beverage categories that are similar to what it offers at home.
Lance Gokongwei
"But we localize flavors and marketing communications, given the differences in consumer preferences, tastes, wants and needs across the markets where we operate,"Gokongwei said.
The company is currently completing a $30 million confectionery and cookie production facility in Myanmar, while expansion in Laos and Cambodia is also being considered.
"We think it is important to be early," Gokongwei once told analysts who quizzed him about the prospects in Myanmar, which is undergoing massive economic reforms after decades of seclusion.
Aside from being prompt, Universal Robina's success abroad could be traced from its home market.
"Its advantage is it's born in the Philippines, where the market is already tough," said Lovell Sarreal, a consumer analyst at Maybank ATR Kim Eng.
Two-thirds of the Philippine economy is driven by domestic consumption, but the nation of 100 million people is made up of more than 7,000 islands, making logistics and distribution challenging.
Another advantage of Universal Robina is that its brands are not yet as big as its multinational competitors, giving it room for more innovation.
"Universal Robina, I think, has more flexibility in terms of product innovation. They can have a particular variant for a particular market," Sarreal said.
Its products' affordability has also allowed the company to penetrate the broader market. In the Philippines, it offers a wide range of cheap snacks, from candy costing less than a peso to 10-peso bags of chips.
But as household incomes increase across Southeast Asia and more people look for tastier foods, the company has also begun building up its premium product portfolio.
"The middle class is growing tremendously in these markets. What we are doing is to address the needs of the middle class," Gokongwei said, describing their eating habits as "on the go" but with "taste and health" on their minds.
"Increasingly, they are looking for a day-to-day indulgence," he went on. "So that is our focus. We are coming out with products that we can delight them with every day."
In 2014, the company struck three aggressive deals, all geared toward more product offerings for the more discriminating market.
Universal Robina teamed up with Japanese food maker Calbee for Philippine production and sale of the Japanese company's products. It also forged an agreement with Danone Asia Holdings to expand Universal Robina's beverage portfolio, although Gokongwei declined to provide details of this venture. In July, it acquired New Zealand-based NZ Snack Food Holdings, the company behind biscuit maker Griffin's Foods, for 700 million New Zealand dollars ($540 million), in its first venture outside Southeast Asia and China.
"We believe Griffin's is at the forefront of global consumer trends in snacking, including indulgence; a sense of play and excitement; using natural ingredients; ensuring traceability of source; and providing healthy alternatives," Gokongwei said when the deal was announced. "We are very excited to introduce and grow these brands in Asia."
And the company, which has doubled its profits to 10.1 billion pesos ($225 million) in the last five years, appears to be not finished yet. "We continue to be on the lookout [for acquisitions]. But again, we may look like we are expanding very fast, but we are very focused. We want to focus on the categories in which we have expertise."
There were also headwinds in the course of its expansion abroad. But Universal Robina's long-term strategy has been well-received by investors. The company is one of the best-performing stocks in the Philippines, rising by 73% in 2014.
