This article first appeared in The Edge Malaysia Weekly on February 8, 2021 - February 14, 2021

THE younger generation’s taste for biscuits may be different, but Julie’s Manufacturing Sdn Bhd’s sweet treats appear to be holding their own given that revenue has been rising in these Covid-19-challenged times.

As the family-owned company embarks on a healthy pipeline of marketing activities to boost demand, it is confident of a modest 5% to 10% sales growth for 2021.

Since November 2020, the biscuit manufacturer has been undergoing a S$1 million (RM3.04 million) rebranding exercise, which includes the refreshing of its logo and core values, as well as the launch of a series of teasers and a short film, Operation Maybe, to reinforce its message of aspiration.

“The rebrand has been a reflection of the evolution of our core values over the last 35 years, which now pushes us to be a more innovative company. This has been an extensive exercise of two-and-a-half years in the making, to also look into the other parts of the business such as packaging designs,” brand director Sai Tzy Horng tells The Edge in a Zoom interview. Sai is the son of Su Chin Hock, a former accountant who established the company in 1981 in Alor Gajah, Melaka.

He explains that as the company’s portfolio and stock-keeping units grow, its products are sometimes hard to spot on shelves. “Through consumer research, we learnt that biscuit buyers are ageing and that the younger generation isn’t necessarily consuming biscuits; their parents do, and they snack off their folks’ stash. We want to change that consumption habit as biscuit-eating is a thing of heritage in Malaysia and Singapore, in particular,” explains Sai, stressing that Julie’s rebranding exercise is meant to support the evolution of the brand and that a direct contribution to sales growth is not expected from the ongoing campaign.

Julie’s targeted revenue growth of up to 10% this year takes into account the Conditional Movement Control Order (CMCO) imposed last October and what the coming quarters would likely entail.

Credit reporting agency CTOS’ most recent data shows that Julie’s made a net profit of RM18.2 million for the financial year ended Dec 31, 2019, 147.5% higher than the RM7.4 million posted the year before. Revenue came in at RM326.6 million, up 5.9% from RM308.4 million earlier.

“For 2021, we are looking at a modest expansion to hit about RM340 million in revenue — that’s 5% to 10% higher than 2020, but it is subject to review as the year progresses as these are uncertain times,” Sai says.

Company data also reveals that Julie’s experienced a 391% leap in revenue for the year ended Dec 31, 2018, from 62.7% the year before. When asked, the company declined to comment on the matter.

To reach untapped market segments, the company is targeting the younger generation via a three-pronged approach.

“First, we intend to create occasions and design ways to boost demand for biscuits. For one, Julie’s’ biscuits are typically office snacks. While this may momentarily be a missed opportunity as people are working from home [during the pandemic], in the future, we want to cater to those needs at the office,” Sai explains.

Second, Julie’s will also start producing more flavours to suit palettes within its targeted market segments. “Julie’s has never been one for quick turnover of flavours but we would like to roll out new lines that hit home for the generation of buyers we want to reach,” he says.

Third, Julie’s will explore collaborations such as food pairings with millennials and Gen Z.

As for expansion plans, Sai says the company prefers to tread conservatively so as to not over-splurge, and retain its liquidity for challenging times.

In the near term, the brand will find more way to communicate with its customers via marketing strategies and web content to reach e-commerce platforms. “Admittedly, Julie’s in Malaysia is slow to adapt to the advent of e-commerce. That’s a contrast with China, which is entrenched in it. We want to use this opportunity [of the pandemic] to utilise the e-commerce space, which has grown aggressively in Malaysia in the last two years,” Sai shares.

He says Julie’s has managed to weather MCO 2.0, which began on Jan 13, by moderating its production numbers.

Asked if the company has had to deal with unsold inventories from cancelled orders amid the extension of the MCO 2.0 into the Lunar New Year, he explains that its numbers have not dipped very much and that it is expecting a modest and steady growth in sales.

“When the pandemic hit, we felt the impact on our supply chain. In view of the upcoming festive season, we are making sure that we have sufficient stock to cater to demand,” he notes.

According to Sai, Julie’s is present in over 80 countries, which is short of its target of being in 100 countries by 2020.

“Julie’s has been growing quite rapidly in the export segment. We want to go deeper into some of the established markets, namely Singapore, Taiwan, Thailand and China. The next five years will be about deepening our relationships we have as a brand in those countries, as they are our top export markets.”

He adds that the brand has been in Singapore and Thailand for more than 30 years, and nearly 30 years in Taiwan and China. “When e-commerce took off in China, we began a much bigger expansion into the country.”

Revenue contribution from Julie’s export market has fluctuated between 45% and 55% over the years but has so far held steady throughout the pandemic, Sai says.

Julie’s has a market share of 18% in Malaysia. It has three manufacturing facilities in Alor Gajah with a workforce of about 1,100, comprising office and plant staff.

“Our capacity has nearly doubled with the addition of our third factory,” Sai says, adding that the company does not envision monumental growth but rather, incremental and sustainable progress over the next five years.

“Our primary cause for now is to develop the brand and its base, namely in deepening our ties with our consumers,” he adds, adding that Julie’s does not have plans to list.

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