A 50-year journey full of passion and dedication : Munchee sees big growth in food business | Sunday Observer

A 50-year journey full of passion and dedication : Munchee sees big growth in food business

22 July, 2018
CBL’s bee keepers of Uva Province
CBL’s bee keepers of Uva Province

The CBL Group, best known for its Munchee brand, is not just a biscuit company. The group works closely with farmers and believes adding value to agricultural products is the way to make farming sustainable and is a ‘low hanging fruit’ given changing consumption trends and growing demand for convenient, yet nutritious food products.

One idea is developing a crop exchange, putting farmers in direct contact with buyers. CBL has recently partnered with SPAR, one of South Africa’s largest retailers, to develop independently owned modern retail outlets.

The company which completed 50 years in business this month will focus on sustainable farming with crops that add value to society, which is a priority, says Group Managing Director, Shea Wickramasingha.

In an interview with the Business Observer she said, “A robust SME food industry will ensure a thriving supply chain. CBL is already way ahead on this but this needs to be a national initiative with much greater participation.”

Excerpts of the interview:

Q: How do you describe the long journey of Munchee over the last five decades?

A: It has been a journey full of passion to create. Starting from the creation of a high protein biscuit for school children the CBL Group has been in the forefront of development in the food space.

When it comes to biscuits the innovation in the country is very apparent from unique products like Hawaian cookies developed in the early 70s to the potato cracker developed last year.

We have also done research and developed functional biscuits such as Kothalahimbutu crackers. We changed the chocolate market from our entry in 1991 to introduce a huge variety of products all manufactured in Sri Lanka.

Lanka soy leads the soya market with innovation year after year. Very few people know we are the largest exporter of value added organic fruit.

Samaposha is a brand that is a market leader in the cereal category with all the raw materials produced in Sri Lanka. Most recently we launched Sera coconut milk which has two ingredients, coconut and water. The only coconut milk that has no other ingredients added. We keep looking at consumer needs and develop products that add value.

Q: As an organisation how have you evolved, what have you done differently?

A: We have evolved from a family led company to a professionally managed organisation. One thing that has not changed is - our CBL family is at the heart of everything we do.

We are very proud of our Sri Lankan heritage and strive to add value to the country as whole in everything we do. Our strategies have never been short term.

We create products that meet the needs of our consumers. We are in a world that is evolving very fast and consumers’ needs change. We strive to add value to Sri Lankan agriculture and simultaneously make exciting nutritious and delicious products.

Q: What are your immediate plans for the future growth?

Robotic packaging system

A: We have many plans going forward. Having gained market leadership in Munchee, Ritzbury, Lanka Soy, Samaposha and Tiara in Sri Lanka we will be looking to forge ahead with some of these brands in our neighbouring markets.

We already have a manufacturing operation in Bangladesh and are the market leaders in the Maldives with Munchee and Ritzbury. It was very rewarding to hear a Maldivian recently saying he grew up on Munchee Tikiri Marie.

Sera is our coconut milk brand which is made with natural coconut and water. We recently formed a joint venture partnership with SPAR South Africa to build infrastructure in the retail trade to enable independent supermarket owners to compete alongside with corporate chains.

This will strengthen the Sri Lankan SME retail sector giving greater opportunities for the locals to thrive in the retail market.

Q: How do you expect the consumption patterns to change in the next five years?

A: Consumers are looking for convenient, less processed products with functional ingredients. People are more health conscious and will look for food products that fit their life style and nutritional needs. People have to eat so I don’t expect consumption as a whole to change but believe the type of food product consumed will.

Q: What strategies will the company adopt to meet these changing demands?

A: We are constantly looking at changing consumer trends to identify needs and gaps and have been very successful in identifying new products. We invest heavily in market research to understand the modern consumers’ needs.

All our brands have an array of products in their portfolio that cater to changing needs. Munchee has a huge range of crackers apart from Super Cream Cracker there is Kurakkan crackers, Bran crackers, Karapincha crackers, a variety of rice crackers and Kothalahimbutu crackers. Kothalahimbutu crackers have gone through clinical trials where results show when used by diabetic patients as a supplement it has significantly lowered blood sugar readings.

We are also endorsed by an independent lab in Singapore to claim the product as being low glycemic. Lanka soy has a huge product portfolio that caters to both vegetarian and non vegetarian consumers.

We strive to incorporate local raw material and add value to the same like our Soy Polos curry. Samaposha is a brand that manufactures cereal products using only local grains.

We have added new variants using Kurakkan and oats which are now processed in Sri Lanka. We are also involved in the supply chain to increase coconut yields per acre for greater productivity.

We also encourageg land owners to do a second crop with coconut. We are probably the largest exporter of organic pineapple in the country. We promote organic cultivation not only for pineapple but for a variety of fruit products in order to give a stable buy back guarantee to the farmers.

Q: What are the biggest segments that you want to concentrate on in the future?

A: I believe all our segments have huge growth potential both in Sri Lanka and overseas markets. We are actively trying to make agriculture a more viable prospect in Sri Lanka by focusing on productivity.

We believe it’s a low hanging fruit for Sri Lanka and value addition to give a guaranteed price to farmers is a must for both development of the local food industry and for Sri Lanka’s food security. We need to see a healthy growth in the SME food sector.

This is how categories grow overall. Unknown to most there are over 50 biscuits companies that operate in Sri Lanka. The SME sector is a vital part of economic growth and for greater development of the country this sector needs to be nurtured.

Sustainable farming with crops that add value to our society should be give priority. A robust SME food industry will ensure a thriving supply chain. CBL is already way ahead on this but this needs to be a national initiative with much greater participation.

Q: How would technological changes such as artificial intelligence (AI) and robotics affect your production plants?

A: Already we have problems in finding people to come and work in factories. We currently provide employment to over 6,000 people directly. We have already developed in-house robotic packaging systems.

We see our workforce being more technically skilled and have started the change. We are using IT platforms in all our business processes from ERP to business intelligence in sales. Our world today is about using data to make better informed decisions.

One of our companies was the victim of cyber crime recently and cyber security is going to be an important focus as our dependence on the internet increases for our business processes.

In traditional skills such as coconut shelling and paring we are introducing machines as people are no longer willing to apprentice in acquiring those skills. We see AI being used in all spheres of agriculture and manufacture in the coming years.

Q: Tell us about the supply chain? How does it work? Who is involved in it?

A: We have divided our food business in to three clusters - confectionery, food and natural. Each cluster has a strong supply chain function with a huge focus on developing local agriculture.

We work with over 12,000 farmers in Sri Lanka to grow soya, corn, rice, kurankkan, mung beans, peanuts, coconuts, pineapple, papaya, passion fruit, jak fruit, pepper, turmeric, ginger and a variety of other spices. We keep expanding this portfolio as one of the key objectives is to develop and add value to the supply chain.

Q: How does it contribute to the growth of the rural economy?

A: When we work with farmers we contribute to the rural economy. We give them guaranteed buy back with a minimum price and if market prices go up we buy at the market price. Take our peanut growing as an example.

We used to import all our peanuts as the quality of Sri Lankan peanuts was poor due to poor post harvest practices. We now use over 10 tonnes of peanuts in our factories and also supply many others in our industry.

We have educated and uplifted the supply chain in this instance. Likewise we are working to increase the yields of many of the crops we buy.

We are great proponents of sustainable farming and are constantly educating farmers on reducing their dependence on agro chemicals. In our soya cultivation we have stopped using chemical fertilizer without a loss of yield.

We are also developing organic compost by collecting all our bio waste which we would make available to our farmers. We are adding value to our farmers’ crop by making it more sustainable and increasing yields which mean higher incomes to the farmer community.

We are contributing by giving agriculture inputs, extension service and most importantly a market. Another example is a bee honey project. Bees are an important part of sustainable growing as they are needed for pollination.

There is an alarming decrease in the bee population attributed to many reasons including the use of agro chemicals and electronic devices. We took the challenge to increase bee honey production in Sri Lanka and simultaneously increase the income of rural communities.

We encouraged bee keeping in back gardens. We worked with the UNDP and IFAD to provide households with simple apparatus to separate the honey and we have seen 300 kg collected annually over past few years grow to 8 MT this year.

We started with 50 bee keepers and now our project has over 600 bee keepers. We give a guaranteed buy back of all the honey which is sold at most supermarkets under the brand Cecil.

This is honey made from the nectar of flowers growing wild in the Uva province. We have added greater value by also cultivating medicinal garlic, an endemic variety cherished by the rural folk. Honey and this endemic garlic are used in the manufacture of garlic cured in honey which is an ancient ayurvedic preparation.

Q: What challenges do you expect in the supply chain in the future given issues such as water scarcity?

A: The past two years have seen huge challenges. Countries such as Israel that have no water have overcome these issues. Sri Lanka has much more resources so there is no reason why we can’t come up with solutions for greater stability.

This must be a national priority and small land owners must be given the means to invest in drip irrigation systems and water conservation methods.

Financial institutions should spearhead this with working with the private sector and the farmers to create a sustainable model. Going forward AI will be an instrument to increase productivity of the land.

While this technology may not be within the grasp of many small land owners this is the future. We must think outside the box. Being an island surrounded by sea water can we develop plants to grow in brackish water for example.

I also feel developing a crop exchange where by putting farmers in direct contact with end buyers would be more sustainable as the farmer will have a much larger selling ability.

Also they can have a platform to plan what they need to grow when there is interaction with the final customer.

Today sadly there is no planning and while the cities have ballooning vegetable prices farmers are destroying their bumper harvest with prices being offered that are less than cost of production.

Q: Can you give us a few examples of your fast and agile work culture?

A: I believe the innovation we come out with is an example of agility. We are nurturing a culture of inclusivity and we see contribution to our business sustainability projects come from all categories of employees giving shop floor solutions to complex IT solutions.

We designed and developed robotic systems for packing. We have increased efficiency in many of our plants through suggestions made by our workforce. We are one team and we all work to one objective.

Q: What’s going to be your growth mantra in the coming years?

A: Our mantra is to care about everyone and everything our organisation touches; this yields sustainable growth. It is a pun on our beginning where our business started with the manufacture of high protein care biscuits. We embrace caring of all our stakeholders, the environment and our beautiful country.