Fruits in Ice Cream [Singapore]

Ice Cream Craze
By: Anne dela Cruz
Philippine Business Magazine: Volume 11 No.3 - Enterprise
A group of friends finds the right formula for a successful ice cream business

They were at the peak of their careers. Jose Celdran, Rosalinda Custodio, Vivien Ongkiko, and Edgardo Garcia were all executives in the international distribution arm of Magnolia ice cream. But when San Miguel decided to sell Magnolia to Nestle in 1996, the four executives already knew what they wanted to do after their stint in the corporate world.

With a start up capital of P3 million, they founded Food People Inc. in July 1997 and came up with their own brand of ice cream – Fruits in Ice Cream. As its name suggests, Food People wanted to offer premium tropical ice cream to the foreign market.

“While we were still with Magnolia, we were able to get to know a distributor in Japan,” Celdran said. “When we told him about our plan to come up with our own line, he readily agreed to help us.” With limited capital, they looked for a manufacturer who was willing to produce the ice cream in small quantities and found one small factory in Bulacan.

With limited capital, they looked for a manufacturer who was willing to produce the ice cream in small quantities and found one small factory in Bulacan.

With Custodio taking the lead in developing the ice cream flavors, Fruits in Ice Cream came up with their gourmet and premium line. The gourmet flavors are strawberry, raspberry, macapuno, caramelo corn, pastilles, dulce leche, and durian. The premium line flavors are cappuccino, cookies and cream, ube, green tea, halo halo, vanilla, nangkasuy, rocky road, tsokolate, and mango.

Half a gallon of a gourmet flavor costs P220 and the pint size is sold at P65. The premium line of flavors, on the other hand, was going for P200 per half gallon while the pint size was at P60.

The ice cream was a big hit in Japan. Kobo Company Ltd., the exclusive distributor of Fruits In Ice Cream in Japan, has been selling the product in specialty shops in Tokyo, Nagoya, and Osaka. With the initial success, Celdran said they had hoped to bring the product to other Asian countries like Malaysia, Singapore, and Hong Kong. But due to the Asian financial crisis of the period that made it very expensive to export the product, the plan did not push through.

“We were forced to rethink our strategies because if we decided to distribute our ice cream locally, we had to really find our market,” Celdran said. “We had to find our own market, a market that wanted more than Nestle and Selecta but could not afford Haagen Dazs.”

Ditto for Custodio, who had worked at Magnolia's product development department for 17 years; and Garcia who had logged 12 years with SMC's agribusiness division. Two other inactive partners, Rafael Tuason – now deceased – and Cesar Geronimo, round out this unlikely band of ex-SMC "lifers"-turned-entrepreneurs.

In 1998, Food People developed their own home distribution network. They felt that the best way to sell their ice cream locally was through people who were willing to invest in a freezer and to sell Fruits In Ice Cream to their neighbors. Fruits In Ice Cream also managed to find its way to the menus of a number of upscale restaurants and resorts.
“We sold our export overruns to our friends and they liked it so much that they asked us if they could sell the ice cream in their subdivisions,” Celdran said. “They were really among the first ones who became our distributors.”

Ongkiko said they preferred this system because they constantly get feedback from their distributors who are more than willing to go the extra mile so that more and more people can appreciate the product. “You could really count on them to tell you what flavors were doing well, what sort of flavors could be introduced to the market, and how the system could be improved,” she said.

They ruled out early on the possibility of having their products sold in the supermarkets. According to Celdran, the supermarket is not the best place to sell ice cream because it melts even before you have the chance of eating it.

Instead of placing their products side by side with those of their competitors in the supermarkets, Food People decided to put up the first Fruits In Ice Cream scooping station at the Rockwell Power Plant mall in 1999. They were selling their ice cream at P40 to P45 a scoop. The scooping station was so well received that people started asking about franchising opportunities.

It was also this year that shipments of Fruits in Ice Cream (FIC) to the U.S. East Coast started. Distribution of FIC in Hawaii and the U.S. West Coast is handled by BF Imports.

Food People had finally found its niche. They had found a market that was more than willing to shell out a little more so that they could enjoy great tasting ice cream.

“We were able to fill in the gap that the big people left behind,” Celdran said. “There are also studies that people were willing to shell out a little more for ice cream during special occasions like birthdays so that it would be a memorable one and we were able to answer that need.”

Fruits in Ice Cream is just warming up. They are currently working on their own line of sugar free and low fat ice cream, an idea they got from customer feedback. But while they are taking steps to strengthen their distribution network in Metro Manila, they have no immediate plans of bringing the brand outside the metropolis.

“The cost involved in transporting the ice cream to provincial destinations is going to make it a bit expensive,” Ongkiko said. “We are still studying that possibility.”

“Ice cream is a very difficult product to sell because it melts so fast,” Celdran said. “However, it is a product that is difficult to duplicate. So, once you have found the right formula, stay focused and you will succeed in this business.

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