Good value for good ice cream (The Food People, Inc.) By: Cathy Rose A. Garcia 5/7/02 Ice cream afficionados in the country have often complained of the lack of high-quality locally made ice cream comparable to foreign brands like Baskin Robbins or Haagen Dazs. But true ice cream lovers in the metropolis have found the next best thing in Fruits in Ice Cream (FIC) a light, creamy, low-fat dessert with real fruits. What most people don't know is that FIC is a local brand from a little-known company called The Food People Inc. (TFPI). TFPI may be a relative newcomer in the ice cream business, having a little more than four years under its belt. But make no mistake, the company backed by people with more than two decades of experience in the local and international ice cream business. Entrepreneurs Jose Ma. Celdran, Edgardo Garcia, Rosalinda Custodio, Vivien Tansingco-Ongkiko, describe themselves as "victims of globalization." All four were key managers at San Miguel Corp.'s Magnolia international unit, until Swiss giant Nestle Corp. acquired a stake in Magnolia in 1995. Eventually, Nestle closed down Magnolia's international operations in 1996. Mr. Celdran, TFPI head of sales and business development, said the idea to form their own ice cream company was hatched at a time when they were trying to convince Nestle to continue Magnolia's international operations. "Our business manager asked us if we were doing this because we wanted to survive as a group? Or if this was our business, would we still do it? Would we still have the confidence to do it? We thought long and hard about it, then we said yes, we really see a potential in what we are doing," he said. Pooling together their retirement and separation benefits from Magnolia, they formed TFPI in July 1997 with P3 million in capital. It was probably not the best time to start a business, as Asian countries were starting to experience a financial meltdown. Despite the uncertain economic conditions, TFPI sought to fill the gap in the foreign ice cream market left by Magnolia in Southeast Asia, United States and Japan. The Philippines, Mr. Celdran said, is positioned to meet the demand for high quality tropical fruit-flavored ice cream. "Some of the buyers in Japan, US and Singapore said they were not buying from Magnolia because of the brand, but because of the positioning of the product. We have the technology to make good fruit-flavored ice cream," he said. TFPI was formed to develop, research, market and sell the product, but the actual production of ice cream was contracted out to toll manufacturers. The company even tapped the services of Nestle's provincial plants to manufacture FIC. Mr. Celdran said the company opted for toll manufacturing so they would be ensured of having efficient and high-quality production and no labor problems. With the eye on the foreign market, the company sought to make ice cream based on international standards in terms of quality and flavor. Ms. Custodio, who is in charge of research and development of ice cream, said the company employs strict quality control microbiological standards for FIC. The standards are even more stringent than the ones imposed by the Bureau of Food and Drug and even the United States Department of Agriculture. Ms. Custodio explained the company uses real fruits in its ice cream and 100% milk-derived fat, unlike other brands which use cheap vegetable fats. This gives FIC the smoother texture and richer flavor, unlike the cloying synthetic sweetness of mass-market ice cream. At the start, TFPI decided to go for distinctive fruit flavors like mango, ube (purple yam), macapuno (coconut sport), halo-halo, nangkasuy (jackfruit and cashew nut) and kamote (sweet potato), which are not offered by other foreign brands. They achieved success in tempting the gourmet taste buds of the Japanese market, as FIC is now sold in Tokyo, Nagoya, Osaka and Okinawa, offered by the exclusive Matsuzakaya stores. In the Japan Airlines mail order catalog, a half-gallon of FIC is being sold for Y4,300, or around P1,700 or $30. Also, FIC is being sold by distributors in Hawaii and San Francisco in the US.

TFPI's foray into neighboring Southeast Asian countries Singapore, Brunei, Malaysia, and even in Hong Kong and China was hampered by the lack of partners and efficient toll manufacturers. "We started with exports, but it was difficult since we could not control many factors in distribution. So we decided to focus more on the local market," Mr. Celdran said. TFPI is determined to break into the local market dominated by mass-market brands like Nestle, Presto and Selecta, by taking a different approach. Ms. Tansingco-Ongkiko, head of marketing, said the company does not want to directly compete with the big ice cream companies in terms of price since FIC ice cream is sold slightly higher. A half-gallon of the FIC ranges from P190 to P210, as compared to a half-gallon of Nestle which costs P130-150. "Our positioning is that we are THE ice cream for ice cream lovers. This is not for those who would just take in ice cream for those who want something cold. It's something for those who want to appreciate something different... Our prices are between the local and imported brands. What we are saying is that for just a small price differential, people can buy high-quality locally made ice cream," Ms. Tansingco-Ongkiko said. FIC now has 14 flavors, with ube and macapuno as the popular flavors among the older crowd. Ms. Tansingco-Ongkiko noted that the younger crowd likes newer flavors like green tea, cappucino, rocky road and cookies and cream. To make sure their market does not tire of the flavors easily, TFPI brings out limited edition flavors like choco cherrific (chocolate ice cream with cherry ripple and brandy), vanilla decadence (vanilla ice cream with brownies, Toblerone bits and chocolate chips), hazelnut crumble (hazelnut ice cream with chocolate cookies), dulce leche (caramel ice cream with leche flan bits) and raspberry (with real raspberry bits). FIC is mostly sold by home distributors in exclusive villages in Quezon City, Makati City, Muntinlupa, Pasig and San Juan, as well as Shoppersville and Rustan's supermarket in Katipunan and Shopwise in Libis. FIC is also being served in Manila Polo Club, Tagaytay Highlands and restaurants like California Pizza Kitchen, Tequila Joe's, Coffee California, Matti's, Portico and Kimpura. (A list of distributors can be found on the website www.foodpeople.com.ph) Meanwhile, TFPI hopes to attract new investors in the ice cream production business both domestically and internationally. Recently, the company bought an existing manufacturing plant in Guiguinto, Bulacan in preparation for intensified operations once the economy gains momentum. Mr. Celdran said the company is also working on issuing franchises for FIC scooping stations in various supermarkets and malls, to increase awareness of the product and boost sales. Within the next five years, Mr. Celdran sees the company as having quadrupled its sales and established its availability in key cities nationwide. TFPI hopes to have expanded its distribution to key cities in the United States, Canada and China. Whatever the future brings, Mr. Celdran said TFPI remains committed to serving good old fashioned ice cream to the people. "We will stick to high-quality products. The vision of the company is to come out with good ice cream and good value, back to what people had before... We're sticking to the basics," he said. All Rights Reserved - BusinessWorld Publishing Corporation < more Reviews >