SAN MIGUEL PURE FOODS CO INC IN PACKAGED FOOD (PHILIPPINES)

Euromonitor International

April 2015

S A N M I G U E L P U R E F O O D S C O I N C I N P A C K A G E D F O O D ( P H I L I P P I N E S ) P a s s p o r t I

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LIST OF CONTENTS AND TABLES

Strategic Direction ........................................................................................................................ 1 Key Facts ..................................................................................................................................... 1

Summary 1 San Miguel Pure Foods Co Inc: Key Facts ................................................... 1

Company Background .................................................................................................................. 1 Production .................................................................................................................................... 2 Competitive Positioning ................................................................................................................ 2

Summary 2 San Miguel Pure Foods Co Inc: Competitive Position 2014 ......................... 2

S A N M I G U E L P U R E F O O D S C O I N C I N P A C K A G E D F O O D ( P H I L I P P I N E S ) P a s s p o r t 1

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SAN MIGUEL PURE FOODS CO INC

STRATEGIC DIRECTION San Miguel Pure Foods Co Inc will continue to be a major influence on Philippine packaged

food. Its ability to maintain its strength among international competition continues to be driven

by aggressive advertising and competitive pricing strategies. San Miguel Pure Foods Co Inc

will continue to grow in strength as a significant local player.

KEY FACTS

Summary 1 San Miguel Pure Foods Co Inc: Key Facts

Full name of company: San Miguel Pure Foods Co Inc

Address: JMT Corporate Condominium ADB Avenue, Ortigas Center, Pasig City, Philippines

Tel: +63 (2) 702 5000

Fax: +63 (2) 702 5000

www: www.sanmiguelpurefoods.com

Activities: Manufacturer of packaged food

Source: Euromonitor International from company reports, company research, trade press, trade sources

COMPANY BACKGROUND A wholly-owned subsidiary of San Miguel Corp, San Miguel Pure Foods Co Inc is the fusion in

2011 of the two largest food manufacturers in the Philippines – San Miguel Foods Group and

Purefoods Corporation. San Miguel Foods Group had interests in feeds, livestock, poultry,

dairy products, fresh and processed meat and agriculture, Purefoods Corp focused on meat

products such as ham, bacon and sausages.

San Miguel Pure Foods Inc is a major player in various categories, including but not limited to

oils and fats, dairy, ice cream and spreads through brands such as Magnolia, Star, Baker’s

Best, Dari Creme, JellYace and more. It also has the San Miguel brand of coffee, a joint

venture with foreign players, as well as packaged food brands for consumer foodservice and

Great Food Solutions for institutional buyers.

Other interests of San Miguel Pure Foods Inc include the production of flour and consumer

foodservice chains Hungry Juan, Smokeys and Purefoods Tender Juicy Hotdog. Through its

Monterey Meatshops and Magnolia Chicken Stations, San Miguel Pure Foods Inc competes

in retailing through the sale of fresh meat. Its purchase of Petron petrol stations led it to

venture into forecourt retailing as well. The company also operates in Indonesia and Vietnam.

San Miguel Pure Foods Inc continued to be a significant competitor to both local and

multinational brands. Its pricing strategies allow its products to be available to a variety of

customers, including middle- and lower-income consumers. It continues to innovate as

evident in the increasing flavours of its product lines, such as its growing ice cream product

line with the addition of popular local flavours in the “Best of the Philippines” line. The addition

of these Filipino flavours attracted not just locals but tourists as well. Advertising efforts are

continuously strengthened to maintain and further build their brands.

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As an established and trusted company, San Miguel Pure Foods Inc also benefits from its

wide network of distributors nationwide, extending through various retail channels from

neighbourhood sari-sari stores, leading supermarkets and hypermarkets and more.

PRODUCTION San Miguel Pure Foods Inc has manufacturing facilities in the Philippines, but also exports

certain products to support international operations in Indonesia and Vietnam. San Mig coffee

products for example are imported from Singapore.

COMPETITIVE POSITIONING San Miguel Pure Foods Co Inc ranked ninth overall in Packaged Food for 2014. Its growing

strength also as a major player in many packaged food categories helped it maintain its

strength in the Philippines. A leader in many categories, San Miguel Pure Foods Co Inc was

able to maintain its position as a trusted brand. While share may have very marginally

declined from 2013 due mainly to strengthening competition from other leading players, San

Miguel Pure Foods Co was able to maintain its rank at ninth.

Competing in various categories and given its large scale and influence, it is able to innovate

in categories where it leads. With the advantage of being able to effectively offer products at

attractive prices due to its economies of scale, innovation is a key factor in these categories

such as cheese, margarine and ice cream, especially in terms of flavour.

San Miguel Pure Foods Co Inc generally focuses on the products of strength which it already

has advantage over. Its strong presence in these areas allows it to maintain its influence on

overall packaged food. With its product offerings such as margarine and cheese generally in

the more mature, less dynamic areas of the market, while still possible, room for innovation

remains limited.

The influence of San Miguel Pure Foods Co Inc, coupled with its presence in various sectors

allows it to tap into different markets, depending on the product as well. For example, when it

comes to margarine, with its brands Star, Dari Creme and Buttercup, San Miguel Pure Foods

Co Inc is able to target different ends of the market from lower to higher end consumers.

Summary 2 San Miguel Pure Foods Co Inc: Competitive Position 2014

Product type Retail value share Rank

Packaged food 2.3% 9

Dairy 4.2% 6

Spreads 2.6% 10

Ice cream 8.9% 3

Oils and fats 13.1% 3

Sauces, dressings and condiments

0.0% 29

Source: Euromonitor International from company reports, company research, trade press, trade sources, trade interviews