AMID THE CONTINUED PRICE HIKE of flour and other bread ingredients in the market, Gardenia Bakeries Philippines Inc. (GBPI) said sales as of September this year have consistently grown by 30 percent as compared to the same period a year ago.

“Up to this quarter, we are growing 30 percent,” GBPI President and General Manager Simplicio Umali Jr. told the BusinessMirror in an interview during the recent launch of its “Happy Bread Day” event. “We’re hoping to reach our target or we might even exceed our target by end of the year.”

Gardenia’s 2010 net sales stood at P2.5 billion. This year, the bread company hopes to achieve P3.2 billion sales. In 2012, sales growth is targeted to increase by another 20 percent or close to P4 billion.

While year-to-date sales of Gardenia have continued to improve, Umali conceded that profits have suffered due to economic slowdown coupled by the escalating cost of raw materials in making bread.

“Our margins have shrank significantly because of the high price of flour and ingredients,” he said, without citing exact figures.

Over the years, Gardenia’s hold of the local market has strengthened. Based on AC Nielsen’s data in 2010, the company’s share in the total bread market is 67 percent in the supermarket and groceries segment in Metro Manila. Per category, the brand holds 77 percent for white bread, 87 percent for wheat bread and 55 percent for pan de sal.

“If we look at a nationwide basis, because there are many small bakeries all over the country, we think it’s about 55-percent market share in the bread sector, excluding the small community bakeries, which is another type of the market segment. With that, we believe that we’ve already been able to impact on consumers,” Umali said.

60 variants

To date, Gardenia has already produced at least 10 types of loaf bread. It now sells 60 variants in all its outlets nationwide. The regular variants include the classic white bread, wheat bread, flavored bread and pan de sal. The bread line has been expanded also to include healthy snack products.

“So our motivation is to develop more products so we can keep on producing better variants for consumers,” he said. “Actually, we have about six types of bread always ready to be launched in time. We’re just waiting for the right time.”

One of the latest products that Gardenia introduced to the local market is the Wheat Raisin Bread, which is high in fiber and stuffed with raisins that are antioxidants.

“It’s a breakthrough [product] and we were shocked at the sales level. It’s always out of stock. So we’re trying very hard now to increase our output with this product,” Umali said.

Pinoy Tasty

Even in low-cost bread products, he said the company enjoys a good market response as well. Gardenia participated in marketing the Pinoy Tasty—the generic loaf launched by Filipino bakers, flour millers and retailers—which is catered to the mass market. Compared to its regular bread priced at P59.50, Gardenia’s Pinoy Tasty costs P38.50 only at 450 grams.

“We joined together so there can be a standardized loaf with the standard formula using the basic ingredients that is more affordable to the consuming public, especially those who are price-conscious,” Umali said.

Prior to the celebration of World Bread Day last week, Gardenia also led the launching of Pinoy Pandesal, which is priced at P25 per pack of 10 pieces. Each pan de sal costs P2.50 as a maximum price under the standard formula of Pinoy Pandesal. While it’s priced at very low cost using ordinary flour, it is fortified with vitamins. In community bakeries, it can even be priced as low as P2.25 or P2 apiece.

“Do we expect cannibalism to our brand? Definitely,” Umali admits.

Citing market data from AC Nielsen, however, he said that’s “nothing because the market grew.”

As of the first semester this year, the report shows the total market has grown by 10 percent, and the penetration level of Pinoy Tasty is 10 percent of the total market.

“It only means that Pinoy Tasty was the growth of the total market,” Umali explained. “But there are some products that also grew in the process. So in the total market, there could have been a cannibalization of approximately 2 percent. If the market grew by 10 percent, [and] if you’re cannibalized by 2 percent, it’s still okay. You’re still ahead by at least 8 percent. That’s the impact of low price. More and more consumers can now afford to buy bread because of the entry of a low-priced product.”

Giving back

TO share the goodness of bread, Gardenia has committed to provide more than 3,000 loaves of bread to the beneficiaries of Nayon ng Kabataan of the Department of Social Welfare and Development and the Manila Youth Reception Center, in partnership with the K.I.D.S. Foundation.

As part of its corporate social responsibility program, the bread company pledged to give the children of these two charities amounting to more than P165,000 as equivalent to the G-Lock bread tags to be donated by their customers and even participants of their plant tours, especially the youngsters.

“For this year, we chose to do something a little bit different. In commemoration of the World Bread Day, we will just expand our CSR programs a little bit more—and this time, make kids help kids,” Umali said in his keynote speech during the launch of “Happy Bread Day” event at its plant in Laguna.

To join, touring kids and even their accompanying parents can donate the bread tags of the Gardenia breads they will buy at factory prices in the store managed by Tuloy sa Don Bosco Streetchildren Village. Each donated tag to be placed on the “G-Lock Collage” located at the plant’s photo area is equivalent to one bread loaf.

Umali noted that kids not only could help the chosen charities, but also the foundation of Don Bosco because 10 percent of the total income they could generate from selling breads goes to them.

The donation is expected to meet the targeted 3,000 tags since the plant tour usually draws 6,000 to 8,000 students per day.

“Together with Gardenia’s partner-beneficiaries like the K.I.D.S. Foundation, we hope to be able to reach more to a lot more children. And of course help our loyal and generous consumers in their efforts also to share and to show Gardenia’s unwavering commitment to health and nutrition through this campaign,” Umali said.