Magnum ice cream sales 'spectacular': RFM

RFM profit surges 30% to P130 million in first quarter

MANILA, Philippines - Sales of Magnum ice cream have been "spectacular" since it debuted in March, according to RFM Corp. whose Selecta joint venture with Unilever introduced the premium ice cream brand to the Philippines.

This comes as the Concepcion-led food and beverage company on Monday reported 30% jump in net income to P130.3 million in the first quarter of 2012. This was better than RFM's net income of P100.1 million in same period last year.

RFM attributed improvements in profit to higher sales revenues and easing of prices of commodities such as milk and sugar. The rationalization of production processes and focus on higher-marging products also contributed to the higher net income.

RFM reported P2.4 billion in sales in the January to March period, 16% higher than the previous year.

Selecta, RFM's joint venture with Unilever, saw a "spectacular" sales growth of 37% in the first quarter.

RFM president and CEO Jose A. Concepcion III said the sales of Selecta soared in March, when Magnum was introduced in the Philippine market.

"The rate would even be higher if we look at March alone year-on-year, since it was the month we launched the latest ice cream craze Magnum (Belgian chocolate enrobed ice cream on a stick)," he said.

He added demand for Magnum has been "way beyond expectation", and stocks have been running out.

Magnum created a lot of buzz in social media when it first launched, thanks to its brand ambassadors, stylist Liz Uy, actress Solenn Heussaff, magazine editor Raymond Gutierrez and designer Rajo Laurel.  The premium ice cream brand comes in three flavors: vanilla, almond and chocolate truffle, and priced between P50 to P60 a piece.

Selecta's Cornetto ice cream products have been doing well, with 50% to 60% sales growth in the first quarter.

Aside from ice cream, RFM saw strong performance from its Fiesta pasta business with 70% growth. Concepcion said Fiesta pasta, which offers affordable prices, now has 30% market leadership.

Other White King brands of cake mixes, Arroz Caldo and Champorado have also shown sustained sales momentum, 30% year-to-date growth.

"We believe that stronger brand equity and product innovations have influenced the shift in buying pattern and frequency in a number of categories we participate in. As we become the market leaders in these categories, we are increasing the frequency of consumption and growing the size of the market," Concepcion said.

Sales of Selecta milk, Sunkist litro pack, Swift Mighty Meaty and Corned Beef Swak also performed well in the first quarter of 2012. The company attributed the sales performance to product repackaging, aggressive merchandising and other trade-related programs.

Reaction:

I have read some reviews about the Magnum Ice Cream and it contains some positive and as well as negative feedbacks. Well, of course people have different tastes.

The merging of Selecta and Unilever made a huge advantage in the field of economy in the Philippines. Thanks to Magnum. The high price of this product has also benefits because it rose the economic growth of Philippines. But the questions arose regarding the status symbol of Magnum. Right now, do people really buy it for its taste or fad for its price? This is a free country, a free economy.  Companies present consumers with options. it is the buyers who decide where to put their money. They may patronize a product for its taste, for the trustworthiness of its manufacturer, for its exclusivity.

Certainly, P55 (P50 in malls) is a big deal for millions of Filipinos. Did not protesters, just two weeks ago, take to the streets to protest the rising prices of oil? Did not students and lowly employees complain about the just-imposed 50-centavo increase in the minimum fare for jeepneys?  This, not so much the calories, is what makes Magnum a guilty pleasure.

If my neighbor feels entitled to this pleasure, let him be. After all, who is eventually going to suffer from her imprudent financial decisions? Who will have less funds for good books or savings or other more meaningful purchases?

Farmers' Group Raps NFA Head on Rice Import Move

   

   Romeo David, the newly appointed administrator of the National Food Authority (NFA), incurred the ire of a major farmers' group last week when he announced that the government was determined to import 200,000 to 300,000 to tons of rice from Indonesian to meet an expected shortage.

   In a press release, David stressed that the NFA would be making a lot of money in the deal, which, he said, would involve no cash outlay in NFA's part.

   But the major farmers' organizations in the country are now saying that David could not have picked a worse time to make the announcement, just when the country's three million Filipino farmers are beginning to harvest their crops.

   The immediate effect of his press release: Palay price all over the country have plunged to the great disadvantage of the rice farmers.

   Organized rice farmers, led by the militant Kilusang Magbubukid sa Pilipinas (KMP), have already aired fears that palay prices may again nosedive to P2.80 a kilo or almost one-third the price of animal feeds.

   Their fears are anchored on the fact that NFA does not have the cash to buy at least five percent of this cropping season's yield and prevent traders from offering bottom prices.

   "Instead of helping the farmers, David showed his ignorance of rice culture and a bias against the very people he is supposed to serve," the KMP said.

   Projections by the Department of Agriculture of an impending rice shortage could only be viewed with suspicion. Data from the Bureau of Agricultural Statistics prove that a local rice shortage is remote.

   

   Land planted with rice has been estimated at 4.5 million hectares, yielding an average of 60 cavans per hectares. During the main cropping season, total harvest is 27 million cavans.

   Half of the rice lands irrigated and farmed two or three times a year. That would yield at east 60 million or more bags of rice farmers produce no less than 200 million cavans of rice a year.

   Each Filipino eats two cavans of rice or 100 kilos a year. With 60 million mouths to feed, a year's harvest is still  80 million cavans more than actual needs.

    So why the need to import?

   The Agriculture Journalists Association of the Philippines has come out with a position paper, urging the Ramos government into reversing a prevalent anti-farmer bias of government policies on agriculture.

Central to this bias has been government control of palay and rice prices through an illusory subsidy. NFA has set P6.00 a kilo as its subsidized price for palay but has no money to buy at that price.

   What the traders have been doing was the use of the NFA price as ceiling. They only offer the same price during the months of August and September when most of the farmers' harvests are already in the traders' warehouses.

   At the height of the harvest season, the traders bring down prices even lower than the break-even cost of producing the cereal at P4.50 a kilo. (MNC)

Source: Business Section, Manila Standard, (Oct. 19, 1992)

Reaction:

   This article is somehow doubtful to think that David, expecting a rice shortage in the near future, will import rice from Indonesia. The Filipino farmers have been used with their daily routine which is "plant, harvest, sell." What will the farmers do to their harvested crops when the imported ones will come? Also, to think that David is the newly-appointed NFA administrator, he should support his fellow countrymen.

   So, when the imported rice takes its toll which will be sold at a cheap price, the Filipino farmers wouldn't have any other choice but to lower their price too because they will think that they are incompetent because people might probably buy the imported ones. David should think about the pros and cons before doing so to avoid depletion in Philippines economy. If I were to put in the farmers' shoes, I would also be mad because all the sweat and effort that I have poured in will be gone to waste. Having this dilemma, decision-making and critical thinking are really needed. He should think about efficiency and inefficiency. 

   The farmers now, who are facing this problem, will lose their profit and if it decreases, what will probably happen? There is a probability that they will probably lose their appetite in implantation. Thus, making the economic prosperity slow down too because our economy also depends on our own products that will be sold.

   In a buyer's perspective, since we are living in a poverty-stricken country, will buy the cheaper ones which are the farmers' harvest. If many will buy the cheaper one, NFA will reach the stage of what we call "surplus." So, all the prices of both sides will get cheaper and cheaper until the price reaches to the zero line. 

   So there is a great deal about the sellers' and consumers' perspective. Still, in the end, Filipinos will suffer this problem.