Financial Adviser: 5 Business Lessons Everyone Can Learn from Henry Soesanto, the Man Behind the Success of Monde Nissin
Henry Soesanto is an Indonesian who has already embraced Filipino culture. Here’s the story of how he helped turn Monde Nissin into one of the biggest companies in the country today.
With a market cap of P340 billion, Monde Nissin is now among the top 10 largest companies in the Philippines today. Here are lessons on how the company achieved that feat from its CEO, who is originally from Indonesia but has learned to embrace Filipino culture.
Who is Henry Soesanto
Having lived in the country for 40 years, Henry Soesanto, CEO and co-founder of Monde Nissin, has already embraced the Filipino culture.
Soesanto, who arrived from Indonesia in 1981 to help his father-in-law establish their family business in the Philippines, can already speak fluent Tagalog and looks every inch a Filipino.
His understanding of the Filipino values and tradition has enabled him to build and grow Monde Nissin to become the largest noodle and biscuit manufacturer in the country today.
Through Soesanto’s leadership, Monde Nissin has developed popular household brands over the years that have become market leaders in their categories.
These brands are Lucky Me!, SkyFlakes, Fita, M.Y. San Grahams, Nissin, Mama Sita’s and Dutch Mill.
Early this year, Soesanto carried out the largest fund raising in Philippine history by raising P55.9 billion successfully for Monde Nissin through an initial public offering.
Monde Nissin’ stock price has since increased by 44.4 percent from its IPO price of P13.50 per share to P19.50, as investors’ confidence in the company continues to grow.
At P340 billion market capitalization, Monde Nissin stands among the top 10 largest companies in the Philippines today.
It also made Soesanto the 25th richest man in the country this year, according to the most recent rankings by Forbes.
How did Soesanto transform Monde Nissin from a market challenger to a market leader in the highly competitive food and beverage market? What success lessons can we learn from Soesanto’s vision and strategies?
Here are the five business lessons every entrepreneur can learn from Monde Nissin’s CEO and Co-founder, Henry Soesanto:
1| Identify customer pain points to build market share
When Monde Nissin wanted to enter the noodle market in the 1980s, it was not easy for the company to compete because the market was already dominated by two well-established brands, Maggi and Nissin Ramen.
But Soesanto was not discouraged. Instead of competing head on, he developed a new product category, the instant pancit canton, which became number one in the market.
“We always look at the areas that our competitors are not doing yet,” Soesanto says. “We like blue ocean market. We don’t like red ocean kasi madugo yan at patayan.
“When we were looking to develop a new product, we have observed through our consumer insights that pancit canton has been a popular dish of Filipinos. People consumed more pancit canton than any noodle, so sabi ko puede tayo maglabas ng pancit canton na instant.
“We believed it was something we could win. When we marketed it, we used a male talent with tagline “Yakang-yaka,” to show that even men can make pancit canton. It became the most popular (brand) in the noodle category and launched the “Lucky Me!” brand.”
“Today, pancit canton is bigger than the soup type instant noodle. In 20 years, we were able to capture the market. Nawala na yung competitor namin. We now control 70 percent market share.”
2| Identify ways to improve and strengthen market share
A market leader doesn’t always stay at the top.
Soesanto knew that he needed to take measures to defend his brand by continuously improving his products.
Just like a medieval castle, a business that innovates to increase its competitive advantage to protect its long-term profits needs to build a deep and wide trench to protect its fortress from outsiders.
“We look at ourselves as our own enemy,” Soesanto says. “Every day you have to beat yourself. Of course, we also look at our competitors, pero hindi yan ang focus. In fact, we always tell ourselves, paano mo ma-improve sarili produkto mo? Paano mo tanungin consumers mo?
“We are dominant market leader in noodles. Our brand is the most popular in the whole FMCG (fast-moving consumer goods) category. The popularity of Lucky Me! is better than Coke (Coca-Cola). It has been there for five consecutive years according to a UK global research agency.
“But we still have a lot of things to improve. We have to pinpoint why the market consumes only 37 packs per year per person, which is less than one in a week, and why a certain segment of the consumers ayaw talaga.
“Sagutin natin, kasi maraming salt, maraming MSG. Alam mo ba yung noodles namin 20 percent oil compared to potato chips which has 30 percent. We have technology today that can reduce oil by 70 percent without affecting the taste.
This is the technology that is first in the world. Ganun kami mag-compete, we innovate. Yung noodles namin ngayon air-fried na. We use air-fryer technology for our noodles.
“Next is paano mo tanggalin yung MSG? Paano mo bawasan yung salt pero masarap pa rin? MSG is the most efficient way of enhancing the taste, konti lang ilagay masarap na yung food mo, pag tinanggal mo yan you have to replace it with something natural, but higher price. That’s the way we premium-ize our product.
“You see Filipino market consumes six packs only per year compared to Indonesia, 50 packs, kaya pwede pa. That is the way we look at the market. There is a potential for growth but you really have to fix it.”
3| Identify opportunities to create new growth platform
In 2015, Monde Nissin acquired a 100-percent stake in Marlow Food Limited based in United Kingdom for P40.9 billion, one of the largest manufacturers of meat alternative products in the world.
Marlow owns the brand Quorn Foods, which is the market leader in meat alternatives in the U.K., with 28 percent market share.
Soesanto made the strategic investment in the belief that demand for alternative meat will increase in the future.
“Monde Nissin has evolved in terms of purpose and aspiration,” Soesanto says. “As a food company we understand that the impact of the food we produce, and you consume, affects not only our health but also our environment. Our aspiration is to improve the well-being of people and the planet by finding a sustainable solution.
“About five years ago, nakita natin yung isang opportunity sa UK, eto yung alternative protein company. Yung ibang companies gumagamit pa rin ng soy, so you still have to plant soy then extract the protein to make plant-based protein. In our case, hindi, we literally produce protein through process of fermentation.
“Kami lang ang meron sa buong mundo that is the most sustainable. Ang resulta ng protein doon ay complete essential amino acid and then because, it is biomass, it also has the fiber. So protein and fiber.
“Hindi pa natin pinapansin itong area. Biro mo, animal farming is not 100 perent efficient, lalo na if you raise chicken or cow, para later on i-consume mo yung meat. The cow needs to eat, that’s the food that we consume also. They eat soy, corn, wheat; nagiging animal feed yun eh.
“When they eat, they eat a lot, and magiging protein yung meat nila so that we can consume the meat. This is not 100 percent efficient, because they consume so much water to grow the soy corn and wheat.
“They also need so much land. They have to cut the forest, too. Every second as we speak now, how many acres of the rainforest are being converted to crop for animal food? Kaya nawawala yung rainforest.”
4| Identify the future of the company by creating a strong vision for growth
Having a vision provides a a sense of purpose and direction for the business.
When Soesanto made the decision to invest in alternative meat business, he had a vision of what he wanted to achieve.
His enthusiasm and passion to advocate alternative meat consumption helped unify everyone in the company to work toward a common goal.
“We need to build our capacity in advance, kaya nag-IPO tayo,” he says. “The market is going to explode. Ayaw mong maiwan. You should grow at the same pace by investing. The food industry needs to change because it is not sustainable.
“We have to change the way we consume food. People are usually (intimidated) by the word sustainability. Sustainability has got to be better. Look at Tesla. Bakit bumenta siya? Is it because it is an electric car? It is because it is better than a fuel combustion car. Mas mabilis siya tumakbo. Mas sexy ang itsura. You know you can change the chassis and everything. You can make it light. That is what they are selling.
“The same thing also for food. Gagastusan namin to make it better. Improve namin yung R&D para yung alternative protein meat mas masarap, mas healthy. Ganun ang vision namin, mahaba ang runway sa harap. Marami pang gagawin.
5| Identify the right people to support the company achieve its strategic goals
There is a familiar saying that a company is only as good as its people.
A business can have a great strategy, marketing plan and operational process; but it takes the right people in the organization to execute all the plans to make it successful.
Soesanto believes that hiring the right people is essential to the success of a business.
“People execute our strategy so we have to be able to attract talents, especially talent na bilib sa aspiration namin,” Soesanto says. “ The type of people who want to make sense and find meaning in life. Hindi yung every month nage-expect lang ng sweldo.
“We need people yung magkekwento sa anak niya, ‘Para sa inyo ito. I am working for your future. Hindi namin sisirain ang environment.’ May meaning yung trabaho. May purpose. That’s what we need when we recruit top talent who will help execute our plans.
“Dapat yung mga tao mo talagang mahusay, otherwise everything is just kwento lang. When we hire top managers, ako nagi-interview din because it has to align with the aspiration. Hindi yung suweldo lang inaantay.
“Wala rin family member dito sa loob ng company. Ako policy ko yan. If I will choose among 20 family members against tens of thousands of people na pwede mong piliin, I will opt to choose the best from these tens of thousands of people instead of one out of 20 people only.”
Henry Ong, RFP, is an entrepreneur, financial planning advocate and business advisor. Email Henry for business advice [email protected] or follow him on Twitter @henryong888