On the sauce: Kraft-Heinz says post-COVID-19 home cooking trend will drive growth in Malaysia
According to data from Statista, the sauces and condiments market in Malaysia was valued at some RM1.29bn (US$308.8mn) in 2019 – but the general expert opinion is that the recent rise in home cooking as a result of the COVID-19 pandemic outbreak will result in significant growth for this market this year.
“During COVID-19, we are seeing identical trends across the region, whereby more people are staying at home [leading to a] tendency to cook more and [thus look for] inspiration to cook new dishes,” Kraft-Heinz Managing Director of ASEAN, India, HK and APAC Exports Joao Gabriel de Oliveira Leitao told FoodNavigator-Asia.
“As one of the leading brands in sauces, we [acknowledge] that consumers in Malaysia and the region are [looking for] high quality brands that offer not only comfort, but great taste and reliability – [which is why] we believe that sauce brands [in the Kraft-Heinz portfolio] have a strong stance to grow.
“In Malaysia, our key brand is Kicap ABC [which is] made by the first press of selected soy beans. [With this,] we look to guarantee consumers [the sauce they need] to make great tasting meals every day.”
This trend is not just confined to Malaysia but has been observed by Kraft-Heinz in other South East Asian countries as well.
“Another example is in Thailand and here the Heinz Oyster sauce is our stronghold [most popular product],” said Leitao.
“[Many Thai dishes are made using oyster sauce], and as Heinz Oyster is made using real oyster extract, its addition makes for an authentic Thai dish, [hence its popularity] amongst consumers.”
“We have also seen this across the ASEAN region. [Although each country is different, in general] the Heinz Ketchup is our leading brand across the region, trusted sauce since 1869.”
Regional streamlining
Malaysian consumers tend to purchase Kraft-Heinz products, including well-known brands such as Heinz, ABC, HP Sauce, Lea & Perrin’s, Wattie’s and more, from modern trade outlets such as hypermarkets, supermarkets, mini markets and convenience stores, as well as from smaller neighbourhood general trade stores.
These retail outlets number well into the thousands in the country across both East and West Malaysia, and previously Kraft-Heinz had been working with multiple local distributors across its brands – but in order to accelerate brand growth in Malaysia, the firm has opted to completely rehaul its distribution structure in the country.
“[We will be working with market expansion specialist] DKSH as our sole distributor moving forward. This is in order to decrease our operational complexity in Malaysia and improve accessibility [to our products],” said Leitao.
“[DKSH will help us with this] by closing distribution gaps in modern trade and expanding coverage in general trade and food services, [as well as] raising on-shelf availability; [and will also] enable more effective data analysis moving forward].”
Leitao added that there is also a regional strategic motivation to this move, as DKSH is also Kraft-Heinz’s distribution partner in Singapore and Hong Kong.
“Each market has different characteristics in terms of the distribution landscape, and we will have different approaches and strategies for each depending on market dynamics and performance, [but extending the partnership into Malaysia] will enable us to have [streamlined regional] strategic discussions and move more quickly into execution mode, leveraging the scale of our operations,” he said.
