Investing to Win- Rahul Colaco, MD/CEO Friesland Campina Wamco

It’s an exciting time for Rahul Colaco. The year 2015 was a year of good bottom line performance for the company he leads – FrieslandCampina Wamco – Nigeria’s dairy giant. With the posting of 18.6 billion naira profit.

Colaco is convinced that the company’s consistent focus on strategy is bearing fruit. And that the dairy company is off to a good start for 2016 on the road to achieving its quite ambitious goals.

“Growth is a key part of our business model. And that comes with the combination of a few things which include bringing the goodness of dairy to Nigerians; activation; communications and reaching out. We’ve been working tirelessly with healthcare professionals by providing them with scientific insight into good nutrition. We work with government partners to make milk accessible to schools”.

Access to dairy products

“We also try to engage with consumers through different channels to make sure that the product is available across the country because we found that there’s still a large part of Nigeria that does not have access to dairy products. And one of our big initiatives is to reach out more directly and make sure that we cover many more outlets especially in the rural areas.

To be successful with all these means having to work on the pricing of our products to make them more affordable. These are the factors that helped us to get to where we are. But more importantly, our unfailing focus on quality stands us out as the market leader” Colaco explains.

The Royal FrieslandCampina is a Dutch dairy co-operative, rated as one of the top 5 dairy companies in the world with annual revenue of 11.4 billion euro. With operating offices in 28 countries, the company’s dairy products journeyed their way into more than 100 countries. Explaining how FrieslandCampina WAMCO Nigeria operations fared in comparison with the other countries, Colaco points out that country performances vary depending on the global and local economic and competitor situations:

“Overall, 2015 was a good year for FrieslandCampina globally and we gained strengths in our markets in China and South-East Asia where we already have a strong leading presence. Europe was more challenging because they had market weakness and the low milk prices resulted in the challenge we faced in Europe. That said, the organization is well on track to its 2020 vision especially in the area of moving away from pure commodity dairy to more value-added dairy propositions. We did particularly well with specialized nutrition for children across the world and that has continued to grow over the last few years particularly in China and other parts of South-East Asia.”

Back home in Nigeria where the company announced a turnover of 120.72 billion naira at its 2015 43rd Annual General Meeting, FrieslandCampina WAMCO is known through the Peak Milk brand which was previously manufactured under the name West African Milk Company (WAMCO) about 60 years ago.

In a 2009, the company which had become Friesland Foods WAMCO yet again changed to Friesland Campina WAMCO through a global merger that the parent company in The Netherlands had negotiated. The merger, according to the company, meant that FrieslandCampina is better able to anticipate and respond more dynamically and effectively to the constantly accelerating changes in market conditions, the ongoing liberalization of international markets and increasing competition, both regionally and worldwide.

Indeed, the company’s logo represents the FrieslandCampina ambition – to get the most out of milk by producing food, drinks and nutrients that help people move forward in life. The pure white centre radiates a spectrum of colors which represent the endless possibilities of milk! Since the merger, driving the Peak brand more proactively has been a major priority.

For over 60 years, Peak Milk has remained the flagship of Nigeria’s evaporated milk brands and to this day, the milk brand seems to have retained its relevance and essentialism on the shelf.

Further growth opportunities

Reflecting on the Peak brand and its accomplishment, Colaco notes: “At 60, we don’t believe Peak Milk is grown up yet. We would like to believe that the brand is 60 years young and that there are still further growth opportunities for the product in Nigeria.

We also think that Nigerians should drink more milk because in terms of dairy consumption per capita; we have a long way to go and that’s why we’ve been introducing innovations and activations as a way to engage with consumers more than before”.

One of the challenges FrieslandCampina Wamco finds operating in the Nigerian dairy industry is low dairy consumption by Nigerians. As more of the rise in world GDP shifts to the developing world, there has been a simultaneous increase in the consumption of dairy. From 2010 to 2015, the biggest dairy consumers were China, US, Brazil, Russia, India, Germany, France and Canada. And there is truly a striking correlation between income per capita and dairy product consumption in those countries where purchasing power growth has a strong impact on diet, as far as food represents main household spending.

However in Nigeria, Colaco concedes that the consumption of dairy products per capita per year was only 15 liters: “One of the challenges is that dairy consumption is not naturally embedded in the culture of Nigeria. Unlike what you find in some European countries where the per capita dairy consumption is 150 liters a year. And because we’ve been able to find out that the challenge is a little bit more of a lifestyle thing we’ve been working to make sure that we get through to the Nigerian consumers even more and find a way to integrate dairy into their daily lifestyles here.

That’s exactly what we’ve been trying to do with our different products and propositions. And then, we are also introducing consumers to different usage habits. And that’s one of the big thrust of the new Peak campaign where we positioned the brand as not just being best for use with tea and coffee but also for other needs and occasions and potentially, even cooking.

We’ll be extending the range because it’s about understanding the consumer perspective and making our products relevant to the consumer needs”.

Rahul Colaco has been the managing director of FrieslandCampina WAMCO Nigeria PLC since January 2015. His 18-years sojourn in the FMCG industry has seen him cover general management, marketing, supply chain and finance in developed and emerging markets.

Emerging markets

Starting off with KPMG as an auditor before joining Unilever, he’s worked in India, Italy, and The Netherlands; the latter two in regional roles covering Western and Eastern Europe for Unilever.

In 2010, he was appointed FrieslandCampina marketing director in Malaysia (Dutch Lady Milk Industries).

Two years later, he was stepped up to become managing director, heading Malaysia’s biggest dairy company. Since taking these roles, Colaco finds the Fast Moving-Consumer Goods (FMCG) industry very exciting and one characterized by constant change.

And the change inherent in his industry has kept him at the cutting edge of industry issues particularly as it concerns competition: “We believe competition is good because I agree with the free market philosophy especially in the dairy segment. And given the several challenges in the industry, we think that there should be more companies like us talking about the goodness of dairy.

“We also think that in a market of over 170 million consumers, there’s enough space for quite some competition and so, we welcome competition because it helps to ensure that we’re still 60 years young and don’t become complacent.”

Credits: Vanguard

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