AMBER ARSHAD: How is the Fauji Foundation structured in terms of the different divisions?
AAMIR KHAWAS: The Fauji Foundation was established in 1954 and is one of the largest business conglomerates in Pakistan. The objective of the Foundation is to serve the interests of former service men. Eighty percent of all our profits go towards the services’ medical facilities, schools, colleges and training centres across Pakistan. You could say that 80% of the profits cater to about five percent of the country’s population. The Foundation has four fully owned projects; Fauji Cereals, Foundation Gas, Overseas Employment Services, and Fauji Foundation Experimental and Seed Multiplication Farm. Then there are 15 associated companies in which the Foundation has shares; these include Askari Bank, Fauji Cement, Fauji Fertilizers, Fauji Fertilizers Bin Qasim Limited (FFBL), Fauji Kabirwala Power, Fauji Oil Terminal and Distribution among others. FFBL has started to diversify in other businesses and there are four companies under it; they are Fauji Coal Power, Fauji Foods, Fauji Meats and Fauji Wind Energy. Fauji Foods is the Foundation’s most recent expansion and was established in 2015.
"The objective of the Fauji Foundation is to serve the interests of former service men. Eighty percent of all our profits go towards the services’ medical facilities, schools, colleges and training centres across Pakistan. "
AA: Why did you decide to diversify into food and acquire Noon Pakistan?
AK: FFBL wanted to diversify from the fertiliser business which is largely dependent on the availability of gas, and because of the current shortage this business is not growing the way it should be. In fact, a lot of fertiliser companies, including Engro, are diversifying. Going into food was deemed very feasible – and dairy as the one with most potential. While we were doing feasibility required to set up the company, we learnt that Noon Pakistan was up for sale. Noon Pakistan was the oldest dairy company in Pakistan, added to which it had a very strong brand in the form of Nurpur butter. Noon Pakistan had no negative baggage, it was simply the case that perhaps not enough marketing was being done to promote the company. This is why Fauji’s management decided that instead of launching new products from scratch, they would buy Noon Pakistan, turn it around and then later consider further expansion.
AA: What is the share division of Noon Pakistan now?
AK: FFBL has the major share (49.12%) and Noon Pakistan has been renamed Fauji Foods. Fauji Foundation has 12.75%, the Noon family 16.27%, and the rest (21.86%) are with the general public.
AA: What is Fauji Foods’ vision?
AK: Our vision is ‘transforming lives through nourishment’. We want to become one of the top players in the industry. We will not restrict ourselves to dairy; our aim is to make it a comprehensive foods company.
"Everything has been overhauled – product recipes, raw material, the logo, the packaging and the way our employees are trained. With aggressive marketing, better branding, better quality and the name of the Fauji Group, we plan to grab a much larger chunk of market share."
AA: How do you plan to differentiate from Nestlé and Engro, which are very strong players?
AK: Firstly, we have put together the right HR. Ninety percent of our HR has been inducted from leading Pakistani companies such as Unilever, Engro, Nestlé, Pepsi and Coke. Our team is young, energetic and extremely enthusiastic about infusing new life into the brand. Secondly, we are the only ‘true’ dairy company in Pakistan – we produce the entire dairy line, ranging from cheese and milk to yoghurt and butter – and no other company offers this in Pakistan. To maintain product quality, our machines and equipment are similar if not better than what Nestlé or Engro have. Everything has been overhauled – product recipes, raw material, the logo, the packaging and the way our employees are trained. With aggressive marketing, better branding, better quality and the name of the Fauji Group, we plan to grab a much larger chunk of market share.
AA: What is your current share in the dairy category?
AK: We are the market leaders in butter (more than 50% market share), the other players are Lurpak and Adam’s. Overall we hold six to seven percent of the dairy market, which is not much, and we aim to get to around 25 to 30% once our revamped brands start gaining traction and we relaunch other product lines.
AA: Which brands have you relaunched so far?
AK: In March this year we relaunched Dostea, our tea whitener that was previously known as Chai Mix. We chose this category because it is volume-based. We improved the recipe, changed the packaging and the marketing mix, appointed new distributors and improved our distribution. We are aiming to go from 200 cities to about 400 cities and towns. The second brand we relaunched was Nurpur in May 2016. The new look was carried out through the milk line, cream, butter and cheese. We improved the recipes, changed the packaging, the marketing mix and positioning, but kept the name Nurpur as it had reasonable equity and even a legacy of its own.
AA: The packaging of both Nurpur and Dostea is unconventional. What factors were kept in mind?
AK: We wanted to create waves – and hence followed the ‘purple cow’ marketing strategy. We opted for colour themes (charcoal grey for Nurpur Milk and bright yellow for Dostea) that would stand out on the shelves and give a new look to the category. Initially people did question the colours, but gradually they started to like the packaging. We also worked on the functionality and used extremely durable European Ecolean packaging. We have also introduced a new SKU size of 500 ml for Nurpur Milk, which no other dairy brand currently has.
AA: What was the Big Idea behind the TVCs for both brands?
AK: We wanted to stand out and didn’t want to do the typical naach gaana or ‘achi bahu impressing the saas’ routine. For Dostea, we made a series of five short TVCs narrating the story of a joint family welcoming their new daughter-in-law – but there was nothing conventional about that family. The series started with the son hesitantly introducing the girl and ended with a shaadi finale. The theme was based on ‘friendship in families’ and in line with the brand name ‘Dostea’.
For Nurpur, we took a clutter-free minimalistic route and created a story using exotic food shots. The TVC was a symphony of our various dairy products interacting with each other. I think the TVC has maintained the balance of being both functional and emotional.
AA: Who were the creative people behind the TVCs?
AK: After we came up with the initial idea in terms of the look and feel we wanted to give to the brands, we communicated the idea to a few top creative agencies of Pakistan. Fishbowl came up with the most innovative ideas and they did the package design, the TVCs and the radio spots. The TV shots in the Nurpur TVC were executed by a creative director from the Netherlands and music was by Noori.
AA: What is your target market?
AK: For Nurpur Milk, it was mainly SEC A and B; however, after the relaunch we noted that the lower SECs are trying out the brand as well. For Dostea, we are mainly targeting SEC C. Our sales are in line with industry trends; tea whiteners have a bigger market in areas where non branded milk availability is low, for example in Khyber Pakhtunkhwa and even in some parts of Karachi.
AA: What is the next product area you plan to revamp?
AK: Flavoured milk and juices. We already have brands in this category and we will revamp and relaunch them in the first quarter of 2017. Right now we are aggressively investing in our ‘revival’ and it will take about three years to breakeven. The way things are panning out, we anticipate that within five years we will be listed among the top dairy companies of Pakistan.
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