Interview with Ali Akbar, CEO, Engro Foods Canada.
MARIAM ALI BAIG: What led to the establishment of Engro Foods Canada?
ALI AKBAR: In 2003, when Asad Umar became president, he said that one of the major initiatives under his leadership would be Engro’s entry into the food business. The idea was to capitalise on our 40-year knowledge base of the rural economy and our relationship with the stakeholders; be they the farmers, the consumers or the government. As we developed our portfolio strategy, the management and the Board decided that the vision of the organisation was to ‘elevate consumer delight worldwide’, which meant that the ambition was to cross Pakistan’s borders. In 2010, the Board gave me the task to develop global business opportunities for the organisation. As we mapped out various opportunities, we developed a grid which suggested that we should go into a segment that was big, but still had the potential to grow. We then identified the halal business as a huge opportunity, given that the global Muslim population is 1.6 billion. Added to this, the world food economy is worth about four trillion dollars, of which the halal economy is worth $1.2 trillion. So after conducting a thorough feasibility across the globe, we identified North America as our entry point.
MAB: Why North America?
AA: The Middle East is fairly competitive and Europe is very fragmented, as every country has its own legislation. North America presented a unique proposition. In Canada, 90% of the Muslims live in Ontario and this makes operations very easy. In the US, the major markets are California, New York, New Jersey, Philadelphia… so very clear clusters. While targeting North America, we found that Al Safa, one of the oldest halal brands in Canada, was up for sale and that is how we got into that particular business.
MAB: How much does North America account for in the context of the $1.2 trillion halal economy?
AA: One hundred and thirty million dollars.
MAB: Is the plan to stick to the halal segment?
AA: Yes, but the aim is to scale up operations and launch new categories. We are now launching Al Safa rice in Canada and the US, as well as flat bread. These are ethnic products, and if you develop a proposition and target the ethnic market, the sky is the limit in both countries. The distribution channels, the consumer base and mindset are the same.
MAB: How do you segment your consumers?
AA: Most North American Muslims emigrated from different parts of the world, which makes things very interesting. In Pakistan the segmentation is usually by income group; North America is more complex. For example, when you target a Muslim housewife, she can be Bengali, Iranian, Lebanese, Sri Lankan... and each one has her own cuisine style, making it a massive challenge to develop products that appeal to all of them. The spice type and level makes a huge difference. A Sri Lankan family may prefer a lot of spices, a Lebanese household may not eat spices at all and a Saudi Arabian family may prefer an altogether different type of spice. This is dimension number one. Dimension number two is the fact that given their diversified background, these consumers have different food buying habits.
#### “If you cut my veins, the chances are that you will find green spots. I am so passionate about my country”
MAB: In what way?
AA: A Pakistani housewife will try to buy from a Pakistani ethnic shop. She will go for smaller portions and choose items where the cash outlay is lower.
A Lebanese lady is likely to go to an Arab outlet run by a Lebanese or a Palestinian and buy in bulk. A Far Eastern housewife will go to a Chinese outlet and prefers variety rather than bulk. The third dimension is that in terms of belief, the consumer band is very diverse. Some are very concerned that their meat or chicken should be hand-slaughtered under strict Islamic conditions, others are not particularly concerned about whether the meat is halal or not, and then there is the 65% in-between band, who hold to their beliefs but are progressive, and we are targeting this latter band.
MAB: What improvements has Engro brought to the Al Safa brand?
AA: When we bought Al Safa in May 2011 we took three major steps. The first was to fix the product. Because we market to a huge band of consumers across different ethnic backgrounds, we defined our core target audience for 2012-13, and then for 2014-15, 16, and so forth. We are now developing 65% of our portfolio to cater to the segment we have initially identified. This does not mean we will be ignoring the others; they will be catered through other SKUs.
MAB: And the segment is?
AA: South Asian Muslims. The spice level and quantity, the pricing, everything is developed as per their requirements, after which we will target the Arab segment and then the Far Eastern one. The second step was to identify the low hanging fruit in terms of the market. New York, New Jersey and Philadelphia constitute about 45% of Muslims living in the US. Ontario accounts for about 80-85% of Muslims living in Canada. So it makes sense to concentrate on those markets. The third step was to diversify by adding new products. We are launching a deli range which includes sausages, salami, baloney; the kind of food American Muslims want to eat, but could not get [as halal].
MAB: Are Al Safa products available at ethnic stores only or is the distribution wider?
AA: We are the only Pakistani brand available in Loblaws, in Sobeys, in Walmart, in fact in all the big chain stores in Canada and we are very proud of this.
MAB: Engro’s international expansion mission is reportedly to have a business to the tune of $1.5 billion by 2020. Are you on track to achieving this target?
AA: We will do much better. People smile when I say this, but my vision is for Engro Foods to sponsor the 2020 Olympics. What does it mean? One, the business has to be big enough and if not present on all five continents, then at least on three. Two, the PNL has to be big enough to enable such a sponsorship, and three, the brand should be instantly recognisable.
MAB: Where does your passion come from?
AA: Four people have played a major role in my life. The first was my mother. I can’t remember if we had new clothes for Eid, but we certainly did every August 14th. A lot of credit goes to my mother for shaping my thinking; it was what made me move from a blue chip organisation to a local company. I think if you cut my veins, the chances are that you will find green spots. I am so passionate about my country. The second lady is my wife. She is a fabulous girl. I have changed jobs so many times and taken a lot of risks. I was working for Coca-Cola and then one day I tell her I am joining Engro, and she supported me! The third lady is my three-year-old daughter Sheherbano; she has given me a new lease on life and the fourth person is my son Murtaza. These are the people who are doing it for me.
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