Interview with Memosh Khawaja, CEO, Haleeb Foods Limited.
Memosh Khawaja, CEO, Haleeb Foods Limited (HFL), speaks to Sadia Kamran about the transformation of the Haleeb brand.
SADIA KAMRAN: How has Haleeb evolved as a brand over the years?
MEMOSH KHAWAJA: Haleeb are entering a third phase of transformation, which we refer to as Haleeb 3.0. Our initial brand identity was that of a premium milk brand and we became the largest player in the packaged milk category with over 50% market share. After hitting this peak, several changes occurred within the company and a sense of complacency set in. Gradually, market share began to taper off and at the same time the company developed an interest in the tea whitener category, which was becoming an attractive proposition. However, the issue with the tea whitener category is that it does not have a lot of scope in terms of value addition. The problem at Haleeb was the fact that for 25 years, the company was a one-brand company. Haleeb 3.0’s vision is to move from a single-category focus to a diversified portfolio and transform HFL into a future looking company with quality at the core of everything we do.
SK: In practical terms, how will HFL realise this focus on quality?
MK: HFL focus on quality through the Quality Through The Line (QTTL) Programme, which is aimed at ensuring quality across the entire value chain through the ‘3Ps’; people, processes and peripherals. All HFL employees have to go through the QTTL training programme and are taught to embed the importance of quality in each and every aspect of the entire value chain. In terms of processes, HFL believe that leading edge quality management processes will support and steer the company’s quality mission in a sustainable fashion. We have made massive investments to upgrade our manufacturing, quality control and research facilities with state-of-the-art equipment and machinery. Throughout the value chain, from milk collection to consumer complaint handling processes, projects are underway to fill existing gaps as well as raise the standard of the programme on an ongoing basis.
Premium milk brands are forced to invest heavily in developing specialised supply chains and maintaining quality at each point due to inefficiencies in milk production, processing, storage and transportation and all this drives up the price of a very basic commodity.
SK: What product categories are HFL focusing on?
MK: A major flaw the company had developed was that they had become a ‘me too’ company. The aim now is to move towards being a pioneering food organisation by creating blue oceans and value additions that do not exist in the market. The three new categories we have recently ventured into (juices, flavoured milk and a new sub-segment – ‘value for money’ milk) are those which research has identified to have the most potential.
SK: What is ‘value for money’ milk?
MK: This is in line with our vision to convert all consumers from khulla doodh to quality, packaged milk that is affordable and can be purchased regularly and this is why we launched our Asli brand. The fact is that prices of packaged milk brands are very high and therefore people who do not have that affordability are forced to buy low-quality milk or dairy drinks.
SK: What issues do you face in terms of supply chain?
MK: The dairy sector is very underdeveloped in terms of quality and infrastructure, especially in the smaller farms, where the bulk of the milk is sourced. Although the Dairy Association is working with dairy companies to streamline the supply chain and processes, it is up to individual players to bring to market milk of the highest quality. Premium milk brands are forced to invest heavily in developing specialised supply chains and maintaining quality at each point due to inefficiencies in milk production, processing, storage and transportation and all this drives up the price of a very basic commodity. HFL are ensuring quality standardisation by collaborating with some of the largest dairy farms. Compared to dairy, juices are a category with low entry barriers. There are 50 to 60 companies offering over 200 brands in the market. Our latest offering in this category is Chaunsa, Chaunsa which is available across a wide spectrum of prices, from as low as Rs 20 to as high as Rs 200. The variations are due to vast differences in quality, of which most consumers are unaware. Juices are broadly classified into three categories: pure (100% fruit content), nectar (anywhere between 25 and 99% fruit content) and fruit drinks (usually about 10% fruit content). Given that Pakistan has a rich supply of kinnows and mangoes (the two most popular juice flavours), 90% of the ingredients are sourced locally.
One of the goals of the government is to convert the whole of Punjab from a loose to a pasteurised milk (processed to the minimum quality standard) market in the next five years. That means modernising 95% of the dairy category and such a massive task cannot be achieved without the involvement of the private dairy companies.
SK: Are water scarcity and sustainability areas of concern for HFL?
MK: Pakistan is on its way to becoming a high-consumption society and only when that fully happens will there be a nationwide realisation that the environmental impact must be minimised, but consumers are not there yet. The Punjab government (70% of the milk supply comes from Punjab), is actively working towards making the category efficient and sustainable and we are part of these public-private collaborations. One of the goals of the government is to convert the whole of Punjab from a loose to a pasteurised milk (processed to the minimum quality standard) market in the next five years. That means modernising 95% of the dairy category and such a massive task cannot be achieved without the involvement of the private dairy companies. It is a pity that we are unable to export milk and dairy products because we are unable to meet international pricing and quality standards. Exports are limited to Afghanistan and the category is underdeveloped compared to countries such as Turkey despite our immense production capacity.