Sri Lanka’s Munchee on a global expansion thrust
Ms. Shea Wickramasingha
CBL Group, with its flagship Munchee brand, is setting the stage to make a global footprint in the coming few years. Munchee, Ritzbury, Revello, Tiara, Lanka Soy, Sera, and Samaposha are just some of the brands that enrich the lives of over 5 million households across Sri Lanka.The group has eight (8) subsidiary companies, which fall into three (3) clusters: Confectionery, Food, and Natural Foods..
A food conglomerate primarily known for its iconic brand, Munchee over the years expanded into various categories, establishing a brand in nearly every market it operates in. Munchee journey has been one of innovation and bringing to Sri Lankan consumers choice and differentiation. Within Sri Lanka, these brands command, market leadership so driving more is difficult, which leaves the company with an option of venturing overseas, Ceylon Biscuits’ Group Managing Director Shea Wickramasingha said.
“In chocolates, we’ve captured a substantial share with Ritzbury and Rovello. The cereal brand, Sama Posha, holds over 75 per cent of the market. Additionally, Lanka Soy leads the soy category, and the Sera brand, which is an expanding category, aims to be a staple in every kitchen. For expansion, we have been looking overseas and this year is quite a thrust in that. We’re looking at taking our confectionery business globally. India is an obvious country for us to be a big player and we have plans to do this. We have a factory in West Africa, in Ghana, looking at the African market,” she said in an exclusive interview with The Sunday Times Business on Tuesday.
Through these entities, the company will look at other markets. “We are available in over 55 to 60 countries with the Munchee brand. “We do both Munchee brand and private labels for our global business, so about 20 per cent of Munchee’s portfolio is an export portfolio. CBL Group is one of the newest entrances into the coconut industry and within the short span of about seven years, it consolidated the position of being, the largest coconut milk exporter out of Sri Lanka while being a 95 per cent export-oriented business."
The company is looking at expanding this business in Indonesia. “When you export you need to manage country risk. This is what COVID-19 and the economic crisis taught us.
To drive a robust exporting environment, we need to minimise that risk, and the other thing is the supply chain. While we are very involved in driving Sri Lanka’s supply chain up, it takes time and, we need to be operating in a place where we have more access to coconut,” Ms. Wickramasingha added. Sri Lanka produces between three to three and a half billion coconuts depending on the year and for an export business such as this, the country, needs to be producing about four and a half billion nuts.
As the business expanded, the company sought greater focus across various areas. Munchee, as the flagship brand, often received excessive managerial attention, whereas smaller brands required more support to thrive while clustering businesses by brand and function.
Attributing the group’s success to innovation, she said that one of the reasons for clustering is to have more focus on the different businesses. “We are constantly introducing new products. Innovation has slowed down a bit because of COVID and the economic challenges.”
Noting that the challenge in innovation is bringing something affordable to consumers, she added, “We saw a huge market decline during the pandemic, over 30 per cent for most of our products in Sri Lanka and after the crisis, people don’t have the same purchasing power. Against this backdrop, we’ve done a lot of innovation that put in new products – our business is only as good as what we give our customers.”
The company has multiple competitors in Sri Lanka, but from a while back the company has been positioning itself globally where it competes with all the global brands. “For companies from Sri Lanka given the kind of restrictions we have to expand internationally and given the economic crisis and the control of exchange movement, it is a challenge for us taking Munchee and other brands globally.”
Emerging markets see a lot of growth and that’s where ‘you’ can take your innovation forward, she said, noting that the company went to Ghana (where it has a strong presence) specifically because it already had a very thriving export business. “At one time we were doing over 25 – 40-foot containers a month. When they had a currency crisis, it didn’t make sense to export the product, which was how we decided to set up a factory in Ghana.”
Both India and Ghana will focus on confectionery products, leveraging Sri Lanka’s expertise.
Explaining getting into modern trade, Ms. Wickramasingha reminisced about being one of the partners with John Keells and Richard Peiris who bought over Sathosa for a very brief time. “We feel that that’s the front end of the consumer and, when you talk about innovation and understanding the consumer, having that understanding is a big plus. But one of the reasons we joined with Spar is really for the model that Spar has globally and that is collaborating with independent retailers.”
She said: “Sustainability has always been integral to our operations. We collaborate with farmers to improve agricultural practices and introduce technology to communities that lack access. Notably, we’ve eliminated chemical fertilisers in our soybean production by fixing nitrogen naturally, which required extensive education for our farmers to adopt new methods. In our commitment to animal welfare, over 80 per cent of the eggs we purchase are now cage-free, reflecting our dedication to sustainable practices.”
Every woman can make a difference, yet the number of women applying for senior leadership positions is still low, she said, noting that, transformation in societal and cultural attitudes will change this. “”As a mother, I’ve struggled to balance family and work. Through the IFC programme, we encouraged distributors to involve female family members in their business, receiving positive feedback. By collaborating, we can foster a welcoming environment for women in leadership.”
On the issue of the current taxation, she said that the government must widen tax brackets to address the economic crisis sustainably. She stressed that transparency and efficient public spending are essential, as raised tax revenue should be used effectively.
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