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SINGAPORE : Singapore coffee suppliers are giving global players like Starbucks a run for their money.
While Starbuck reported its first loss in the third quarter since going public in 1992, Singapore suppliers such as MacCoffee and Super Coffeemix are still enjoying strong foreign revenues.
They said prudent cost management and clever marketing are key to staying ahead.
MacCoffee is a household name in places like Kazakhstan and Russia. This brand of coffee from Singapore-based Food Empire has helped boost the firm's revenue by over 40 per cent on-year in the last quarter.
Food Empire is crediting that to its strong branding for MacCoffee, which commands more than 84 per cent market share in Kazakhstan and above 50 per cent in Russia.
Tan Joon Hong, chief operating officer of Food Empire, said: "We look at strong markets such as Russia, Eastern Europe, and Central Asia. In each of these markets, we are very close to the market.
"We look at competitor pricing, and also inflationary pressure and trend in all of these respective markets, and manage our pricing in these markets."
The market has been slightly tougher for Super Coffeemix. But the firm is still seeing a healthy bottomline after raising prices by between 7 and 10 per cent this year to counter the rising price of coffee beans.
James Wong, executive director of Super Coffeemix Manufacturing, said: "Coffee price has increased a lot since last year - I think by more than 100 per cent. Now there are a few ways we can defer all this.
"First, we will try to improve our production and efficiency, and try to look for cheaper labour. That is the reason why we have shifted our plant from Singapore to Malaysia.
"The second way is to increase our selling price, (but) consumers might not be able to accept this. Even the retailer might give us a lot of problems if we increase our selling price.
"But that is something we have to face. It's a challenge. (As we) increase the price, and at the same time we do some promotion activities, that will ease the immediate impact of the price (hike)."
The coffee business is relatively tough, and Singapore firms said it is crucial to build product awareness to stay ahead. They are spending anything between 10 and 15 percent of their revenues on marketing and branding just for this purpose. - CNA /ls
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