FOR a food and beverage (F&B) company, Berjaya Food Bhd (BFood) appears to be an anomaly compared with the others in the industry in extraordinary times.
Slightly more than a year since the first movement control order (MCO) in March last year, the company appears to be sailing the rough waters quite steadily.
In an industry that has generally been hard hit by the Covid-19 pandemic, BFood seems to be among the select few F&B operators that have managed to adapt to the new normal.
Speaking to StarBizWeek, CEO Sydney Lawrance Quays (pic) says that the company has had to endure some lost opportunities due to the pandemic but it managed to capture some good growth.
BFood saw its bottom line returning to the black in its third quarter ended March 31 with an RM11.61mil net profit compared with a net loss of RM1.39mil recorded in the same quarter a year ago.
Revenues rose to RM181.73mil in the recent third quarter from RM158.60mil in the same quarter a year ago.
In the year-to-date (y-t-d) nine-month cumulative period, the company had managed to triple its net profit to RM33.10mil from RM11.24mil a year ago.
The second MCO, that was announced some months ago, was not prevalent and it had not adversely impacted its operations compared with the same quarter of the preceding year.
The y-t-d which saw its net profit tripling is due to effective cost management to mitigate the impact from the pandemic and from the closing of loss-making outlets.
“The experience has been a little volatile especially during MCO 1.0 on March 2020, which was a little scramble and struggle. “In terms of business operations, there are a lot of things which we have come to anticipate already and we are prepared for it internally, ” Quays says.
The decision to not allow dining-in during the third MCO will impact on BFood but the company is on a better footing to face the situation.
“We have offered alternatives for our customers: drive through which is a very big thing now.
“BFood has close to 57 drive-through outlets which are providing a lot of convenience to the customers, ” he says.
“We have the most drive-throughs in the region for Starbucks and this helps the business.
“It is quite normal for people to order and get food delivered to them: increasingly there are a lot of customers who would buy a drink this way. This is how the business is evolving, ” he adds.
He says the change in consumer habits and food delivery will not be able to compensate for the loss of opportunities from disallowing dining-in as the latter is a big part of its business.
Despite the hiccups from the pandemic, the company is moving ahead with its expansion plans as it believes that there is still growth to be captured.
BFood has several brands under its belt namely, Starbucks, Kenny Roger’s and Joybean.
Starbucks, which is operated under its unit Berjaya Starbucks Coffee Company Sdn Bhd, contributes to most or about slightly over 80% of its revenues.
Starbucks Malaysia has been operating since 1998 and further expansions are being planned.
“From now until the end of the financial year in June, we are looking at opening 12 more stores.
“We have secured the locations and they are currently under construction, ” Quays says.
“The malls are definitely harder hit and it’s a bit of a balance for us.
“For Starbucks, we will be located in all states in Malaysia and we will soon open an outlet in Perlis, which is the only state that we do not have an outlet in, ” Quays points out.
On the outlook for the prices of raw materials moving forward, he says these are mostly fixed through global purchase contracts.
“A lot of suppliers have been with us for a while.
“For coffee, the prices are fixed by Starbucks international, and they don’t vary very much here based on global purchase contracts.
“While for food and construction, we have kept the prices as they are (in contracts), ” he says.
Moving forward, Quays says more growth could come its way once the vaccines are fully rolled-out and the situation returns to normal especially with respect to dine-ins and a potential resumption in international tourism.