Organic products retailer and manufacturer focuses on franchising and overseas markets
AFTER some 21 years of pushing the BMS Organics chain into the market, Terry Lee thinks it is time to enable others to also participate in its growth story.
Last November, FMC Greenland Sdn Bhd – the holding company of the BMS Organics chain – launched its franchise programme.
“We’ve already opened 40 outlets on our own. After 21 years of running this business, I think it’s proven to be a sustainable model. It’s time to let other people come in and join the party,” says the chief executive officer.
And he is not the only one who thinks so.
Within three months of launching the programme, they’ve gotten a request to open 18 new outlets.
But Lee doesn’t want to rush it. For now, he is looking at opening one outlet per month, two at most.
“I don’t want to grow too fast. I want it to be more stable because we just went in. We have opened five of the outlets that signed up. But we want quality instead of quantity.
“If we open five outlets in a month, we definitely won’t have enough resources to support our franchisees. We can’t rush. We hope franchisees are successful. Only when they are successful, we are successful,” he says.
Lee says franchisees can tap into BMS Organics’ strong brand presence in the market, its large database of over 100,000 members as well as its big marketing budget of over RM1mil.
And if all goes well, who knows, five outlets a month may not be that far off.
Lee, 39, founded FMC Greenland with his three older brothers in 1997.
His eldest brother had observed a healthy eating trend that was gaining traction in Taiwan and not long after, the Lee family was on the “eat healthy” bandwagon.
They opened their first retail outlet in Subang Jaya, Selangor, and the company has since grown from strength to strength.
Today, FMC Greenland is not only a retailer, it is also a manufacturer, distributor, wholesaler and exporter of organic products as well as a restaurant operator. It has grown into a network of 40 outlets across Malaysia, carrying a wide range of products from fresh organic produce and supplements, to dry food, beverages and breakfast-type foods, to skincare products, baby foods and water filters, and even pet food.
And with the groundwork laid over the last 21 years, Lee is ready to take FMC Greenland to its next phase of growth.
But Lee is cautious about over saturating the market.
While the healthy trend is increasing, he opines that Malaysia could probably take about 150 outlets in total before the market gets too crowded.
“Unless, we look at other models, which the market can take more of,” he says.
Apart from its retail outlets and cafes, BMS Organics recently launched its Grab & Go model, which caters to a market that wants convenient access to healthy products. It offers simple food like sandwiches, wraps, fruits and juices with some other retail products.
It currently has one outlet at KLIA 2, with a few more slotted to open in book store chains and sports centres.
“The Grab & Go is a simple concept. You don’t need a lot of manpower, only two to three people to run the store, and investment cost is lower. Unlike F&B, where you need higher cost because you need a bigger space, renovation and kitchen equipment,” he says.
Given it’s franchise route, he is optimistic of the company’s growth.
FMC Greenland currently makes an average turnover of RM50mil.
Spreading its wings
With partners coming in to help grow its local network, Lee is now focused on growing abroad.
BMS Organics’ products are known in other markets as they have been exported to countries such as Singapore, Hong Kong, China and Brunei.
But last year, it expanded its physical presence overseas with an outlet in Shanghai, China.
It was an opportunity that came knocking on their doors, Lee says. And it coincided with Lee’s aspirations to further spread the message on protecting the environment through a vegetarian lifestyle.
“Someone wanted to invest in us and open our outlets there, but they needed me to be there,” he shares.
These days, 70% of Lee’s time is spent in China to oversee its operations there.
While the expansion presents BMS Organics with a big opportunity, the Shanghai market is a different ballgame altogether. It is bigger, better and faster. The competition is fierce and survival rate is low. Choices are plentiful and customer loyalty is rare.
“You can’t be taking 21 years to build 40 outlets,” he jests.
Unlike in Malaysia where customers will saunter back into your dining room for the food and for a sense of familiarity, there is a need for a robust promotional and marketing plan in Shanghai to keep pulling customers back or they’d be easily distracted by another restaurant down the road.
Another roadblock to growth in China is the high cost of rental and manpower. He notes that rental cost is three times that of the top malls in Malaysia. There are also a lot of taxes, putting a squeeze on margins.
Additionally, being unfamiliar with local regulations makes it all the more challenging.
“People say if you can survive Shanghai, you can survive anywhere in China. I think if you can survive Shanghai, you can survive anywhere in the world,” laughs Lee. “It’s really not easy.”
He tries his best to adapt and learn in order to survive and grow there.
But Lee’s efforts can be said to be fairly successful. It currently has two outlets in Shanghai and will be opening another four over the next three months.
“So, by the end of the year, we will have six outlets in Shanghai alone. For a vegetarian restaurant to open six outlets in a year in Shanghai, it has never happened before. And we are a Malaysian company. We are proud about this but it is super challenging to survive there,” he says.
If an entrepreneur were to express interest in expanding to China, think twice, Lee advises.
He’d like to think that they are brave for having taken the step to venture there. But Lee emphasises that it’s not all about making more money.
“If it’s because of the money, I would have given up. I don’t need that kind of pressure for this money. I really believe that the vegetarian life will help the environment a lot. And having more stores give consumers that option,” he says.
Their stores in China receive about 150 customers a day, of which, he estimates only 5% of them are actual vegetarians.
With its first step out of the country done and dusted, and with the launch of its franchise programme, FMC Greenland is also eyeing opportunities in other markets.
The company has gotten enquiries for master franchise deals in Taiwan, Singapore and Macau.
Lee notes that getting locals to drive the business in these countries would help BMS Organics grow better as they would have more knowledge of the local business environment. Plus, there is always a need to localise its products and services to cater to the different markets, which could be better handled by a master franchisor.
“We can support them in terms of knowledge, products, experience and marketing. We have strong product research and development. We have a lot of products in our brand and they are exclusive to us,” he adds.
FMC Greenland manufactures about 20% of its own products. The rest are produced through original equipment manufacturers according to their formulas.
Lee notes that its growing number of outlets and market reach has given them sizeable scale, enabling them to reduce the prices of their products.
More than a business
Apart from growing its various business segments, Lee is also interested to grow its non-core segments.
Last year, BMS Organics opened its Employees Wellness and Reward programme to other corporations. The programme allows other companies to tap into BMS Organics’ resources to track their employees’ health.
FMC Greenland has over 20 nutritionists under its employment and a significant number of equipment that helps measure a person’s health.
Under the programme, BMS Organics will provide the companies’ employees with one-to-one health checks and consultation and health talks.
Lee adds that it will also prepare employee health analysis reports for the company.
“This will help their Human Resource departments know who in the company is healthy or not. A lot of companies have problems with many employees taking MC. So, we are helping them monitor the health of their staff,” he explains.
In return, the companies’ commitment is to purchase cash cards from BMS Organics at RM30 a piece.
Currently, over 70 companies have sign up for the programme.
Lee shares that the programme has been used within FMC Greenland for many years. He says it is important to have a healthy workforce. He even enforces a practice whereby an employee can be disqualified from getting a promotion if their health is not up to par.
“I’m very disciplined when it comes to health,” he says.
“If their health is no good, we cannot promote them. This is one of the criteria. If you cannot discipline yourself to take care of your health, how can you be a leader of a company? As an employer, you don’t want to see your staff not healthy,” he adds.
BMS Organics also organises cooking classes and sharing sessions to educate the public to eat healthy. More and more, Lee wants to shape BMS Organics as a platform for people to bond over positivity and good food.
It also runs programmes such as its Green Mondays and Love Tree Thursdays that allows consumers to be a part of sustainable efforts.
On Mondays, customers can spend RM19.90 at its retail outlets and in return, get a free meal at its cafe. About 1% of its revenue on Mondays will go to organic farmers.
And on Thursdays, 1% of its cafe sales contribute towards its pledge of planting 210 trees.
“We are not just a restaurant or retail outlet. It’s a holistic centre. This is my direction. We don’t just want to focus on sales. We must be an organisation that remembers our culture and core values and our purpose,” he says.
He emphasises that “where you use your strength is where your business will build”.
Lee’s outstanding work has not gone unnoticed. He took home the Entrepreneur of the Year award in the above RM25mil revenue category at The Star Outstanding Business Awards 2017.
He hopes his achievement will highlight a growing need for people to eat and live healthier.
“The health awareness is growing. It is moving much faster than previously. And I think the younger people can see how their parents suffer when they are ill. I don’t think we want to be like this when we grow old, so we should take care of our health,” he says.