Food processing defined as the methods or techniques used to transform raw material into forms for human or animals consumption which utilize by food industry. Food processing take clean, harvested or slaughtered and butchered product and uses it to produce marketable food product. The concern of my report will focus on Gardenia Philippines Bakeries Industry. Gardenia is a food processing which transformed from raw material (Flour) to final product (bread). Gardenia Bakeries Philippines inc. (GBPI) they use to import milk only from particular countries such as USA, Australia and New Zealand. Gardenia only uses premium ingredients from all over the world that under strictly checking and testing to ensure the high-quality and safe bread product.
Becoming the premier company in the baking industry, being a consumer-focused and branded food company
Bread making to embrace good wholesome health and family values
Delight to more and more satisfied customers as it continues to create, innovate and share new, delicious and healthful product.
In 1978, gardenia first started as a small in-store bakery a Bukit Timah Plaza producing variety bread with the help of experienced American baker, Horatio ‘syed’ Slocumm, who had 35 years experience in the bakery business . In early 1997, QAF Limited through Gardenia international (Singapore) Pte Ltd established Gardenia Bakeries (Philippines), Inc. and started construction of its bakery plant in the Laguna international Park (LIIP) in Binan, Laguna. It is a multinational company with operations in Singapore, Thailand, Malaysia and other countries Asia. Gardenia Philippines began its operations in 1998 with a state-of-the- art bread factory considered to be the biggest and modern in the country. Gardenia grew rapidly after that. It offers a wide array of high quality bakery product including white and wheat breads, health bread, flavoured loaves, pandesal and snack items. Gardenia bread is associated with qualities such as trust, reliability, good taste, freshness, softness, oven-baked aroma and nutritive value. In highly competitive market, these are the values that make it stand out and stay ahead. By its product slogan “So goodâ€¦you can even eat it on its own” best describes the product benefits. Gardenia is singularly driven and aligned behind delivering superior consumer value through providing customer with superior brands. The Gardenia trademark means value and respected all over Asia. By delivering excellence in product quality and service, they set standards for the industry to follow in order consistently drive the market forward. At Gardenia, they are made the science of baking an art. Over the pass, further improvements have been made to the range of recipes and the method of processing. All these ensure that the aroma, taste and keeping qualities of the bread are being maintained. Besides that, Gardenia is constantly improving and adapting to suit consumer needs.
2.0 Strategic Analysis
There are 3 steps which follow by Gardenia bakeries food processing company.
High quality control team has set up by Gardenia in order to ensure that all ingredients and raw material are freshness and with best quality. From selecting to purchasing, they are strictest checking and specification the quality of product and finest ingredients. Gardenia has using Just-in-time system in purchase raw material. Therefore, they are very efficient in inventory control.
Gardenia using new facility features advance equipment that as globally-accepted baking industry standard in processing. It produces baked bread following a unique process. The whole operation of bread making is closely monitored by quality controllers with trained. They inspection the whole process ensure quality breads are delivered to the market. Other than that, controllers are responsible to ensure that every loaf produced is in best quality and meets customer expectations.
The production process starts with a Computerized system control. Begin blending of the right amount of quality ingredients required. This helps to makes sure equal goodness of every loaf.
Production of sponge mix
The specially formulated Gardenia enriched flour, purified water, yeast, vitamins and minerals are added together to form the sponge which released into a trough.
The sponge dough is then kept in a fermentation room, under controlled temperature and humidity. Fermentation process helps develop a unique Gardenia bread texture, aroma and taste.
Production of dough mix
At this stage, the sponge is mixed again with other ingredients t form the dough.
The dough is then divided into the standard weight for each particular loaf and conveyed to a rounder and checkweigher
The dough is then left to rest in the intermediate proofer for 10 minutes then just being moulded and placed into the baking pans.
At this final proofer stage, the yeast is allowed to rise further under controlled temperature and humidity. Once the dough has risen to the desired height, it is ready for baking.
Gardenia breads are baked for about 20 minutes at a temperature
aorund 200 degrees Celsius in the state-of-the â€“art tunnel oven.
The bread to be kept in cooler for about an hour. After that ready to be sliced and pack. Gardenia packaging mechanically before they are automatically sealed with kwil-logs tags that are printed with the use-by dates.Gardenia delight’s unique packaging. It is in an unconventional way which colourful packaging is displayed in an upright position. Besides that, Gardenia was use the G-lock in its packaging. G-lock is a clip that locks the Gardenia bread tightly in its package, sealing in the freshness and makes sure the bread retains its flavour, aroma, and softness. The making Process as below:
After all process has been done, it comes to step 3 which is output. All raw materials have turned to final product which sellable. The company sells its product at supermarket, groceries, convenience, and variety stores. Gardenia is the only bread manufacturer with a unique distribution system. Gardenia is using the Roll-On-Roll-Off (RO-RO) shipping network system. It delivers bread every day, seven days a week, to ensure that consumer get the most freshness bread whenever to be consume. All unsold bread item will be take out and replaced with newly baked ones during every single delivery. It is to make sure the standard of bread
2.4 PEST Analysis
2.4.1 Political factor
Political processes and legislation influence the environment regulations with which industries must obey. This includes items such as government stability, taxation policy, and government regulation. Some of the products which required using produce bread are under control by government. For example, flour, salt or sugar will be the product control by every government. In last past few years, the price of these controlling products had been increase. Indirectly affect all the bakery industry and Gardenia is not be excluded. Price rising of particular product had increasing the production price of bread. Therefore, Gardenia force to increasing the bread price in order to cover the cost. However, the rising prices have resulted in a decrease in total domestic bread consumption. According to Umali Jr., president of Gardenia Bakeries Inc., the prices of bread is depending on the prices of flour. The Gardenia expects continue growing when the political spending and fairly better prices of ingredients.
2.4.2 Economical factor
The economy has an impact on all industries, from the suppliers of raw materials to manufacturing of finished goods and services. Key economic indicators include interest rates, gross domestic, retail price index, unemployment rates and exchange rates. Philippines provide a growing market for premium food product. Economy growth, and especially employment in services sector jobs, is driving demand for more convenient and prepared foods. Gardenia believes that the Gardenia’s success is brought regarding by the dedication and commitment of each member of the Gardenia family. These dedications are leading Gardenia to be the no1 in bread industry. During global economic crisis, the industry had a flat growth but Gardenia continue to grow by two to four percent. Besides that, Gardenia take step further in encouraging micro-entrepreneurship and providing more opportunities for employment while making Gardenia bread more widely available conveniently to customer.
2.4.3 Social factor
Social factor include cultural changes within the environment. Socio-cultural forces will affect the values, beliefs, and lifestyles of a society. Over the past few years, rising levels of obesity, heart disease, and diabetes in the Philippines have rapidly increased consumer interest in healthy and nutritionally food and government interest in promoting healthier eating and lifestyles. Breakfast is important for people for having healthier. According to the Philippine Association of Flour Millers Inc. (PAMFIL) said that 85 percent of Filipinos’ prefer to eat bread instead of rice for their breakfast. Gardenia had formed its own wellness team and offering nutrition counselling to educate the consumers on the true understanding of good nutrition. In this young 21st century, wellness becomes an issue to be considered. Consumers are willing to pay anything that will make healthy and fit.
Developments in technology lead to new products and services and improve how they are produced and delivered to the end user. As the top-bread maker and leader of bread manufacturing industry, Gardenia using state-of-the-art-bread manufacturing plant is capable making 6000 loaves of bread per hour or nearly 150000 loaves per day. It is the equipment whereby almost untouched by human hands. Therefore, it ensures providing safe and best quality of bread product. The new plants keep to current Good Manufacturing Practices (cGMP), and follow the highest globally-accepted food quality and safety standards through the international Organization for Standardization (ISO) and as well as Hazard Analysis Critical Point (HACCP).
2.5 SWOT Analysis
Gardenia is the top-bread maker which a very strong brand name which accept by consumer. Popularity and high customer awareness of the Gardenia brand in the regional markets are attested to by the award of “Category Leader” by Super brands. The company recognized as the most outstanding bread manufacturing in the product category by the consumer Urion of the Philippines (CUP) held yearly during its Annual National Consumer Award (ANCA). This award is a special award which significantly to the general public and attracting key demographic customer groups, built upon a unique philosophy.
Product innovation and development is a key area that helps Gardenia keep up with changing consumer demands. Without media advertising, Gardenia still able target the consumer based on the way Gardenia packaging and the way to be present. Philippines strengthened its distribution network by expanding its retail. Gardenia is the first company which using G-lock to ensure the freshness, aroma and taste of the product. G-lock contains all of the important information that the consumers might need such as product expired date, production line the bread was produced and the batch number. In additional, Gardenia quality and freshness come first. They are strictly for the freshness and quality of bread.
Increases in the cost of raw materials and energy have been remarkable in this recent year. Over the past two years, there have been increase the price pressures especially in price for flour and fuel. Therefore adjusting prices are difficult task for Gardenia. Although increases are kept to the minimum, consumer purchasing power is still low.
Gardenia continuing to looking suitable plant manufacturing location in Northern Mindanao instead of Cebu for its planned expansion in the south. Gardenia is believed on using quality of water supply also one of the issues to produce quality bread. Besides that, Gardenia is fast track the implementation of its US$17.6million bread manufacturing expansion program to meet increased demand of bread. They are investing in another new production line adding another 2000000 loaves per day capacity. Gardenia launch Pedi cart for those who wish to venture in micro-entrepreneurship. It provides opportunity for individuals, families, housewives, others wanting to start a business can have a change venturing in this profitable project .
Unfortunately, the developments are driving the threat of a possible over saturation of the market, as mainstream retailers are beginning offer more variety of bread like the bakery shop or others related Bread Company. Unstable of economical is the major threat for Gardenia. It affects the pricing and the consumption of consumer.
3.0 Strategy Formulation
Gardenia will keep position their product as a high quality and freshness product as well as become consumer focused and customer only choice. Gardenia is focusing the guideline such as “Our Quality Guarantee” and “Customer Deserve the Best”. All Gardenia products are made from the finest quality ingredients to deliver highest value for every day. Gardenia gain the competitive advantages that using high-tech manufacturing machine and carries the quality and freshness guarantee of Gardenia product.
3.1 Core Competency of Gardenia
Gardenias become the bread leader not just because of the high quality product. It become top-bread maker because gardenia have develop the new plant manufacturing machine and keep come out with better formulation of produce bread. Gardenia core products will be very beneficial especially in terms of quality, nutrition, health, hygiene and most important consumer believe and satisfaction. Besides that, Gardenia’s pillars of success continue to be guided by its four ingredients of success namely:
The best quality products made with premium ingredients and good formulas
Using the high tech state-of-art-bread manufacturing machine.
Running on an internationally develop process. High supervision process to monitoring the process.
A dynamic organization made up of people with an untiring passion for consumer orientation.Besides that, Gardenia established a suitable strong brand, which gained attention of the target market.
3.2 Porter Five Forces
3.2.1 The Threat of New Entrants
In these high competitive industry, there are a lot possibility that new competitor enter to the industry. Indirectly, new entrants to industry will lead threat that might decreasing level of customer loyalty and will be highly competition in between. Capital requirement for investment in bread industry in purchasing those raw material and machinery before the entrant could begin selling the product. In additional, certain market share need to be capture for the new entrant before it could reap the necessary economies of scales to allow it with rival firm. Gardenias produce affordable products and enjoy the economies of scales to compete effectively. Gardenias enjoy fairly high product differentiation whereby retailers prefer of brand recognition and customer loyalty. Therefore, it results harder for new entrants to enter the market.
3.2.2The Bargaining power of buyers
Economic recovery has a strong consumption back in this year. The individual does not influence much to bakery industry. Gardenia main buyers are like hypermarket and retailers which pay lots for every year. Therefore, bargaining power is low due to a lots distributor getting resources (bread product) from Gardenia and selling it to end-user. The product for Gardenia is differentiated base on the quality. Buyers are not easy to always find alternative suppliers. In relation to buyer power in Gardenia industry seeks to enhance customer loyalty in focusing existing relationships and trying maintaining in long-term relationships with buyers.
3.2.3 The bargaining power of suppliers
Suppliers of Gardenia have a great bargaining power especially for those monopoly products. For example, flour is the main raw material in producing bread. Due to there are few substitutes to their product. Therefore, the bargaining power will on the other side.
3.2.4 The threat of substitute product and service
The threat of substitute for Gardenia product is high within the industry. Consumer is looking for bread with attracting topping and decoration. For example, those bakery shop usually providing filling bread and attractiveness bread which meet the expectation of customer. Besides that, other industry such as fast food also providing breakfast value which meal serve with bread. It becomes a threat to the Gardenia.
Gardenia’s operates in a highly competitive industry. Some of the competitor are by low priced confectionery producers which are small family-run businesses whereby producing bread that are sold in the neighbourhood which called small-scale production for the local market. On the other hand, a few large competitors such as Golden Donuts, Inc or Red Ribbon Bake Shop, Inc also produce affordable products.
Baking of bread, cakes, pastries, pie and similar “perishable” bakery products