Gaining ground on its rival, one bowl at a time
Formerly an also-ran on store shelves, Wai Wai instant noodles have won market share under Pricha Napapruekchat's leadership.
With the instant noodle market getting saturated and the proliferation of technology disrupting consumer behaviour, Pricha Napapruekchat, the boss of Thailand's second-largest instant noodle maker, believes it's time to shift his firm's business direction.
"The food industry is changing so fast, with consumer concerns about health, safety and high-quality food and an ageing population in Thailand," says the managing director of Thai Preserved Food Factory Co, the maker of Wai Wai instant noodles.
He is the eldest son of Surin Napapruekchat, who co-founded Thai Preserved Food Factory in 1972 along with seven other families. Mr Pricha first joined the company as a financial controller after graduating with a bachelor's degree from Chulalongkorn University.
Thanks to his financial background and his discipline, Mr Pricha gradually climbed the ladder within the company, starting as finance manager in 1978. He took the helm as managing director in June 1998, and since then he has raised Wai Wai's market share to more than 30%.
"During the period I first took leadership of the company, our market share was only 20-22%, far from our competitor [Thai President Foods' Mama] with over 50%," Mr Pricha says. "But we've never given up. On the contrary, this energises us to grow our business. Throughout the period, we've worked hard with our staffers and brainstormed with one another to find clues on how to jack up our market share. Finally, a decade later, the gap of market share between us and our competitor is narrowed."
Mr Pricha has also made efforts focused on innovation and technology. From just a handful of items, he has extended the company's product line to include hoi lai pad cha (spicy stir-fried clams), moo sub tom yum (minced pork hot and sour soup) and tom klong (sour and spicy smoked dry fish soup). These have become flagship products.
With the market environment changing, Mr Pricha, 64, is inventing new business models for Wai Wai and has set a lofty goal to raise the group's sales to 10 billion baht within the next 5-10 years from 6.54 billion baht in 2017.
One new avenue is serving noodles at the company's own Quick Terrace restaurants.
The Wai Wai maker opened its first Quick Terrace restaurant in front of the Wai Wai noodle factory on Phutthamonthon Sai 5 Road to test the market response, with plans to expand into a chain to boost revenue amid a slowing instant noodle market.
After a better-than-expected response, the company plans to open a second Quick Terrace branch at a PTT petrol station in Chon Buri province in May.
Thai Preserved Food Factory is spending 1 million baht to open the second restaurant with space of 100 square metres with 60-70 seats.
"We intend to expand our restaurant not only by our own investment, but also through the franchise system both at home and abroad," he says. "We hope our restaurant will have global recognition within the next five years."
Up to five new Quick Terrace restaurants are to open this year, and the figure is set to reach 100 branches locally and abroad in the future.
A variety of products under Wai Wai, which claims a market share exceeding 30%.
Mr Pricha aims to have Quick Terrace branches in important cities worldwide, including Sydney, London, Paris, New York, Singapore and Frankfurt.
The goal is to increase channels for bringing Wai Wai products to a wider base of customers and augment sales channels such as cash van, online, traditional and modern trade.
The company also distributes its instant noodles via 50 vending machines, mainly at office buildings and factories in Bangkok and the suburbs. The number of vending machines is expected to reach 300 over the next three years.
With changing consumer lifestyles, Thai Preserved Food Factory intends to develop functional, organic and ready-to-eat foods to cater to high demand for healthy products. Veera Napapruekchat, the company's assistant managing director, has been assigned to take charge of the project.
The company recently entered a collaboration with the Agricultural Research Development Agency and the agro-industry faculty of Kasetsart University to develop gluten-free noodles.
Furthermore, the company has been working within the government-initiated Food Innopolis scheme to improve products and remodel a processing plant.
The company is developing organic food products to support the needs of consumers in the form of ready-to-eat meals and seasonings. Organic agriculture, a worldwide growth industry, can be a profitable, sustainable business for agricultural producers interested in going through the certification process necessary to enter the market, Mr Pricha says.
According to a Food Institute report, 50% of consumers are interested in organic products and up to 30% of consumers are willing to pay for it. As well, organic food consumption increases every year by more than 10% in Thailand, Europe, the US, China and Japan.
Mr Pricha says the healthy products co-developed with the university will be launched to the market in the second half of this year.
On top of healthier food, the company is expanding its business to agricultural products.
Mr Pricha plans to join with a famous, yet-to-be-named food company to make high-quality seasonings and spices. This kind of product will be sold both locally and abroad.
The new product line extension will be made under a joint venture company with Thai Preserved Food Factory holding a 51% stake.
"The move is to build our strength in the long term and assist farmers who are willing to grow agricultural products and supply us in order to have a better income and fulfil Wai Wai's business goal to cover both midstream and upstream," Mr Pricha says.
With the restaurant business expansion and the move into agricultural products, exports are expected to make up 30% of the company's total sales, up from 15% last year.
To accommodate future expansion, Thai Preserved Food Factory bought 53 rai of land at Ratchaburi Industrial Estate to prepare for increased production capacity. The company currently runs two factories in Nakhon Pathom province.
"We expect our business diversification to respond well to the health and wellness trend," Mr Pricha says. "More important, it will help our 47-year-old business stay afloat."