Nuts to everyone

World of new opportunities awaits the maker of Koh-Kae snacks and its quirky mascot.

Comfort snacks are everyone's favourites. From savory to sweet, they pick us up when we feel down. Once you start eating them you can't stop, the saying goes, and that can lead to bad eating habits and health problems.

But nuts stand out in the snack world for both their tummy-tickling appeal and health benefits, which translates into huge growth potential, according to Thailand's leading peanut snack maker, Mae-Ruay Snack Food Factory Co Ltd.

"The nut market is only going to grow larger," said managing director Jumpoth Ruayjaroensap. "The trend today is that consumers are more concerned about their health. When they choose their snacks, they opt for ones with healthier ingredients and zero trans fat. This is a great opportunity for our business given that nuts are healthier than other types of snacks."

The Healthy Snacking Survey 2013 by the research firm Mintel suggested that nuts rank number three after fresh fruits and vegetables. Sixty-five percent of snackers consider nuts and seeds healthy, noted the report, and between 2008 and 2011, more than a thousand new nuts products were introduced in the market.

Mae-Ruay, the manufacturer of Koh-Kae brand, has set its sales target this year at 2 billion baht, up from 1.65 billion last year. Growth of 21% is not a stretch for a company that has seen its sales rise 174% since 2009.

Though it is most famous for its fresh peanuts with flavoured coverings, the company also offers the premium line Koh-Kae Plus for health-conscious consumers, and Nelie brand potato crackers. The Koh-Kae Plus line includes almonds, cashew nuts and pistachios while the original Koh-Kae line contains only peanuts.

Founded half a century ago, Mae-Ruay is by far Thailand's leading manufacturer of coated peanut snacks with an 85% share by value in the Thai market, according to the ACNielsen Retail Index.

Other similar products in the market are Marucho, with a 10% share, followed by Khao Shong (2%), Randy Nut (1%) and others (2%).

Nelson Howe, the 79-year-old American actor who soared to fame showing off his Thai skills on YouTube, has also been enlisted to help the Koh-Kae brand.

The peanut snack market in Thailand is estimated to be worth 3.12 billion baht, third behind potato chips (9.34 billion) and extruded or starch-based snacks (8.44 billion).

Mae-Ruay sources some of its peanuts domestically from Sakhonnakhon Mae-Ruay Agriculture Co Ltd. It works closely with Khon Kaen University to focus on researching and growing peanuts with no usage of chemicals. However, its main source of raw materials is Tangshan Runze Cereal Oils and Foodstuffs Co Ltd, located 180 kilometres north of Beijing in China.

According to the Neilsen Global Snacking report, nuts and seeds remain popular option for consumers. It said 41% of global respondents reported having consumed nuts and seeds in the past 30 days, ranked ninth among all food types. Consumption is higher in Asia Pacific, ranked the sixth with a 49% positive response.

Having achieved fame at home, the Koh-Kae brand has also been making inroads abroad. Starting from Hong Kong, the company now has sales agents in 20 countries and exports to 50 countries in all.

However, Mr Jumpoth said exports have been slipping and need a fresh push. "We once reached 30% [of total revenue] and we aim to boost our exports more in the coming years," he said.

Total export sales peaked at 350 million baht, he said, but dropped to 200 million last year. China is the biggest export market, accounting for more than 50% of total volume.

To spur its international sales, Koh-Kae last year released a perky TV show Bangkok 1st Time, starring the 79-year-old American actor Nelson Howe, who was already a local YouTube sensation for his comical take on Thai culture.

"We want to create awareness of the brand and cater to our foreign customers," said Mr Jumpoth.

In addition, the company has expanded its Koh-Shop to six branches nationwide, selling collectable items from T-shirts to bags and figurines. The customers, he says, are mostly Chinese tourists.

Aiming to be Asia's leading snack manufacturer, the company places great importance on research and development (R&D) and constantly tailors its offerings to remain attractive in the competitive snack markets around the world.

"We need to keep up with the current demand and know what our customers want," said Mr Jumpoth. "For example, some flavours such as Siracha Chili and Thai Green Curry may not be popular in Thailand, but are very popular in the European market."

"Our aim is to be the 'King of Nuts' -- and not only for peanuts."

In his view, the name Koh-Kae -- literally translated as troublemaker -- hints at fun and excitement, which has kept the brand rolling for 40 years.

"I think our logo, our slogan and our brand image are very different. It's not stagnant. It doesn't stay still," he said. "On top of that, the brand mascot used since the first day has proved to be very attractive among our consumers."

The Koh-Kae mascot is a cheeky-looking character in a white martial arts robe, slippers and sunglasses. "The design very well portrays our brand's notion as a perky rebel and it can easily capture anyone's attention," said Mr Jumpoth. 

THE FIRST PEANUT

Mae-Ruay company traces its roots back to 1964 when Mr Jumpoth's parents, Chookiat and Jiraphorn Ruayjaroensap, began producing fried peanuts and shrimp crackers.

"We started from nothing," he said. "My father used to drive a songtaew and was a street vendor selling soymilk and fried nuts."

In 1976, after a lot of hit-and-miss experimentation, the first crunchy coconut-cream shell peanut under the Koh-Kae brand was born and quickly grabbed consumers' attention.

A year later, the company needed to expand to mass-produce its products in response to the growing demand. The 12-acre factory currently employs about 900 people.

Though the snack looks very similar to Japanese-style peanut snacks, known as cacahuates japoneses in Spanish, popular in Mexico, Brazil and the United States, Mr Jumpoth says Mae-Ruay was the first entrant in the field.

To maintain the freshness of its products, the company is very attentive to the manufacturing processes -- from choosing the best quality materials, to having the skilled and experienced staff to pick nuts manually.

All peanuts go through strict quality control and are thoroughly screened for aflatoxin. The nuts are then stored in a 2,100-square-metre refrigerated space. "I'm confident that our company utilises the best technologies available and we will continue to invest in innovation," he said.

About the author

columnist
Writer: Tanyatorn Tongwaranan
Position: Asia Focus Writer