Two sisters succeed in the Thai desert industry
By Jon Fernquest[Note: Appeared earlier as a much longer and more difficult to read Bangkok Post article]
Jao Juk is one of Thailand's best-selling soya-based
desserts. It consists of a sweetened curd made from
a mixture of soya milk and cow's milk (25%, 200ml) and retails
for 20 baht. The dessert can now be found in over 3,000 convenience
stores in 33 Thai provinces, but it wasn't always this way.
Two sisters, Yanee and Srisomboon Chawanisakul, began this successful
business over eight years ago.
The two sisters got their business idea from a delicious home-made dessert made by a bank employee in Phetchaburi. The bank employee sold the desert after work as a sideline to supplement their bank salary.
The two sisters approached the creator of this delicious dessert and together they agreed to invest in, mass-produce, package and market the dessert together. The two sisters had to work hard in the beginning to get the new business going. They started visiting retail stores but only a few were interested. Store-owners who took the dessert on consignment often refused to pay up later.
Interest in the dessert began to increase when they rented a small stall at a home-and-garden fair in Bangkok hosted by a five-star hotel. They caught the interest of people attending the fair by handing out free samples. By the end of the fair, their dessert was sold out.
In the food business quality control is important. Changing to higher quality packaging and getting government approval for their food product were important steps in developing a broader market for their product. The packaging was changed from plastic wrappers to more convenient plastic tubs with lids. After they obtained all the necessary licences and bar codes from the Food and Drug Administration (FDA) distributors were a lot more willing to carry their product.
Dessert products have a short shelf life and can easily spoil. If, let's say, a driver turns off the refrigeration system in their truck before they reach the store and the shipment of dessert spoils, this creates problems with store owners at the end of the supply chain. This makes it essential to maintain storage standards and be constantly thinking about how to improve quality.
Marketing was a continual problem to overcome. People just didn't know that their dessert brand Jao Juk existed or what it tasted like. At first the two sisters spent a lot of time selling the product door-to-door, but this trial-and-error approach was time-consuming. Renting space at trade fairs proved to be much more effective. Once people sampled and tasted the dessert and decided they liked it, the idea spread quickly by word-of-mouth. People came back to buy more. Some bought as many as 40 to 50 tubs a day to share with friends and relatives. In the end, booth sales were the best way to increase brand awareness.
Their big break came when a large oil company decided to start selling their dessert at gas stations around Bangkok. This gained them a much wider exposure for their product. If people wanted to buy the dessert, it was a simple matter of going to anyone of these gas stations. As distribution expanded, their dessert could be found on the shelves of more and more large shops, supermarkets, and convenience-stores in Bangkok. The two sisters eventually quit their jobs as a chemist at a plastics factory and an accountant for a cosmetics company to work on their business full time. Most of their sales were in Bangkok so it made sense to move their production facilities to Bangkok so they moved to Thawi-Watthana district.
Starting small and focusing on one product to begin with meant they didn't have to borrow money for their business. Only after they achieved some success did they expand their product line, first adding a new variety called Jao Juk with a fruit-salad topping. Later they launched two new cheaper varieties with lower cow's milk content. Mr Jack was a snack food targeted at the school market retailing for 15 baht. Jao Joi was targeted at factory workers and retailed for 10 baht. The two sisters took great efforts to keep the recipes of each new food product they launched top secret.
Vocabulary:
soya-based - made from soya beans
(soybeans), an important source of protein in many foods (See Wikipedia on
soybeans)
a curd, curds - when milk turns thick and
white and sour when not refrigerated (See Cottage
Cheese in Wikipedia)
retails for 20 baht - sells for 20 baht
convenience stores - small local stores that are
easy to use (like 7-11)
home-made - made at home, not bought
from a store (implies higher quality, more care in preparation)
a sideline - an extra job (not your main
job)
supplements - adds an extra amount
took the dessert on
consignment
- the store does not pay in advance for the desert, only pays for them
as they are sold
pay up - pay the money you owe
someone
a stall, a booth - a area with a table to show
and sell your product at a trade show, fair, or other big public event
sold out - sold everything, not more
left
quality control - making sure a product meets
customer requirements, eliminating product defects (See Wikipedia
on quality control)
convenient - very easy and useful
tubs - small plastic containers
(containing yogurt for example)
a bar code - the black lines on product
packaging that identify the product (See wikipedia)
Food and Drug
Administration (FDA)
- the government agency that regulates food and medicine (they made
sure the food and medicine is safe to use)
short shelf life - spoils quickly on a store
shelf (outside of a refrigerator)
spoil - go bad, rot, the food
cannot be eaten
door-to-door - going from house to house
in a neighborhood to interest people in your product
a trial-and-error approach - learning from mistakes and
improving as you do it more and more
trade fairs - large shows where companies
in an industry display their products
word of mouth - advertising in which
information spreads as people tell it to the people they know (See
Wikipedia on word of
mouth and word
of mouth advertising)
booth sales - sales from a small table or
booth at a trade show, fair, or big public event
brand awareness - when people know about your
product and its name
a big break - a special limited
opportunity to make your business into a success
exposure for product,
product exposure
- potential customers see, try, and know about your product
a potential customer - a possible customer in the
future
a product line - the range of different
products sold by a company
expand product line - increase the range of goods
sold
targeted at a market - try to sell, try to build
customers in this market