Milo (and Nestlé) pays back

“Milo” is a brand that many Filipinos remember with fondness dating back to childhood. My own childhood memories consist of sneakily scooping Milo from the can into a cup and then sitting in front of the TV set, spooning it into my mouth, together with ice-cold water that tasted so much better than if the two had been mixed together.

My Milo habit must have rubbed off on my daughter. When I visited her in New York earlier this year, on her list of bilin was a pack of Milo, and I decided to surprise her by bringing two big packs, one of them a variant developed for adults. Like me, she loves eating Milo raw, seated in front of the TV. Just a few days ago, she posted on Facebook that she had run out of Milo and asked if anyone knew where she could source the choco-malt drink in the jungles of Manhattan or Harlem.

A few years ago, we discovered a Singaporean restaurant in the commercial center of Cubao that served an outstanding Hainanese chicken. But what drew me to it was their “Milo dinosaur,” an iced drink concoction made up of frozen Milo and milk, with a sprinkling of Milo powder on top. Sadly, the place closed some years ago, and while other Singapore-Malay eateries also serve the “Milo dinosaur,” they can’t compare. My mouth waters just thinking about it now.

Yes, they have heard about the “Milo dinosaur,” acknowledged Sherilla Bayona who, as head of the Nestlé Philippines Beverages Business Unit (including Milo, Nestea and Nesfruta), oversees the performance of Milo in the local market. But the company itself has nothing to do with its creation or marketing. But have the sales of the “Milo dinosaur” impacted on Milo’s sales here? Jacques

Reber, chair and CEO of Nestlé Philippines, seemed bemused by the query. “No,” he said firmly, smiling.

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Maybe he was too modest to say so, but there’s really no need to push Milo in the local market. “Penetration,” which in marketing refers to the number of households reached by a product, is over 90 percent for Milo in the Philippines. “Not many brands can make that claim,” added Reber.

Indeed, the Philippines seems to be fertile ground for all Nestlé products and not just for Milo. Last year, Nestlé sales here totaled P121 billion, up from P116 billion in 2014. And, at midpoint of this year, Reber said he is optimistic that the company, which is over a hundred years old in this country, will exceed last year’s figure.

Currently, too, Nestlé Philippines ranks among the top five corporations in the country, and sits at No. 8 among Nestlé markets worldwide. The Philippines is the second biggest market for Nestlé in Asia, next only to the behemoth China, and is thus the biggest market for Nestlé in Southeast Asia (even if Singaporeans apparently invented the “Milo Dinosaur”).

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The company pays back Filipinos’ loyalty to its products and brands by investing in turn in the economy, as attested by Reber and other Nestlé officials (including SVP for corporate affairs Ernesto Mascenon) in a press con yesterday to announce its P2-billion investment in a Protomalt plant for Milo.

Undergoing construction right now is a plant in Lipa, Batangas, that, said Reber, reflects the company’s “strong confidence in the continued growth of the country’s economy, consistent with its long-term mission of nurturing generations of Filipino families and contributing to nation-building.”

Construction of the plant began in December 2015 and is expected to be completed in October 2017.

At present, Protomalt, an ingredient in Milo that gives it its distinctive taste, is sourced from Singapore, where the Nestlé Group’s biggest malt plant is located. Other malt plants can be found in Nigeria and Australia, since Nestlé makes it a point to manufacture the Protomalt itself to ensure consistent quality wherever Milo is sold.

Once the Batangas plant is up and running, it will use barley and cassava as major raw materials for the production of the malt extract. And while the cassava will initially be imported from Thailand, Nestlé is even now talking with cassava farmers to see if they could produce enough of the crop to meet the factory’s needs.

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This, said Mascenon, is the “value added” to the future plant—contributing to the growth and development of the agricultural sector. Already, Nestlé has started to qualify cassava farmers in Mindanao, and is hoping to find more farmers (or maybe farmer cooperatives) who will take up cassava farming to supply Nestlé’s requirements in the future.

Indeed, this is an approach Nestlé has already taken: working with coffee farmers, for instance, to supply the beans for Nescafé and other coffee products.

Mascenon said the company expects the malt plant’s capacity to increase considerably in three to four years, with potential for exporting some of its output to other Nestlé companies abroad.

In the last five years, Nestlé has invested close to P14 billion in the country, said Reber, revealing that he expects even more investments to come in the next five years, with demand growing and capacity increasing.

Aside from the Protomalt plant, Nestlé has five factories in the country: Cabuyao in Laguna (infant nutrition products, milks and liquid beverages), Cagayan de Oro (coffee and powdered milk drink), Pulilan in Bulacan (ice cream and fresh dairy), Lipa (powdered beverages and breakfast cereals), and Tanauan, Batangas (coffee creamer and powdered milk drink).