Mamee stands strong after 5 decades
11 Jun 2024
MAMEE Double Decker (M) Sdn Bhd, a stalwart in the Malaysian food industry for over five decades, has doubled its business revenue and profit in five years.
Third-generation CEO Pang Hee Ta shared insights into the company’s growth and evolving business strategies.
Founded in 1971, Mamee had built a substantial annual revenue of RM780 million by 2019. The Melaka-based brand is currently the leading Malaysian brand for instant noodles and noodle snacks.
“From 2019 to 2023, Mamee managed to double the business in both revenue and profit, so we can get the same sales that we took 48 years to build,” Pang told The Malaysian Reserve (TMR) in an exclusive interview.
Now standing at RM1.5 billion in revenue, Mamee aims to double its revenue to RM3 billion within the next five years, driven by its expanding presence in global markets.
One of the pivotal strategies that contributed to this exponential growth was a transformation in Mamee’s business model, particularly regarding its global expansion approach.
Traditionally, Mamee, like many other companies, participated in trade shows to attract international buyers, yet Pang found that this method proved unsustainable.
“So, what we did was to travel to Europe and the US predominantly to look for local partners who had established networks and relationships with major retailers there.
“We operate as a single unit. They handle the front-end sales, while we manage the back-end manufacturing. We’re all in the same boat, working together seamlessly,” Pang said.
This partnership allowed Mamee to understand better and cater to local consumer demands, leading to significant growth in the US and European markets.
Driving Sustainability with Premium Healthier Products
In response to evolving consumer preferences, particularly among millennials, Mamee has shifted its focus towards sustainability and better-for-you products.
Better-for-you products refer to healthier items that are low in fat, salt, and sugar but high in fibre, minerals and vitamins. The term has also evolved to include specific categories such as lactose-free, plant-based, vegan, organic and low-calorie options.
Influenced by greater Internet exposure and higher disposable incomes, millennials sought more than just good quality at a low price.
This demographic shift has pushed Mamee to innovate beyond traditional snack offerings.
Pang noted that modern high-value companies are the ones that can sell an emotion on top of a physical delivery, highlighting the need for brands to connect with consumers on an emotional level.
This insight led Mamee to invest in better-for-you products that meet the growing demand for healthier food options.
In 2020, Mamee has partnered with the US-based Good Crisp Co, a brand known for its gluten-free, non-genetically modified organism (GMO) products made with a variety of healthier ingredients.
Another value Mamee added to ensure it delivers more than just physical products is by investing in start-ups and leveraging their production capabilities to streamline its supply chain.
By doing so, costs are lowered, allowing Mamee to channel resources into improving product quality.
“Young start-ups are also very good at understanding consumers, and they are able to innovate at a very fast pace,” Pang added.
Pang said every month, Mamee ships about 50 containers to the US for Good Crisp’s product alone.
Mamee also invested in The Golden Duck Co, a Singaporean company popular for its innovative snack offerings.
These collaborations allowed Mamee to tap into niche markets and cater to diverse consumer needs across different regions.
The company’s transformation is not just about adopting new strategies but also about building on its strong foundations.
Over the years, Mamee has built a reputation for offering high-quality products at affordable prices, a winning formula that has fuelled its success for decades.
“Back in my grandfather’s era, commodity companies were at the top, but nowadays, to be a leading company, it’s not just about selling the product effectively; you must offer added value,” Pang said.
Therefore, he believes the company needed to balance maintaining its legacy of affordability with its new focus on premium products.
“We don’t want Mamee or any other Malaysian company to be just known for good products at affordable prices, but to also be the leaders in the better-for-you nutritional food segment as well.”
This dual approach ensures that Mamee remains competitive in both the mass-market and premium segments.
Mamee’s journey towards global recognition was marked by a keen understanding of modern consumer needs and market dynamics.
The company aspired to be a leader in meeting future consumer demands through three core areas; sustainability, better-for-you products and premium indulgence.
Mamee is committed to sustainability, with significant investments in environmentally friendly practices like utilising fully recyclable packaging, adopting clean energy sources like solar and natural gas, and implementing rainwater harvesting in its factories.
These efforts are crucial in addressing the concerns of environment-conscious consumers, especially in markets like the US, where questions about carbon footprint and environmental impact are increasingly prevalent.
“We want to be known as leaders in understanding the future needs or what the modern consumer wants.
“The modern consumer’s preference for healthier options has driven Mamee to innovate with products that are free from flavour enhancer monosodium glutamate, gluten and GMOs,” Pang said.
A prime example is The Good Crisp, which produces potato chips and cheese ball snacks without artificial additives and has grown significantly, reflecting the rising demand for healthier snack alternatives.
By grasping the premium market segment, the company can leverage its manufacturing capabilities to produce both mass-market and premium products, optimising efficiency and expanding market reach.
“We can effectively compete in both the masses and the premium market if we build the right capabilities behind it,” he added.
Addressing Supply Chain, Sustainability Challenges
Mamee’s expansion has also necessitated a strong approach to managing supply chain complexities and disruptions.
Its strategy revolved around three key pillars — technological integration, diversified sourcing and localised production.
Upgrading to advanced systems like systems applications and products helped Mamee to manage the intricate logistics of sourcing and production.
This would reduce human error and enhance efficiency in tracking and replenishing raw materials.
Pang said by diversifying its sources of raw materials, Mamee mitigated risks associated with geopolitical instability and supply chain disruptions.
For example, he said sourcing potatoes from India, which is geographically closer to Malaysia, helps in reducing logistical challenges and potential supply shortages.
“Diversification of supply sourcing, as well as using technology, will be the core areas that we focus on,” he added.
To further streamline operations and reduce carbon emissions, Mamee plans to establish factories in Mexico and Spain by 2026.
These facilities would serve regional markets in North America, South America and Europe, thus reducing the need for extensive shipping from Malaysia and minimising the environmental impact.
The government through the Investment, Trade and Industry Ministry and agencies such as Malaysian Investment Development Authority have also worked with Mamee to push the company to the global stage.
Additionally, Mamee’s commitment to environmental, social and governance principles is integral to its operations.
The company prioritises sustainable practices not just to comply with regulatory requirements but because it believes in doing what is right.
Pang said Mamee is currently working towards making its packaging fully recyclable, expected to be achieved by 2025 or 2026.
Mamee is also deeply involved in local community initiatives. In Melaka, the company collaborated with the state government to provide free dialysis treatment through Yayasan Toh Puan Zurina.
Additionally, Mamee invested in improving living conditions for its employees and partnered with local universities for industrial training programs.
“We put a lot of effort into ensuring that our people are taken care of,” Pang said.
Future Outlook
Looking ahead, Mamee aims to continue its growth trajectory by further enhancing its brand and product offerings.
“Ultimately, we realised that if we continue to focus only on pricing and quality, we will become a commoditised business,” Pang said.
The company plans to build capabilities around consumer understanding, innovation and brand building to stay relevant and competitive in the future.
Source: The Malaysian Rerserve
