Zest-O banks on higher consumer spending

MANILA, Philippines - Homegrown beverage manufacturer Zest-O Corp. is banking on increased consumer spending to grow its sales here and abroad.

The company has allotted around P250 million for every manufacturing plant it plans to establish in Indonesia, China and Myanmar to expand its international operations, its top executive said.

“We are expanding this year. We are continuing our expansion plans for Zest-O and RC Cola,” said Zest-O chairman Alfredo M. Yao.

This will allow Zest-O, which claims the leadership in the domestic beverage segment, to benefit from robust consumer spending and post double digit sales growth this year, Yao said.

Zest-O is the company behind juice drinks Zest-O, Plus!, Sun Glo, Big 250 and Choc-O. It is also into instant noodles, carbonated softdrinks, ready to drink iced tea, powdered juices, condiments and personal care.

Aside from local operations, the company is training its eyes abroad to take advantage of the big population in Asia.

“This year, we will be doing overseas (expansion),” Yao said.

Specifically, Zest-O wants more access to consumers in Indonesia, China and Myanmar through manufacturing plants, Yao said, adding that the benchmark investment for every plant is around P250 million.

Yao said investments in Myanmar will be more than P250 million as the company will also build a bottling plant for RC Cola. RC Cola is franchised by the Yao family from Royal Crown Cola International.

Zest-O already has a production plant in the Middle East and Indonesia. The company exports its products to other markets in Asia. In 2008, Zest-O acquired Arab Beverages Establishments, a producer of fruit juice in doy packs and based in Dubai, for P600 million.

So far, overseas operations account for just around 10 percent of Zest-O’s business.

Yao said the company will have to change the packaging and flavors of its products as it taps the 200 million population of Indonesia and the 70 million people in Myanmar.

Zest-O pioneered the first-ready-to-drink juice drink in flexible foil pouch or the doy pack system in the country.

In 1981, Zest-O was established as Semexco Marketing Corp., a privately owned family corporation that is into the manufacturing and distribution of food products. It changed its name to Zest-O in 1995 following the success of its flagship brand.

Annual sales of Zest-O hit around P3 billion in 2007, up from roughly P2.6 billion in 2004.