Eu Yan Sang wants a bite of the premium ice cream market

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From left: Sabah Froz chairman Datuk Nasir Yeo, Eu, Sabah Chief Minister Datuk Seri Musa Aman, Sabah International Dairies chief executive officer Datuk A Arulpragasam and Sabah Froz general manager Johan Nasir Yeo launching the goji berry ice cream earlier this month.

KUALA LUMPUR: Eu Yan Sang Malaysia (Eu Yan Sang) has teamed up with Sabah International Dairies Sdn Bhd (SID) to churn out cups of healthy goji berry ice cream to take on the premium ice cream market in Malaysia.

The traditional Chinese medicine firm, a wholly-owned subsidiary of Singapore-listed Eu Yan Sang International Ltd, will be pushing out the cups of “East meets West” creation via its joint-venture company with SID, Sabah Froz Ice Creamery Sdn Bhd (Sabah Froz).

Eu Yan Sang owns 49% of the JV company, while SID, a 30-year-old dairy company based in Kota Kinabalu, Sabah, owns the remaining 51%. The team-up between the two will see Eu Yan Sang focusing on brand building and marketing in West Malaysia, while the latter handles production for the company and will also distribute to East Malaysia.

The new venture, which will enable the 135-year-old Eu Yan Sang to tap the younger market, is expected to draw in RM500,000 yearly revenue in its first year, Eu Yan Sang chairman Datuk Anne Eu told The Edge Financial Daily recently.

Besides goji berry, there are other flavours  — Sugut Tong Kat Ali and  the more run-of-the-mill ones like Beaufort Vanilla, Tawau Chocolate, Ranau Teh Tarik, Tenom Coffee, Api-Api Bandung and Libaran Mango.

Like their namesakes, the ingredients are sourced locally. For example, the vanilla pods used for Beaufort Vanilla are from Beaufort, the cocoa for Tawau Chocolate is from Tawau, and Tenom Coffee uses coffee beans from Tenom.

Introduced to the public in early September, these ice creams signify a step into the dessert market, which is often perceived as anything but healthy, but Eu is confident that this product diversification will not affect the perception of Eu Yan Sang as an integrated healthcare and wellness brand with a strong foundation in traditional Chinese medicine.

Unlike other start-ups, Sabah Froz, set up in 2012, already has a signature product; its goji berry ice cream bagged the Best New Ice Cream award in the International Dairy Federation Dairy Innovation Award 2011.

The product is also the pride and joy of Eu, who lauded it as an East — Chinese medicine — meets West — wholesome milk — creation, adding that the judges of the competition had noted the ice cream’s health “function”.

“Normally when you have ice cream, you know it is bad for you. But this ice cream has a function as goji berries are well-known in the West as an anti-ageing herbal berry. For the Chinese, it is popular as an eye-nourishing herb,” she added.

Presently, the premium ice cream market is dominated by brands like Haagen Dazs and Baskin Robbins: Haagen Dazs has 12 shops nationwide and ties up with grocery giants like Tesco, while Baskin Robbins has 82 shops nationwide.

But Sabah Froz is determined to make a spot for itself in this market with its unique flavours and a competitive pricing strategy; 100ml of goji berry ice cream and Sugut Tongkat Ali will cost RM9, while the other six flavours will be priced at RM6.

The company has spent more than RM1 million on setting up the production line and freezer in Kota Kinabalu and its general manager, Johan Nasir Yeo, said the current production capacity is 100 cups of 100ml ice cream a day.

Johan said the company is also positioning itself as an artisan ice cream with premium quality, including the use of fresh milk from free range Hotein Friesien cows from farms at some 2,000m above sea levels on the eastern range of Mt Kinabalu, as opposed to the mass-produced ones that are sold cheaper.

Eu added that she expects Sabah Froz to become profitable from the second year onwards, and then it will expand outward into the Southeast Asian market.

This article first appeared in The Edge Financial Daily, on September 29, 2014.