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Q&A with Gardenia President Simplicio Umali on Defensive Strategy

Q&A with Gardenia President Simplicio Umali on Defensive Strategy

Q1: One of your competitors was first to launch a sugarfree bread variant in 2012, which captured a significant 15% market share in the wheat & health bread category. How did Gardenia protect itself from this competitive attack?

A: Gardenia responded by studying further the consumers to understand their behavior and to know what they truly desire. We found out that consumers crave for healthy, low calorie bread products without depriving themselves of good taste.

Gardenia believes that it will be misleading to claim a sugarfree bread as bread is made of complex carbohydrates and when we eat bread, our stomach breaks its complex structure into smaller pieces, so small that it becomes the same simple structure as sugar. Sugarfree bread becomes sugar in the bloodstream. Marketing a Gardenia sugar-free bread was thus not a good long term strategy for us.

We decided to launch the Gardenia High Fiber Wheat Raisin Loaf instead.

Q2: What was the insight behind launching Gardenia High Fiber Wheat Raisin Loaf Bread?

A: We decided to offer a better alternative to competition but will not mislead consumers. Instead we wanted to create awareness and elevate the level of consumer satisfaction in terms of taste with health benefits.

Based on our consultation with diabetologists, high fiber products are very beneficial for people who are avoiding high sugar content foods. High fiber foods are useful in lowering blood cholesterol, managing obesity, cardiovascular diseases and diabetes mellitus, and preventing colon cancer. However, most high fiber products need improvements in its taste and flavor as these tasted like paper.

Gardenia moved away from the sugarfree concept, and focused on high fiber bread products with delicious flavor. The Gardenia High Fiber Wheat Raisin Loaf has both the health benefits and sweet yummy taste consumers look for. It is high in fiber that may promote good digestive health and may help in proper weight management. With the addition of raisins, it is also good source of anti-oxidants that may help prevent tumor formation in the body.

Q3: Can you share the result of your defensive move?

A: This product outsold all the sugarfree breads of all our competitors.

Q4: From a defensive standpoint, I noticed market leaders that were surprised with competitive attack tend to counter with more new products to occupy white spaces in the market. Is this also true of Gardenia?

A: Yes. With the huge success of our High Fiber Wheat Raisin Loaf, we also introduced the Wheat Cranberry Loaf, which has the health benefits of fiber and cranberries, plus the sweet and tangy taste. Aside from that, we also have the Slim & Fit Wheaten Bread which is the only bread in the market that contains L-Carnitine that helps the body turn fat into energy. It’s also a good source of fiber that may help in weight management and in reducing the risk of heart disease. This sealed Gardenia’s foothold and dominance in the health bread sub-category.

Q5: What key lessons can you share about defensive marketing?

A: It is not the role of market leaders to discredit competitors, thus as a defensive marketing strategy, we came up with innovative products and hyped on the merits of our products instead of rebut claims of competitors. We attacked directly with the launch of our High Fiber Wheat Raisin Loaf, then we immediately followed it by introducing other variants. With the product innovation and differentiation we did, sugarfree consumers shifted to Gardenia’s healthy indulgent products. With the continual improvement we are doing, we created new category which resulted to successfully attracting new and existing markets.  With this, we are able to maintain our 75% leadership position in the wheat & health bread market category.

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Josiah Go

About Josiah Go

Bestselling author Josiah Go is the Chairman and Chief Marketing Strategist of Mansmith and Fielders, Inc. (the leading marketing and sales training company in the Philippines), President and CEO of Waters Philippines (the market leader in the direct selling of premium health durable products in the Philippines) and President and CEO of PT Noah Health Indonesia. He is Chairman / Vice Chairman / Director of over a dozen companies.

2 Comments

  1. Dear Prof. Go:

    Gardenia’s saying that they did not produce Sugar free breads because it is misleading is simply not true. To set the record straight, they came out with No Sugar Added under its primary brand, “Gardenia” and Sugar Free Breads under its flanking brand called “Neu Bake”. How can they now turn around and attack our product as saying it’s misleading when, in fact, they came out with their own versions before?

    Having a No Sugar Added or a Sugar Free White Bread (produced by GARDENIA) is in fact misleading, that’s is the very reason we never came out with one, in the first place. It is our competitor who introduced those products into the market as a knee-jerk reaction to our growing sales. What is more unfortunate is to lower the serving size into one (1) slice just to be able to claim the bread as either No Sugar Added or Sugar Free which is highly improper from a nutritional standpoint. You may like to ask your friends in the field of health and nutrition about it and not just rely on my words.

    Regards,

    Walter Co
    Walter Bread

  2. Dear Prof. Go:

    Greetings!

    This has reference to your interview article with Mr. Jun Umali of Grdenia published in Philippine Daily Inquirer last December 26,

    We are humbled that our product, Walter Sugar Free Wheat Bread, at one time or another, captured 15% of the wheat bread market. Maybe, our product just caught your attention in 2012 but we launched the highly-successful ” Walter Sugar Free Wheat Bread” as early as 2005. For your more information about our company and products, you may want to visit the link Walter Bread, the healthy bread on everyone’s lips

    image

    Walter Bread, the healthy bread on everyone’s lips
    Click to hear the message.
    View on http://www.walterbread.com

    Preview by Yahoo

    Just in case it escaped your attention, as soon as Walter Sugar Free Wheat Bread was selling well, Gardenia came out successively with NO Sugar Added 8-Grain Loaf and their own version of Sugar Free Wheat Bread with a serving size of only 1 slice (which is out of the norm because the serving size of loaf bread is 2 slices. Otherwise, how can one make a sandwich?). Unfortunately for them, those products did not perform well and had to be pulled off the shelves.

    Our products passed the rigorous nutritional and labeling standards set by “The Biggest Loser — Pinoy Edition” UK Licensors to become its Premiere Season’s sponsor. Both of us know, how strict the Europeans and I need not say more. The second season was to be sponsored by another company with a bigger budget. Since, ther was no bread sponsor for the 2nd season, it’s not unreasonable to surmise that their products did not pass the stringent criteria set by The Show’s Franchisor.

    Should you have questions, please feel free to contact yours truly.

    Cheers to A Healthy Lifestyle.

    Walter Co
    President
    Creative bakers Co., Inc.
    Makers of Walter Health Nutrition Breads

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