YNCG Case Competition:

Group 2
Felix Ivan Taslim Anders Ooi Liew Kai Shiun
Yee Herng Dev Desai
Executive Summary – The next step for Udders

Should Udder Goodness move into Singapore?

If so, how?
QUESTIO If not, what can they do to remain profitable?
N

Consumer Sentiment on
Decreasing Profits Increasing Variable Costs
Sugary Products
CHALLEN
GES
Short Term Punch Long Term Pull
Strategic Partnerships Innovative Piggybacking with
Capitalizing on Trends Subscription Model Market Giants
SOLUTI
ON
T h e “ Group 2” S t r a t e g y
Building the next step in Udder’s long-term strategy as a global dairy supplier and
distributor by adopting a growth-maximizing and profit generation mindset.
IMPAC
T
1
Challenges
Stagnant Revenues in New Zealand decreases profitability, caused by unsustainable earnings.

1. The revenues of Udder Goodness over the last

couple of years have been stagnating (Figure 1)

2. Demand boom at the start of the launch of

flavored milk, which is not sustained

3. Growing backlash against sugary drinks as

awareness on childhood obesity becomes more
widespread

Figure 1 Udder Goodness’ Revenue (in millions of NZ$)

Considerations for Market Entry

• Hypothesis: Profit earned

by entering the Singapore
Market > expansion/
modifying current business
in New Zealand
Insights
Strong product lines and brand image; A possible way out, fueled by increasing demand from SEA

Support Oppose

Strengths Weakness
- Strong product line (organic + consumer preference) - Products are priced more highly, (overall organic production
process) unable to compete with cheap milk sellers
- Scaling up supply chain ('supplying 12 stores to 543 ') --
supermarkets/ retail stores
Internal
- Extensive network of 20 dairy farms in NZ (Quality control)

- Strong brand image leveraging sustainability

Opportunities
- Lack of milk brands with fully transparent (pasture-to-
plate) process,, + drive among consumers towards
sustainability, 1
External - Increasing demand for dairy products in SEA region (driven
by younger audiences) -- e.g BBT Trend 2
Threats
- Decreasing revenues despite high customer brand
awareness, and high recurring customers (potentially
shifting/ shrinking target market)
- economic downturn causing switch to cheaper milk brands
as alternative

1, Appendix 1
Efficient supply routes, appealing demographic, and positive market growth paints an optimistic outlook for
entry into Singapore

Income Budding
Proximity
Demographic Opportunities

Revenue in millions of USD

Current Supply Routes allow for Our Products prices are in line with the Forecasted increase in consumption of
greater cost-efficient shipping to SEA income demographic of Singaporeans milk and market revenue
over any other region (59.8%)

APL (2022), Seedly (2022), Statistica (2022) 3

 Positive revenue growth for both Milk and Butter in Singapore encourages entry

• Butter: Production (e.g cake makers, bakeries) + Retail consumers

• - Revenue in the Butter segment amounts to US$29.89m in 2022. The market
is expected to grow annually by 6.57% (CAGR 2022-2027)1
• - volume consumption has seen increasing trend = more people using

• Market Size for Milk in Singapore:

1. 5,995,117 as of Oct 14 2022
around 3 million of people between 18-65
52% people between age 18-65 drink cows milk
of the 52%, 28% drink flavoured milk, 28% drinks full cream milk(assuming organic is full cream)
=436800 people drinking flavoured milk
2. Frequency of drinking: Average Cow’s milk consumed per week:
12% x 700 + 12% x 1050 + 29% x 1800 + 6% x 2100 + 35% x 2500 + 6% x 4200 = 1985ml/week = 2 cartons of 1L / week
3. Average price of 1L milk in Singapore = $3.550/L

• Total market
APL (2022), share
Forbes = 436800
(2019), x (2020)
McKinsey 2 cartons x $3.550 = $3,101,280 SGD 3
Gaps in Singapore competitive landscape for milk shows gaps in market for
entry.

Competitor Analysis Chart, MILK

• - Most milk producers sell low-cost products (packet milk)

• - Limited differentiation (Limited flavours – chocolate,
vanilla, strawberry)
Caption: Singaporean Milk market had
total revenues of US$460m in 2022
Gaps in Singapore competitive landscape for butter shows gaps in market for
entry.
Competitor Analysis Chart, Butter

• - Budget brands are not substitutable for baking needs

(Naturel margarine)

• - House brands such as Golden Churn do not offer the same

quality as artisanal brands

• - Present Artisanal Brands in SG (Le Beurre Bordier) do not

offer same level of transparency/ independent audits that
Udder Goodness provides
Similar gaps are found for the market for butter as well
Competitors:
F&N Foods, Milkmaid, Carnation, Yakult (S)
Pte Ltd, Kraft Foods (S) Pte Ltd,
Philadelphia, Unilever’s brand Magnum,
Cornetto, Wall’s and Ben & Jerry , Magnolia,
HL, Meiji
Singaporean Dairy market had total revenues
of $684.6m in 2020, representing a compound
annual growth rate (CAGR) of 5.1% between
2016 and 2020
Market consumption volume increased with a
CAGR of 3.6% between 2016-2020, to reach a
total of 128.7 million kilograms in 2020
anticipated CAGR of 3.2% for the five-year
period 2020 - 2025
Conclusion: Profit earned by entering the Singapore Market >> expansion/
modifying current business in New Zealand
Expansion into Overseas Export
Markets (SG in Particular)
Reasons for - Close Proximity to New Zealand : Large % of
expansion variable costs incurred from transport for export
- Growing affluent middle-class 3
- Strong milk/ dairy consumption trends 2
1, Appendix 1
Local Market (Business Revamp)
- Existing Strong customer awareness, branding
98% Customer awareness = if they still don't buy
from us
- 65% of people who buy their products are
recurring customers
- 80% of those who buy their signature flavoured
milk are recurring customers
- Cheaper options due to numerous producers
Customer's prefer to switch to cheaper options
(NZ being big on land will have many other local
producers)
Implementation
Boston Consulting Group Matrix for Udder’s product lines

Organic Milk – Cash Cow

• 65% Customer Retention Rate
• Unique Selling Point
• Large Market Share (50%)
• Limited Growth due to Market Saturation
• Slowing Revenue

Flavoured Milk – Star

• Decently high market share (33%)
• 80% Retention Rate
• Unique Selling Point
• Partnership with Whitaker’s
• Bulk of revenue from there, while organic milk
and others are dwindling – decent growth

Words of the COO and the Marketing Manager

Boston Consulting Group Matrix for Udder’s product lines

Butter – Question Mark

• Very high growth rate
• Uncertain positioning in the market
• Makes up a small portion of the sales
• Market Share is small
• However has USP

Ice Cream – Dog

• Ice cream is not doing well – compared to
other products in the product line
• No competitive advantage as well
• Market share barely significant
• Problems associated with shelf space and
frozen goods transportation

Davidson, Gordon. 2021. “Artisan Butter Is Booming!” The Scottish Farmer. The Scottish Farmer. December 25, 2021. https://www.thescottishfarmer.co.uk/news/19803003.artisan-butter-booming/.
“Butter - Singapore | Statista Market Forecast.” 2022. Statista. Statista. 2022. https://www.statista.com/outlook/cmo/food/oils-fats/butter/singapore?currency=aud.
‌
1. Keep Organic and 2. Expand and Promote 3. Cut Ice Creams
Flavoured Milk Our Artisan Butter Production Line
3 Solutions catered to the Increased Revenue Growth of Udders in
Singapore

1) Strategic Partnerships &

3) Piggybacking on existing
Short Term Marketing 2) Subscription Models
market leaders
Strategies
2. Subscription Models
How Udders Builds on current market trends (Short Term)

1. Strategic Partnerships and 4

Short-term Marketing
Marketing
Strategies MatasHealthTM

Create trust and increase

Creating a High Impact Landing in adoption through
Brand a unique identity experiences
the Singapore Market
for matas health, easily
recognizable
Short Term Strategy – Strategic partnerships and Pop-up Events to gaining a foothold
Considerations Where and Why? Singapore Marathons

High Initial Barrier to Pop-up stalls at Bubble Tea

products Shops and events

Lower the barrier to try out

new products through
Unknown and Brand Name promotions
And Recognition
Festivals and other events
Cross-sell renowned bubble
Trust and Recognition of tea brands with our own
Current Brands flavored milk products

Appendi
x
How Udders Builds a Consistent long term business model leveraging technological trends

2. Recommending Subscription Model

Maximizing customer retention and loyalty

Brand a unique identity

for matas health, easily
recognizable
Adjust Website To Differentiate Current Online Shop and Subscription Model

Online Store Concept Operational Details

Solution Features Value-Add

Udders
Grow closer to customer
Personalized interface
Hi Freya! & increase spending
at all touchpoints
What is your goal?

Udder’s Local Subscribe to our

Flavored Milk and Monthly Model!
Easy search
Butter Shop Integrated filter for goal-
handling and
based product search
exploration

Visual separation
Organic awareness push
of Online Shop
for new subscriptions
and Subscription
while keep online shop
Model
available

Source: McKinsey Digital, Insights | Recommendation | Implementation | Impact 8

2021
Customer Data Security And GDPR Regulations for Subscription Model Implementation
Data Regulation Considerations Implication for Udders

Internal Data Processing

Satisfaction of several conditions in 2nd
Personal data must be treated fairly and lawfully and
and 3rd schedule of the GDPR
cannot be used for other purposes

Consent for Personal Data Collection

Full transparency to explain to all users what
Matas must ask customers for clear consent and customers
is being done with their personal data
should know & understand how their data is utilized

Legitimacy of Data Usage

Matas must have a legitimate reason to collect
Matas must be able to justify its use for collecting the data
data & must be able to prove its legitimacy
and why it is relevant for the customer

PII Concerns
None of the data being collected by Matas can
Personally Identifiable Information may not be used
be PII (Personally Identifiable Information)
for personal security reasons
How Udders Builds a Consistent long term business model based on current market trends

3. Piggybacking 4
Marketing
Maximizing MatasHealthTM
customer
retention and
loyalty Create trust and increase
adoption through
Brand a unique identity experiences
for matas health, easily
recognizable
Partnering with existing brands in Singapore
Where do they get Why would companies partner with Udder Goodness
their milk from?
ff Fresh milk from Australian Premium quality of Udder Goodness's organic milk: ultra-
Magnolia premium 10 Star Certified Values range
free-range cows

Udder Goodness's unique selling point: Low-fat milk and

ff low-calorie content
Marigold Fresh milk + milk solids

Milk is usually sourced from Australia, Thailand, Indonesia and Malaysia Timeline

There is an increase in Singaporean's willingness to spend on organic
food compared to conventionally grown food
Growing trends shifting towards organic products along with advocacy
for healthy lifestyle and diet from the government
Partnership with Marigold in Quarter 1
Roll out surveys to measure customer’s satisfaction,
aiming to get 70~80% positive responses

Source: StraitsTimes
Summarizing Our Findings…
• Saturated Dairy market and Rising negative sentiments for sugar drinks in
New Zealand
• Attractive Singapore dairy market and increasingly positive sentiments to milk
derivatives

Marketing Subscription Piggybacking

6
 4
THANK YOU!! Marketing
MatasHealthTM

Create trust and increase

adoption through
Brand a unique identity experiences
for matas health, easily
recognizable
 Appendix
• 1) Shift towards ethically sourced products following COVID 19 pandemic
(2021)
• https://www.forbes.com/sites/stevebanker/2021/10/05/do-consumers-care-a
bout-ethical-sourcing/?sh=7968c35f5039
• "When asked if they would be willing to pay more for a product they could be sure was ethically sourced, more than 83 percent of respondents said yes. More than 17 percent
indicated they would be willing to pay 50 percent more, and on average, consumers said they would be willing to spend about 17.5 percent more on ethically sourced products."

• 2) South East Asians spend US$3.66 billion on bubble tea annually: https://www.channelnewsasia.com/singapore/bubble-tea-consumers-study-southeast-asia-singapore-markets-
business-brands-2885486
• Singapore fourth at US$342 million.
% Bubble tea drinks that are made of milk = Assumed to be 50%
Total market for our partnership = 342m /2 = 171m USD
• product gross margin of 60 per cent to 70 per cent
• Customers decide based on the product selection at stores, as well as the ease of access which means the number of stores a brand has
• Singapore will soon require food and beverage outlets to include nutrition labels on their menus to indicate drinks that contain higher levels of sugar and saturated fat
• The need for our company to get the nutrition labels as well to be portrayed as healthy

Butter MS: https://www.statista.com/outlook/cmo/food/oils-fats/butter/singapore

• 3) Growing Affluent middle class
• https://blog.seedly.sg/average-singaporean-household-income-stand/
• Research:
• Market Size for Milk in Singapore:
• 5,995,117 as of Oct 14 2022
around 3 million of people between 18-65
52% people between age 18-65 drink cows milk
of the 52%, 28% drink flavoured milk, 28% drinks full cream milk(assuming organic is full cream)
=436800 people drinking flavoured milk

• Frequency of drinking: Average Cow’s milk consumed per week:

12% x 700 + 12% x 1050 + 29% x 1800 + 6% x 2100 + 35% x 2500 + 6% x 4200 = 1985ml/week = 2 cartons of 1L / week
• Average price of 1L milk in Singapore = $3.550/L
• Total market share = 436800 x 2 cartons x $3.550 = $3,101,280 SGD
• R and D/ Piggy backing
• In Singapore, milk is widely added to coffee and tea to help enhance the flavour
• However, all these combinations are perceived by participants as not consciously drinking milk, except with cereal
• People actually drink more milk than they think they do

• Solutions: Impact and timeline

• Solution 1: Exporting to customers
• Number of brands of milk tea in Singapore = 60
Average number of stores/brand = Assumed to be 10
Total number of bubble tea stores in Singapore that we can potential provide to= 60 x 10 = 600
• South East Asians spend US$3.66 billion on bubble tea annually
• Singapore fourth at US$342 million.
% Bubble tea drinks that are made of milk = Assumed to be 50%
Total market for our partnership = 342m /2 = 171m USD
• product gross margin of 60 per cent to 70 per cent
• Customers decide based on the product selection at stores, as well as the ease of access which means the number of stores a brand has
• Singapore will soon require food and beverage outlets to include nutrition labels on their menus to indicate drinks that contain higher levels of sugar and saturated fat
• The need for our company to get the nutrition labels aas well to be portrayed as healthy
• Timeline:
• Quarter 1:
• Roll out the milk to supermarkets(NTUC as they are the largest supermarket retailer in Singapore at 230 outlets) + Pilot test to bubble tea stores
• KPI: 80% satisfaction of customers for bubble tea stores via survey
• Implement our marketing strategy for the flavoured milk and butter
• collaborating with shops
• Online advertisements
• Singapore has approximately more than 4 million broadband internet users
• radio, TV ads, print
• figure is expected to increase by more than 20% by the year 2018
• KPI: 50% conversion rate
• 1st year:
• Implement a subscription based model for direct to businesses via our online platform
• KPI:
• 30% take up for our brand of milk across all bubble tea brands
• 50k-100k revenue for subscription to consumers(?)
• Having our marketing
• 2nd year onwards:
• Implement the subscription model to consumers
• KPI:
• Assumptions:
• Bubble tea stores are frequent users of organic/flavoured milk in their beverages
• Hawker centers are not advisable to branch into as we want to portray the brand image of being a mid-high tier dairy product. The image that hawker centers being a low-mid tier eatery would negatively impact our brand image.

• Solution 2: Piggy backing

• Milk in Singapore
• Marigold HL
• Where do they get their milk from?
• Few different sources
• Marigold 100% Fresh Milk > Australian free range cows
• Marigold HL milk > Fresh milk + milk solids
• Magnolia Milk
• Where do they get their milk from?
• 100% Fresh Milk
• Milk sold in the supermarkets are usually from raw milk sourced from Australia, Thailand, Indonesia, Malaysia

• Analysis:
• Why would these companies NOT want to partner with us?
• Marigold already has their 100% fresh milk from Asutralia
• Why would these companies want to partner with us?
• Singaporeans increased willingness to spend on organic food compared to conventionally grown food ( https://www.statista.com/statistics/1010534/singapore-consumers-willingness-to-pay-for-organic-food/ )
• 51 percent of the Singaporean respondents stated that they would pay up to 25% more than conventionally-grown food products
• Growing trends shifting towards organic products + healthy lifestyle and diet ( https://www.straitstimes.com/singapore/health/neighbourhood-supermarkets-are-going-big-with-organic-products-to-meet-growing )
• Quality of Udder’s organic milk
• An ultra-premium 10 Star Certified Values range made using the traditional Frtiz Churn process from cream from unLIMited Ventures’ own farms.
• Independently audited and traceable pasture-to-plate artisan product
• 20 diary farms in New Zealand
• Unique Selling point
• Low-fat milk and low calorie content
• Timeline
• Quarter1: Partnership with Magnolia
• Reason: They only have fresh milk as their source of milk at the moment, no forms of organic milk
• At end of Q1:
• Total market share = 436800 x 2 cartons x $3.550 = $3,101,280 SGD
• Quarterly = 3,101,280/4 =
• Roll out survey to measure customer’s satisfaction
• Good KPI: 70~80% satisfaction of the organic fusion product