EXTRA >> By Mike Sullivan
FROSTY BOY, one of Australia’s most successful food manufacturers and exporters, is not just riding the crest of a wave, it is creating a wave of interest in icecream and yoghurt products in markets across Asia previously thought as too hard.
In fact, Frosty Boy last year custom built a new 6000sqm factory at Yatala, in the Gold Coast City region, from the ground up to incorporate its state-of-the-art manufacturing systems designed to meet both domestic and international demand.
Frosty Boy CEO Dirk Pretorius said the facility, which produces the equivalent of two million serves of soft serve ice cream daily, is boosting Frosty Boy’s international expansion and helping its clients succeed in 48 countries – ranging from small restaurants to food outlets including KFC Asia, Burger King Asia, Wendy’s from the US and the 1000-store Jollibee chain in the Philippines.
Frosty Boy, which started with icecream products in 1976 in Brisbane, is now manufacturing deserts and beverages, producing versatile powder bases ranging from its ever-popular classic vanilla soft serve icecream to frozen yogurt, frappes, slushies and, more recently, hot drinks.
“Export now represents 75 percent of our sales and this part of our business continues to grow as more companies realise the quality of our product,” Mr Pretorious said. “Further export opportunities are constantly on the horizon, particularly with the rapid expansion of the frozen yogurt industry, and the ever growing demand for top quality, Australian dairy products in Asia.”
Mr Pretorious has spent many years developing business relationships throughout Asia and these are now paying off – especially with the new flavours developed to suit Asian markets, and a growing awareness of probiotics and so-called ‘superfoods’.
“We see it as following the lead of the US where it has been a big thing for a long time – but we see that taking off in Asia now,” Mr Pretorious said. “I really think we will see strong growth in frozen yoghurt continuing in Asia.”
He said developing flavours for Asia was one of Frosty Boy’s advantages.
“I don’t think that’s a pressure for us, it’s really actually our point of difference. We manufacture more than 130 different types of icecream here. So we really work with the customer in a market to determine what the consumer really needs specific to that market – what flavours do they want, what price point do they want? What specific product do they want to launch in the market?
“Then we work with their R&D team to come up with a product that suits their profile. I think that’s a large part of the success that we have had over the years, to really zone in to that niche market and focus on that niche market,” Mr Pretorious said.
“We (the Frosty Boy leadership) do a lot of travelling and our food teams do spend time in the market as well. The technique is to really work in very closely with the customer to work out exactly what they are after.
“It is about subtle changes in flavour. A vanilla that you would sell in Australia is not a vanilla that you sell in China, for instance. So we work with the suppliers, the food houses and the customer in fine tuning the product accordingly.”
There have been surprises along the way. For Mr Pretorious, one of these has been the popularity of green tea flavours.
“Green tea flavour is one that I thought would be really niche, but we see that starting to take off now as a flavour that is more mainstream,” he said. “We see some icecream shops in Asia that have all their products based around the green tea product. Although green tea has always been a big flavour in Asia, I never really thought it could work on its own as an icecream base.”
Frosty Boy supplies the base product and the flavour is usually added by the client as part of their unique product process.
“So they might add a durian flavour or you might even see some teas – different tea flavoured icecreams,” Mr Pretorious said. “Every time I go back (to Asia) I am amazed at the growth – the number of stores and you have got a growing middle class in all those markets with disposable income.”
RISE OF HEALTHY FOODS
Once thought of as the staple of fast food chains, the fast-serve icecream products that Frosty Boy creates are now underpinning products meeting the needs of a global trend towards healthy foods.
“Healthy foods? That’s a trend all over the world I reckon, people are more aware of eating healthily,” Mr Pretorious said. “So we are aware and have developed products that are sugar-free, low in sugar and low calorie, reduce calories, low fat. Low fat has been a big thing but that is on the sideline now, but the big things now seem to be lower in sugar and lower in calories – that is what we are working on now in coming up with concepts and ideas.
“We have got such a wide range of yoghurts available – they’ve got anything from high protein to low sugar – there is a huge range available – and they all contain pro-biotics and pre-biotics as well.
“Pro-biotics became well known from yoghurt that you buy in the supermarket. Obviously we add that in and the health benefits of that has been well documented over time. We add the pre-biotics to it which is basically the fibre – or, the food for the pro-biotics – to make sure that you get the best benefit from that.
“We’ve known the benefits for a while and we have looked at all options and as food technologists – we have got very good food techs on our team as well – we are constantly looking at what is going to be the next big thing. So while it has been in the market in normal yoghurt, we looked at the options of adding it to frozen yoghurt, for the benefit of consumers of frozen yoghurt as well.”
Frosty Boy’s growth in Asia has been accelerated by its products reliability and safety – especially in meeting logistical challenges.
“The product that we do has got a 12-month shelf life on it, as long as you store it at about 25 degrees, so it is a very easy product to handle, particularly for Asia,” Mr Pretorious said. “For that reason as well, it helps us to be successful because the cold chain and supply chain is not as sophisticated in a lot of these countries.
“So our product makes it really easy for them from a logistical point of view. We do design products that are very robust for that reason. It is still a big problem in a lot of those countries, that supply chain. Our product fits really nicely into that format.”
Frosty Boy works in two main areas of the supply chain: supply groups for the major food chains and with independent importers.
“We are exporting now to 48 countries,” Mr Pretorious said. “It is a process of finding the right distributor, getting them on board and getting them trained up, and then developing that market outside of the chain business.
“I am always amazed when you are travelling and you see how many chains there are that you have never heard of. That you don’t know about, but they may have 200 or 300 stores somewhere in Asia. And you’ve never heard of them. Those are the ones that you need a distributor in market to find them.”
The new Frosty Boy factory at Yatala now provides a firm foundation for meeting growth demands globally, Mr Pretorious believes.
“I think the main thing the new plant does is it gives us some sanity again. At the old plant (at nearby Loganholme) we were running flat out with shift 24 hours a day, seven days a week. And that’s as well as developing markets.
“We have doubled capacity moving into this plant and we are sitting now at around 60 percent capacity. So it gives us the capacity to really develop new markets again and we are looking for new opportunities.”
Fundamentally, the new facility has allowed Frosty Boy to streamline its processes through re-design.
“When you can design something from scratch you can always get it to run more efficiently,” Mr Pretorious said. “So the flow of raw materials through to finished goods is excellent. We also designed it for quality assurance purposes. It is one of the key things now if you are an Australian food manufacturer – to make the absolute most of the great name Australia has got for quality products. Design it to reduce costs.
“If you want to manufacture in Australia you have really got to get your costs under control.
“So we have put in a lot of robotics, in terms of the packing side. So even with the quality assurance focus we are cost effective. So we have computerised many areas of the plant, for instance in terms of the recipes, so they are always strictly following the recipe. Systems are giving them a lot more efficiency.
“We have also developed a good R&D facility here. We bring a lot of customers in to Frosty Boy to work with us here, either working on their own recipes or to develop something specific for them in their market. We prefer to do it here – we make the most progress if we can get them in, or we would send a food tech in to market, to work with the customer in market. Sometimes you have got to do both as well to get it across the line.”
That capability is helping to drive new sales and increase volumes to existing customers, as Frosty Boy products are designed to help their customers grow.
“Because we are so focused on a very niche market and we see so many different markets, we really can give a lot of insights to our customers on what’s the next trend that’s coming – and what do we see that works in other markets. From that point of view I think we can give a lot of input to them.
“We also do a lot of menu innovation work here. We would not just manufacture the product, we would take it all the way through to the menu. And then we would work with the customer on the next launch for them and how is their next menu going to look. We’d work on costings and show them operationally how it should be done to present that product.
“At the end of the day we do not sell a carton of soft serve mix, we sell something that is on a menu somewhere that the consumer has to buy. We really focus on that end of the business in terms of innovation.”
An area Frosty Boy has been a little surprised by is the growth of the beverage market in Australia and Asia– coffee in particular..
“The whole coffee market and the beverage market is a massive trend at the moment,” Mr Pretorious said. “We have developed a range of products called the The Art of Blend, which is a range of products that has been specifically designed like that.
“With seven products you can develop, literally, 100 menu options, by combining them, by adding fruit to them, by adding flavours in there. The idea is that you give a coffee shop or a chain the ability to use these seven products. You have constant menu changes, limited time offerings, you know, the things that consumers want.
“What we see now is that consumers don’t want to be told what to buy – they don’t want to see two or three items on a menu and that’s it. They want lots of options, and they want those options to change constantly.
“That puts a lot of pressure on the outlets ... and the range is designed to give them that ability to make changes without changing the base product.”
The range has hit markets in Asia at just the right time.
“I am always amazed when I am travelling in China the amount of coffee shops and the quality of the coffee you get there now,” Mr Pretorious said. “Ten years ago you would not get a coffee shop there and now they are on every street corner.
“Obviously that has given us another angle. We can serve those beverage companies.”
Mr Pretorious said Frosty Boy was keeping an eye on food trends such as so-called ‘superfoods’ – but probably not develop such products until they become more mainstream.
“Superfoods … we are keeping an eye on it but you’ve got to remember it has got to be available to mainstream,” he said. “It’s a niche at the moment … and it is obviously a volume thing as well for us – but we are keeping an eye on it and seeing what’s happening in that area.
“We really focus on our niche. We don’t want to try to be everything to everyone. We’ve got big competitors out there – big multi-national companies – and we are still a small player and we have got to always remember that, know our place in the market and focus on what we are good at.”
FOOD’S BRIGHT FUTURE
Mr Pretorious sees a very bright future ahead for Australian food production and manufacturing, based on what Frosty Boy is experiencing as a result of its constant innovation.
“I think Australian manufacturing – and food manufacturing in particular – has got a great future,” he said.
“There are a few things you have got to get right: one is that you have got to spend money on innovation, on things that will reduce costs and give you that ability to compete in those markets. If you get that bit right and then really focus on innovating your product to really give you a point of difference in the market.
“You focus on quality assurance and drive that quality assurance message through to the customer. Those things, I think, are crucial to Australian manufacturers. And then sell Brand Australia.
“We always say we sell Brand Australia long before we talk about Frosty Boy. It has such a good name for the quality of its products. And we use that.
“If you can get that combination right, and obviously customers want good service – it is all about really servicing those customers and taking care of their needs. Then I think we have got a great future for manufacturing in Australia.”
Frosty Boy has not been linked to any major export programs or development organisations so far, but it does recommend working with Australian government bodies to foster new markets.
“Of course, we have worked over the years with Trade and Investment Queensland (TIQ) and their offices overseas as well, to help us with leads and open new markets,” Mr Pretorious said.
“We find if you are going to a meeting with a customer for the first time and you take a government representative with you, like Austrade or TIQ, it just adds to that feeling of confidence in the customer. It says, these guys are seen by the government as worthy of support and to represent – and that really helps us as well with that process, to speed it up a bit.
“But it is a long process, we always say it takes us two to three years from starting before you get the first order out of a market. It is a long process of constantly visiting that market and building relationships.
“I really think that’s where a lot of exporters fall flat, because they start that process and then after a year they say, this is too hard, you know? They say this is taking more time than I thought it would and is costing me money … But it is a process that you have got to stick with to get the end result.
“A lot of times you have got to have that long term vision along with your customer as well. You may start small, but they (grow and) become a substantial customer over time. That has happened many times with us in Asia, where what seems like a fairly small customer to start with grows into a substantial customer.”
But the real key to success for Frosty Boy has been the commitment and innovative nature of its staff.
“The important thing for Frosty Boy is our team and our people,” Mr Pretorious said. “At the end of the day, Frosty Boy is not about the shareholders of the business, to me it is the team of people that has gotten us here and we’ve got a really amazing team. The way they are and the way they work makes it a fun place to work.”
Frosty Boy constant strives to improve its flavour, in both product and production, Mr Pretorious said.
“Keep it a fun place to work. You can’t be in a happiness factory and not be happy.”