If one attempts to document the history of corporate Pakistan, he/she simply cannot ignore one name — English Biscuit Manufacturers (EBM), an inspiring story of entrepreneurial success and national pride.
Maker of the famous range of Peek Freans biscuits, EBM is a classic case study of pioneering entrepreneurship in Pakistan. It is one of the very few Pakistani companies that are larger than their multinational competitors in terms of revenue.
EBM started its journey around 45 years ago when corporate Pakistan was dominated by a few business families and multinational companies and that too, in a sector that was yet to be established. It was a challenging market scenario that discouraged the growth of start-ups.
Fast forward, EBM has now grown to become the country’s largest branded biscuits manufacturer, enjoying a 45% market share as per the recent Nielsen Survey. With an annual turnover exceeding Rs22 billion in 2013–14, it is certainly one of the largest local companies in Pakistan and bigger than some multinational food and FMCG companies.
Although it has a number of large brands including Rio, Gluco, Peanut Pik and Sandwiches, it is the flagship biscuit Sooper that alone accounts for almost half of the company’s revenues – Sooper is well over the Rs10 billion mark, EBM officials say.
With a 77% penetration, ‘the highest in any FMCG brand’, Sooper is larger in terms of sales than the sales of all products of any other biscuit company in Pakistan, EBM says. These statistics explain why Sooper is a household name for most Pakistanis when it comes to branded biscuits.
While many new players – local and multinational – have entered what, according to Nielsen, is now a Rs43-billion industry, EBM has been able to sustain its position as the market leader.
The company’s compounded annual growth rate (CAGR) for the last 10 years has averaged over 20% by value and 8% to 10% by volume. Its CAGR, in terms of revenue, from 2008 to 2013, has been 24%.
All this growth can be attributed to Khawar Masood Butt, founder of EBM who, through his vision and good governance, guided the company to where it stands today.
However, times have changed and so have market dynamics. What EBM has achieved is history and challenges that lie ahead are a reality. With Butt nearing his retirement and the second generation taking control at the helm, the market leader will certainly be tested with an ever rising competition in the branded biscuit industry.
“We have always welcomed competition. We actually think that the competition grows the pie. What we cannot afford is being complacent,” said Dr Zeelaf Munir, Butt’s daughter and chairperson of the company’s Executive Management Board.
In an exclusive interview with The Express Tribune, Dr Zeelaf shared the company’s success story and explained how she would move the business towards further growth amid growing competition.
“We have to continue to invest in Research and Development and assess consumer needs and give them products they want. We take competition seriously,” she said, putting special emphasis on R&D and innovation that, she said, were important drivers of growth.
Explaining the importance of competition, Dr Zeelaf quoted her father as saying, “In a competitive environment, opportunities exist. Even if they don’t, a strategic mind creates them.”
This is perhaps why EBM – in the 1970s when there was no competition – created a range from within Peek Freans to create competition in the market. “We had research done, showing that market was not growing and the consumption of biscuits was low, so a range was created to compete with our own product line.”
Though she welcomes healthy competition, Dr Zeelaf said illegal competition from the huge growth of spurious and counterfeit products was the real issue facing the branded biscuits industry.
This, along with other challenges, such as ensuring consistent quality of raw material, will certainly test the leadership skills of Dr Zeelaf whose main role is developing and execution of strategy along with overseeing the business. “Entrepreneurship has obviously been in my blood,” she said. Grown up with EBM, she kept in touch all along over the past few years before finally joining the company in 2010.
While trying to move the business forward, Dr Zeelaf would like to continue the legacy of her father that has turned EBM into a success story.
“Through sheer hard work, belief in the company and the initiative to invest in value-added technology, he was able to turn around a loss-making company into what would go on to become Pakistan’s largest biscuit manufacturing company,” Dr Zeelaf said, summing up how her father managed the business over the years.
It was not a smooth-sailing, recalled Dr Zeelaf. In the 90s, EBM had lost its leadership position due to a bombardment of multinational and local companies. Yet, again, it was the locally-developed Sooper egg and milk cookies that brought the company swinging back as a serious contender.
EBM would continue its strategy of growth and seek market opportunities, Dr Zeelaf said. The company has done very well in terms of organic growth but still sees potential in the market.
“Whatever our business needs for growth we will keep our eyes and mind open,” she said.
Having vision and values is very important for any company to be a long-lasting one, she said. In EBM’s case, the vision was developing the concept of biscuits as ‘food between meals’ and popularising this concept among consumers.
Published in The Express Tribune, July 28th, 2014.