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Investor Relations

Driving product innovation and customer engagement

Marcos do Espirito Santo, Product Development Manager, Soluble Coffee

As our Vietnam plant operations grew from strength to strength after the first roast in 2009, Olam took the view that continual innovation would be critical to meet and anticipate customer demand. As such, just before plant capacity was tripled to 12,000 MT per year in 2013, we set up a separate function to institutionalise product development within our Vietnam facility at Café Outspan Vietnam. In 2013, we expanded our R&D activities into a second location after the acquisition of Seda Solubles in Spain.

With the evolution of our role and capabilities, our product development team now supports the growth of the soluble coffee division by developing products that anticipate and meet quality and cost requirements for our customers across all market segments. Our strong six-member team leverages its diverse expertise to develop innovative insights and products. With the recent launch of a common platform across both locations, we expect to be able to continue building a databank that will allow us to accelerate understanding and development of actionable insights across all segments of the soluble coffee market.

One of our unique strengths is our sourcing ability. Olam’s extensive origination capability across 21 countries around the global coffee belt means that we have access to the full palette of flavours to work with. Some of our recent successful innovations include identifying strategic opportunities for standard spray-dried coffee qualities with competitive cost, as well as high-end premium freeze-dried coffees. High value-added certified products (such as UTZ, Rainforest) and special single origin products (such as Arabica Mandheling, Colombia and Ethiopia) are also in the portfolio.

Our work is seamlessly channelled across both plants – we selectively direct development exercises to the plant that has the competitive advantage to be able to deliver the best solution in terms of target taste, customer’s desirable cost level and delivery time.

Strong customer relationships  

The success of our work is contingent on the strong relationships we have with our customers. Through deep customer engagement, our Vietnam factory now supplies bulk packs as an industrial ingredient to brand owners around the world, including Japan, EU, Russia and Southeast Asia.

Coffee-Sale-Volume1
Above: Vietnam soluble coffee sales volume by country of destination, 2015. 

Japan is an important destination of our products from Outspan Vietnam, responsible for about 16% of our volume in 2015. Canned coffee is the main application of our concentrated coffee extracts and spray-dried coffees in this market. We have focused on direct technical contact with key customers in Japan to understand their challenging requirements.

In Spain, while bulk pack sales are used as industrial ingredients by a number of our customers in the EU, most of our products are retail packs sold to retail chains primarily in Western Europe, including in the UK, Spain, France and Germany for their private labels.

Coffee-Sale-Volume2
Above: Spain soluble coffee sales volume by country of destination, 2015. 

Seda Outspan has been steadily regaining its share in the European retail market, its raison d’être. This has been a result of our efforts of focusing on the strong British retailing industry and the German retail powerhouses. The joint approach of the sales team along with product development efforts has helped obtain key accounts, especially in the UK. Seda Outspan has doubled its volume to the retailing market from 30% in 2013 to 60% in 2015.

Collaborating with our customers

solublecoffee-product
Above: Olam’s soluble coffee available in a wide range of containers, PET bottles, glass jars, sticks and pouches covering all the needs of B2B customers and final consumers.  

Our policy is to engage and cooperate closely with customers from start to finish – with our team in Vietnam working closely with Asian customers and our team in Spain engaging closely with European retailers. This starts in the early development stage where we jointly define development targets by carefully identifying their requirements before converting them into technical parameters for the manufacturing plants.

We have created a product development methodology that begins with cupping coffees. This involves identifying pre-defined attributes and their intensity level, as we have to relate results to the green coffee selection and manufacturing process.

Next, is the industrial trial, where the most critical developments take place. This involves the team defining the key processing steps – types of raw material and ratio, roasting level, extraction type, aroma recovery and drying. All trials are jointly agreed with the operations team and usually run within 1 month from ordering. The team then assesses all trial samples internally before submitting it to customers for validation. Once the customer approves the trial, finished product specifications are jointly agreed for smooth delivery of the first shipment. After this, the product becomes part of our routine operations. 

Moving forward, we will continue building our capabilities, expand our applications knowledge and move into applied research, while also increasing and strengthening customer touch-points for sequential successful developments. We also expect to be able to move our R&D capabilities to the next level by leveraging Olam’s presence across the agri-commodities complex.