Despite being one of the top 5 raw cashew nut exporters, Lafooco has shifted its focus to producing and distributing value-added products of nuts and dried fruits, capturing new demanding markets such as Europe, North America, China, and the domestic Vietnamese market.
In 2020, Lafooco recorded VND24.2 billion ($1.05 million) in profit. Amid the global pandemic, Lafooco reached VND25.6 billion ($1.11 million) in profit during the first nine months of 2021, three times greater than the same period last year. Closing off 2021, the company expects to achieve VND400 billion ($17.4 million) in revenue and VND40 billion ($1.74 million) in profit, 40 per cent higher than planned.
Phan Ngoc Son, CEO of Lafooco attributes the company’s success and long-term growth to two principles: (1) the dare-to-think, dare-to-do, dare-to-move-with-the-times attitude; and (2) strategic investments in products, branding, and packaging development.
COVID-19 pandemic and changing times
Since the outbreak of the COVID-19 pandemic, consumers have swiftly switched to e-commerce platforms. With years of export experience, Lafooco soon realised the influence of the digitalisation trend and followed it.
Son said that selling on Amazon – the world’s largest e-commerce platform – is a goal the company had been pursuing for a long time. Crossing this goal off the list, Lafooco now successfully sells seven varieties of cashew products on Amazon. To introduce Vietnamese cashew nuts to the US, Lafooco had to adhere to a number of strict regulations, including obtaining a certificate from the US Food and Drug Administration, complying with label standards and following packaging guidelines to ship to Amazon warehouses.
In the domestic e-commerce market, Lafooco has launched official stores on all major platforms, including Shopee, Tiki, and Lazada, among others. Historically a raw cashew exporter, the company's staff initially struggled to adapt. To assist with the transformation, Lafooco brought in a team to think big, do big, to continuously update customer service and to execute special promotions on e-commerce platforms. As a result, the Lafooco brand has achieved popularity among domestic consumers. Till now, the revenue gained from both domestic and international e-commerce platforms has been stable with an upward trend.
Determination to strategically invest in product, brand, and packaging research
Prior to 2016, Lafooco mainly exported raw cashew nuts in large volumes. Since becoming a member of the PAN Group and receiving support from major financial institutions such as the International Finance Corporation, the Singaporean government’s investment fund, Mutual Elite Funds, and NDH Invest, Lafooco has been able to strengthen its management, business strategy, and capital. Pan Group and their strategic partners contributed to Lafooco's production process focusing on product quality and sustainable development.
In 2015, sales of value-added goods only accounted for about 5 per cent of Lafooco’s total revenue. Now, the figure has reached 60-70 per cent. In 2020, the revenue of raw cashew nuts decreased sharply, but with value-added products Lafooco still maintained a growth rate exceeding 40 per cent of the set target.
|Lafooco’s products are well received by both international and domestic customers.|
Realising that its former logo featuring a typical globe emblem, which is also used by export-import companies, was no longer suitable for its development orientation, Lafooco altered its strategy and logo in 2016. The letter A in Lafooco is highlighted to reflect the A-grade quality of the company's products and services. The letter O is integrated with the shape of a cashew nut and an earthy orange heart to convey the message “producing cashew nuts with all of our heart”, reflecting the philosophy of Lafooco's sustainable development for the benefit of customers, farmers, the environment, and workers in the cashew industry.
According to Son, the purpose of a logo is to remind customers of the brand and packaging directly influences consumer decisions. Before a branded product is introduced to online and offline shelves, Lafooco takes part in product research for each market segment. After research and consumer testing for flavour and quality approval, NDH Consulting – a brand consulting agency – takes over to create a strategic product branding plan and work on creative packaging development.
According to Lafooco's partners, customers actively look for Lafooco nut jars with the image of “a girl in a conical hat” or a bag of dried mangoes with “a sunny fruit farm” on the front. Vietnamese imagery used on each product line celebrates the origin of raw materials for the international markets to admire. Additionally, Lafooco uses high-quality packaging which gives the product a sense of quality when displayed on the shelves, highlighting all of the design’s features while ensuring the preservation of the content inside.
"We sometimes have tense discussions with our branding agency. But thanks to that, many different creative options have been explored. As we build a long-term and stable relationship throughout the years, there is a level of understanding that allows for smoother collaboration each time we start a new project. To create a meaningful design, members of the branding and design team will accompany us through many stages from gathering customer feedback to conducting market research and sampling each flavor," Son shared.
Lafooco and its consulting agency have accompanied each other for a long time and both insist on maintaining the standards for their signature packaged goods. Partners who want to import OEM products from Lafooco with lower quality than Lafooco's branded products to reduce costs are not allowed to use Lafooco’s branded packaging. Those packaging designs infused with local imagery are reserved only for high-quality products that meet the criteria of a product bearing the Lafooco brand name.
Lafooco does not focus on volume but rather on quality and customer service. "We are proud to develop Vietnamese products, bringing Vietnamese brands and Vietnamese culture to the world. In the future, Lafooco will continue to invest in the development of new high-quality products with attractive packaging to provide for both Vietnam and global markets," said Son.
By Mai Dang
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