Amplifying differentiation: Vitarich growth story continues
December 09, 2024 – Agriculture remains the cornerstone of food security, employment, and economic growth in the Philippines. It is among the country’s three main economic sectors, accounting for 8.6% of the country’s gross domestic product and employing 23.2% of the total labor force in 2023.
One of the key players in the sector is Vitarich Corp. Founded in 1962, the company is a leading poultry integrator and manufacturer of animal feeds and food products in the Philippines. It continues to reach more Filipino consumers with its recently expanded selection of fresh and freshly frozen food offerings.
In 2023, the company raked in a record-high revenue of nearly P12.5 billion. However, profits dropped to P13.3 million from P89.6 million in 2022 due to lower gross profit and higher expenses.
This year, Vitarich delivered its strongest nine-month results yet, demonstrating efficient strategy execution that has improved the profitability and financial position of the company. While its revenues did experience a slight dip of 4.3%, net income soared 547% to P259.1 million in the January to September period compared to P40.0 million a year ago.
Vitarich President and Chief Executive Officer Rocco Sarmiento attributes the significant increase to better cost management and value-adding activities.
“We had to look for ways to manage our bottom line. The major factor is more efficient procurement of raw materials. Also, our food business is serving more restaurants, so that has added value because we already make the products for them. That means there’s technology and knowledge transfer, so we’re not just selling commoditized products. We are a partner in the production, which not only gives us stable margins but also ensures sustainable supply chains,” he said.
In the past decade, Vitarich’s transition from a company that ventured into aqua feeds, fighting cock feeds, and even cream dory production to focusing on poultry and livestock feeds and poultry production has proven highly successful.
“We’ve focused our business and limited it to animal feeds and poultry production. This is where we found the most success. Over the past five to seven years, this strategic focus has fueled our performance and we were able to maximize our efficiencies in our technology and streamline it to these segments. That’s what’s been driving our growth since 2016,” Mr. Sarmiento said.
Building on this momentum, Vitarich has entered the retail space to achieve meaningful scale and profitability.
“We are transforming the company into a food-focused business centered on chicken because that’s the part that’s a little unstable due to the market prices. We’re doing this by differentiating our products through processing and product innovation, and entering the retail space,” Mr. Sarmiento explained.
Today, the company’s Cook’s brand is available in almost 400 outlets, groceries, and convenience stores. Next year, the company plans to introduce three additional product lines within the “Flavor Origins”, which will be sold through modern trade channels.
Vitarich offers an innovative selection of fresh and ready-to-cook chicken products, including Fresh Whole Chicken, Freshly Frozen, and Flavor Origins, which comes in three distinct flavors: Mediterranean Roast, South African Roast, and French Roast.
The company has also expanded into online sales, making its Flavor Origins line available on platforms such as Lazada, Grab, and other e-commerce stores. Additionally, it launched Cook’s website to engage with customers and gain better insights into their behavior.
Along with its remarkable nine-month performance in 2024, Vitarich was awarded for the first time for good governance by the Institute of Corporate Directors (ICD). The Golden Arrow Award was given in recognition of the company’s performance towards transparency, governance, and accountability to its stakeholders based on the 2023 ASEAN Corporate Governance Scorecard (ACGS) assessment results.
“The award was a welcome surprise. It shows that we’re doing something right. It’s our hope that this recognition of our governance practices would make Vitarich an attractive investment. We plan to sustain that and aim higher,” Mr. Sarmiento said.
With its strong financial performance and commitment to innovation, Vitarich is not just adapting to change—it is driving it. As the company expands into retail, strengthens its food business, and adopts modern technology, Vitarich is poised to make an even greater impact on the Philippines’ agriculture sector in the years to come.
For more information, visit vitarich.com and cookschicken.com or contact ir@vitarich.com
This article first appeared in BusinessWorld.