Friday, October 01, 2010

Quality to crow about

Quality to crow about
Business World Online
October 1, 2010

Tennyson G. Chen
Bounty Fresh Food Inc.

When asked when Tennyson Chen first considered himself an entrepreneur, he laughingly replied, "Me? I consider myself a farmer. When people ask what I do, I tell them ‘I grow chickens’." But behind this humble statement lies a deep passion for innovation and quality, one that has propelled Bounty Fresh Food, Inc. (BFFI) to preeminence as one of the country’s largest and most reputable food producers. The quality of Bounty Fresh chickens is undeniable. Last year, the company won the 2009 Asian Livestock Industry Award, the first time any company from the Philippines had ever won this prestigious regional accolade.

No stranger to change, Mr. Chen started out doing general construction work after graduating from the De La Salle University with a degree in Industrial Engineering. However, when the business took a downturn in the mid-’80s, Mr. Chen decided to switch tracks and explore the food production industry. With his siblings, he started an egg layer farm. After a few years, however, feeling that the business wasn’t growing enough, Mr. Chen once again changed directions. This time, he decided to try his hand at breeding and growing broiler chickens, which are young and tender chickens used primarily for roasting.

"We knew nothing about the business," he confides. "So my siblings and I went to live on a broiler farm for six months to learn everything we could about the breeder business." In 1993, Mr. Chen applied for a Board of Investments incentive and set up the company which later became BFFI. Yet, Mr. Chen and his siblings still had much to learn -- on their first day, it took them 16 hours to dress 1,000 chickens. A stark contrast to the 6,000 birds an hour produced today with BFFI’s state-of-the-art facilities. By 2005, the company was producing 70 to 80 million birds a year, doubling the industry volume. Today, sales are estimated at P9-11 billion annually.

In addition to the steep learning curve, Mr. Chen also had problems dealing with wet market vendors with unscrupulous practices. Fortunately, he was able to land a contract to supply Makro and business started improving. "Our first delivery, we could hardly supply the order. We didn’t know anything, really. We had to go through the process of learning from scratch." He also relates how other integrators in the market gave them just six months to survive. But with persistence, determination and a keen eye for opportunities, Mr. Chen was able to push the business into becoming the billion-peso enterprise it is today.

From the very onset, Mr. Chen believed that technology would be a powerful differentiator in the industry. Making a leap of faith, he scoured the world for the most advanced industry technology, and brought them into the country. Despite being a smaller start-up, Bounty Fresh pioneered many of the systems now used by the country’s other integrators, such as temperature and climate control, single-stage hatcheries and others. "The industry needed to upgrade itself. Some of the practices were over 30 years old. I felt that we needed to modernize if we were to compete with our Asian neighbors."

With the technology he brought in, Mr. Chen was able to keep a tight control over costs while ensuring top quality for his products. "For example, we brought the first climate-controlled single-stage hatchery into the country in 2000. This allowed us to ensure better sanitation, bio-security, and control over the climate and humidity. The chicks grow healthier and stronger, and the resulting chickens are of better quality."

Unsurprisingly, this commitment to quality has translated into ISO certification in Quality Management Systems, Food Safety Management Systems, Environmental Management Systems and Occupational Health and Safety Management Systems for BFFI, as well as a string of national and regional awards such as the Philippine Grand Slam Award for Best Meat Establishment from 2006 to 2009.

Every stage of the production process is imbued with the same focus on technology, even down to the vacuum packaging and tamper-proof trays for their products. "We’re very critical about ensuring food safety and freshness. Do you know that the amount of bacteria on a chicken in ambient temperature doubles every hour? To ensure that no bacteria comes in contact with our products, our chickens are processed, chilled and vacuum-packed immediately to seal in the freshness. Our technology also allows us to keep our costs low, so we can give more value to our consumers."

This commitment to value is what prompted Mr. Chen to take BFFI into the next stage of its evolution in 2008. Through Bounty Agroventure, Inc., a sister company of BFFI, he conceptualized the Chooks To Go brand to retail freshly roasted chicken directly to consumers. "When we first opened, we sold our cooked chicken for P139. People went crazy over them! That year, in December, the Urdaneta branch sold 900 heads. People queued for almost 100 meters just to buy our chicken," he relates in amazement. In just two years, Chooks To Go has mushroomed, with over 700 outlets around the country. The brand opens three to four outlets a day and retails 100 million chickens a year.

Mr. Chen candidly shares that he still doesn’t know how they did it, but he attributes the success of the business to the dedication and capabilities of his people. The company works with close to 1,000 contract growers, toll feedmills, hatcheries and other partners around the country. BFFI helps these groups modernize their facilities and improve their productivity by providing advice, feasibility studies, technology recommendations, assistance acquiring land or equipment, and other support.

The company also gives back to the community, in particular the town of Pulilan, Bulacan, where the main plant is based. They support Pulilan children through education grants and feeding programs, engage in tree-planting, conduct blood donation drives, support medical missions, provide antirabies injections, and recently established a livelihood project for farmers in Abra. Their waste water, which is rich in natural fertilizer, is also provided to local farmers.

Under his leadership, BFFI continues to advance and improve its facilities and processes. "We’re employing foreign technology in our facilities, which cost more. But they can perform better in the long run. I want to buy the best technology and look at it in the next 20 years. The point of view of a contract grower is they want return in as short a time as possible. That’s not my philosophy. I want to spend on the best technology and invest in a long-term strategy." Today, the company’s feedmill in Tarlac is considered the best in the country. They have also begun construction of an even more advanced hatchery, and their next generation feedmill is already on the drawing board.

Thinking back on the challenges he had to overcome to bring his company to where it is today, Mr. Chen believes that risks should always be viewed as opportunities. "You have to act quickly and decisively," he advises would-be entrepreneurs. "Do the best you can, employ the best technology, and keep moving forward. Tackle issues, don’t hide from them."

Sage advice from a self-proclaimed farmer whose vision has revolutionized an entire industry.


The Entrepreneur Of The Year Philippines 2010 is sponsored by SAP Philippines. Official airline is KLM Royal Dutch Airlines, operating on behalf of the Air-France KLM Group in the Philippines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. The winners of the Entrepreneur Of The Year Philippines 2010 will be announced on 12 October 2010 at an awards banquet at the Makati Shangri-La Hotel. The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2010 in Monte Carlo, Monaco in June 2011. The Entrepreneur Of The Year is produced globally by Ernst & Young.