PETALING JAYA: Local vegan ice cream producer Berjaya Kelava Sdn Bhd, a 51% subsidiary of Berjaya Food Bhd (BFood), sees a soft and bright horizon in 2022, catalyzed by the Berjaya Corp Bhd (BCorp) group.
Azlan Shah Alladin, founder and CEO of Berjaya Kelava (picture) aims to increase its production tenfold with an investment of RM1 million in its facilities.
“With this, we hope to reach our first million ringgit sales in one year in 2023 and after that, we may be able to reach RM2 million in sales per year. If it works, we can consider building a larger production facility or another,” he said. SunBiz.
While that number isn’t unusual for a small-to-medium business, the fact that Kelava was just a one-man show more than three months ago makes its growth so far an impressive feat.
This growth optimism is fueled by BCorp Group’s acquisition of Kelava, which took place more than three months ago when the taste of Kelava’s ice cream piqued the interest of BCorp founder and chairman Tan. Sri Vincent Tan, to acquire the company.
Prior to the acquisition, Azlan ran production on an ad hoc basis, with himself being the only permanent member of the team.
“The Covid-19 pandemic has caused many of my part-time helpers to leave. In fact, when Berjaya approached the company, there was only me in the company. It was a one-man show,” he shared.
As a one-man show, the CEO used to brew 2,000-3,000 cups a month and now production has doubled to 4,000-6,000 cups a month with the help of four support staff as well as an assistant in the kitchen.
Kelava’s average monthly sales have also doubled since the acquisition.
“Right now we’re running things from my own central kitchen based in a small shop, but we’re looking to increase production capacity by 10.”
At this point, Azlan said, the expansion plan is in progress and the investment of RM1 million will be spent on the facility as well as the equipment used in the production.
“Currently we have pretty decent equipment, but it’s not sophisticated.”
To produce consistently smooth ice cream, he explained, it is necessary to spend on equipment.
Besides the usual capital injection and operational support, the ice cream maker pointed out that it could also leverage BCorp’s distribution network.
“For example, they have a chain of resorts that we immediately started catering to, places like Taras Hotels, Pulau Redang, Berjaya Hills and Berjaya Times Square.
“We also have good prospects for supplying their other food chains under the Berjaya umbrella, such as Starbucks and maybe even 7-Eleven,” he said.
Thinking back to the start of Kelava’s journey, Azlan said the company started four years ago when he started a vegan diet and realized that vegan ice cream was a rare product and that he saw an opportunity in the market.
Previously, he had a career as a registered accountant with Certified Practicing Accountant (CPA) Australia as well as the Malaysian Institute of Accountants and was employed at various times by Ernst & Young, Boustead Holdings and Neptune Orient lines, based in Singapore.
With the ice cream business, the ex-accountant has found his former career beneficial in determining the financial details of the business, particularly profitability and costs.
At first, Azlan found access to capital to be the biggest challenge,
“It’s not too hard to figure out what needs to be done, but it’s hard enough to get the money to do it.”
When it comes to execution, Azlan said, the biggest challenge is capital, like any small business, and he overcomes that challenge by being very cost conscious, learning how to use social media as well as managing the website to reduce overhead.
With Kelava’s current business trajectory, he admits it has entered uncharted territory as marketing becomes an inevitable part of doing business. Coming from a background in accounting, the CEO explained that marketing is seen as something that is not essential for the company, a “nice to have” compared to the fundamental process of production and sales.
“But without marketing, you might see the commercial plateau,” he admitted. At this point, he expressed relief that BFood was on board to provide support for Kelava.
Overall, the estimated value of the global non-dairy ice cream market stands at US$520 million (RM2.18 billion) with a compound annual growth rate (CAGR) of 13.7%. according to a study by Allied Market Research in June. 2020.
Similarly, the Good Food Institute found a 34% increase in vegan ice cream sales between 2017 and 2019 and expects the market to see a CAGR of 15% to reach US$1.2 billion in 2025. .
On the ground, Azlan has observed that the demand for plant-based foods is increasing in Malaysia, reflecting the global trend for sustainability, ethical and health-related reasons.
“I hope and anticipate that this trend will continue.”