Farm Fresh Bhd, known for being a major producer and supplier in Malaysia for fresh milk products, is now banking on its newly created ice cream division as its biggest driver for revenue growth.
Farm Fresh ice cream business under the Cream Hauz brand was only launched less than 1 ½ years ago but it is already generating 12% of its revenue in the 2nd quarter of the current financial year.
Apart from Cream Hauz, Farm Fresh also has 65% stake in the artisanal ice cream chain Inside Scoop and a 70% stake in Sin Wah Ice Cream Sdn Bhd which produces the popular traditional ‘aiskrim potong’.
Farm Fresh is investing in new product launches while ramping up its production within the ice cream category as it aims to expand its distribution from 636 to 3,136 petromart locations all across Malaysia. Currently, Farm Fresh ice cream production capacity stands at 450,000 units per day. According to a spokesperson, “Upon completion of its Enstek facility, total capacity is expected to expand to 1 million units per day. The additional capacity will also support the launch of new product formats, including cones, which account for approximately 25% of the impulse ice cream market by sales.”
Ice cream products carry a higher gross profit margin of 50% compared to the group’s overall margin of 33.6%.
Farm Fresh also benefits from the ringgit currency appreciation which mitigates the higher farm gate prices of Australian milk.
Meanwhile, Farm Fresh is also looking at establishing a factory and dairy farm in Cambodia. The poor relations between Cambodia and Thailand have also led to the boycott of Thai-manufactured ice cream products which translate to new opportunities for Farm Fresh.
Farm Fresh is also looking at establishing its presence in Indonesia.
