Munchy’s World of Wafers

Special Report Munchys World of Wafers: A Brand That’s Baked to Last c ATEGORY management is a much touted marketing concept, but few companies can truly say they have baked a whole new pie from a niche in the old dough. Eight to 10 years ago, wafer products accounted for a miniscule 2-3% share of Malaysia’s biscuit market. Today, wafer cubes, rolls and innovations such as coated and enrobed wafer sticks command a 12% stake in the countrys dry confectionery sector. This enlarged portion owes much to the efforts and leadership of a young company which staked its future on a pursuit for quality and unceasing innovation.

From its early days as a contract supplier of bulk products, Munchy Food Industries has emerged as a household brand in Malaysia and Singapore, with a turnover of about IJS$30 million, and producing about 2,000 tonnes of wafers, wafer rolls and biscuits a month at its manufacturing centre in the town of Batu Pahat. The company also exports about a third of its output to markets as far flung as Mongolia and Mauritius. Led by a team of brothers who grew up within a rich tradition of biscuit and confectionery making, Munchys is currently gearing up for a new phase of development, both at home and abroad.

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At the moment, a new RMIO million warehousing FOOD & BEVERAGE ASIA FEB/MARCH 2005 facility is being constructed on a 2-ha plot behind its present factory, which executive director and general manager C. K. Tan said will free up floorspace for new manufacturing lines in the future. Earlier this year, Munchys obtained its IS09001 and HACCP certification from SGS. Constant change characterises Munchys product development mantra, as it strives to offer consumers a continually fresh eating experience without any compromise on quality.

When it first started out in the early 90s, the company’s main products onsisted of bulk tin and simple cream-filled wafers made on a second hand wafer plant. Today, MunchVs operates a state-of-the-art high capacity Haas wafer sheet line, the largest in Asia outside China, as well as wafer stick and biscuit lines that allow it to serve customers with a full and balanced spread of products. Tan. “Now we have over 120. ” Recent upgrades to the wafer lines have resulted in new launches such as wafer sticks filled with layers of high quality hazelnut paste and chocolate (Munchini).

The very latest item, Mini Tiger Bar, is an individually flow- wrapped wafer bar enrobed with a high uality chocolate coating and sprinkled with hazelnut chunks. The biscuit line has also seen the addition of a directly gasheated 60 metre oven suitable for moulded biscuits, cut biscuits, cream and soda crackers, and cocktail articles. Packages that stand out Mint Tiger Bar is a brand new wafer bar enrobed with a high quality chocolate coating and sprinkled with hazelnut chunks.

With such hits, “Why bother to change when a product is already selling well? ” To this rhetorical query, Mr Tan remarked, “We have always believed that today, it is not only about selling a product. Consumer needs are ever changing; they get bored of hings so fast and so easily, so a lot of things boil down to the design of the product. ” “A biscuit is a biscuit – if you can pack it differently with a new concept, it will be value-added and the whole product is enhanced. I think the packaging is really the key to the product. This thinking is evident in Munchys recent revamp for Muzic, which now boasts a newly- designed stand-up pouch featuring high quality matte printing and an easy-open tear notch. “We invested nearly two million ringgit to come up with a better presentation for this product so that when it goes out from Malaysia, it can ompete with anybody in the world,” stated Mr Tan, adding the caveat, “but of course, people buy your product first because of the quality, so no matter how nice the packaging is, if the content is lousy, it won’t be accepted. ” Munchys has also devoted much attention to packaging. From 1996, we have invested a lot into packaging, which we feel is key to bring out new products with Cracking foreign good concepts and more markets convenience,” said Mr Tan. Munchys is ready to take on the world and al(Munchini Giga Bite) is ready ships to some 50 desavailable in cartons containtinations. According to Mr ing ive 15 g sachet servings Tan, Japan is now the largas well as stand-up pouches est overseas market, taking with resealable zip opening in up to 10-20 containers a -“a first in this region,” month of some SKUs such notes Mr Tan. s the wafer sticks. “Their Instead of the typical market’s buying power is carton with side flaps for Munchys factory in Batu Pahat, covers 150,000 sq. ft of huge,” he observed, “but opening, Munchys flagship net factory space and houses 17 lines. The facility operates you can only penetrate it Lexus sandwich biscuits around the clock on 3 shifts and employs about 500 when ou get to a certain production workers. now come in a box with a level of quality and comperforated front flap. “This is a concept from Japan,” ex- mitment. ” plained Mr Tan. We are the first in Malaysia to use it to Taiwan is the next largest market and Munchys has been enhance our presentation. With this technology, we can also putting effort to build products like the Lexus calcium sandput in redemption coupons and contest forms. ” One stun- Wich crackers. “We created another name for it to really penning success is Munchys Muzic wafer cube range, which etrate the market, and this has been paying ff,” revealed saw sales rising from 7,000 cartons to 20,000 a month after Mr Tan. “For one product, we could be shipping about 10 it was launched in a stand-up pouch in 2002. ontainers a month to one customer alone. ” Baking wafer sheets and cubes at Munchys Munchys newest flat wafer line is a state-of-theart system delivered by Austrian company Franz Haas Waffel- und Keksanlagen-lndustrie GmbH. The plant consists of a 88 baking plates oven (the SWAKN 88), an archway cooler, a film spreading type creaming machine with vacuum stacker, a unique three layer cooling tunnel and a cutting machine. The line is very flexible, wafers, which can also be sprinkled with nuts or coated with chocolate.

Wafer book production Wafer batter is deposited onto the lower plates Above: An 88 baking plate oven (the SWAKN 88) from Haas. Below left: an archway cooler. Below right: a film spreading of the baking plate pairs which open at the oven type creaming machine. Bottom: Uncut wafer books enter a head. The baking plate on this oven is a self-sup- cooling tunnel. porting design that saves energy and allows uniform heat distribution. After depositing, the baking plate pairs close and run through he baking oven for approximately 2 minutes at about 1400C.

The baking temperature in the tunnel is controlled automatically and the oven can produce about 44 sheets per minute. When the baking plate pairs return to the oven head, they re-open and the baked sheets are transferred to a conveyor where they are automatically checked for the correct shape and dimensions and fed to the archway cooler (the archway allows staff to move to the other side of the line without having to go around the whole length of it). In the archway cooler the hot wafer sheets cool down before they are ready to be creamed.

Additionally they absorb some moisture which is especially important if chocolate-coated wafers are to be produced. If the wafer sheets are not stabilised at this first cooling stage, they may warp or swell and cause cracks in the chocolate coat. This is called the “crocodile effect” as the wafer layers in a low quality wafer bar open like a crocodile mouth. From the archway cooler the wafer sheets are discharged to a cream spreading machine. This machine uses the so-called film- spreading method where in a creaming head a cream film is applied continuously and evenly from above onto wafer sheets passing below it.

This method allows high- speed production and is especially suited for large formats, thick cream layers or viscous material like caramel. The machine can be programmed to produce different types of wafer bars with a different number of wafer and cream layers, respectively. The top sheets, which remain uncreamed, bypass the creaming head via a conveyor leading above it and are (Above) Fresh from the cooling tunnel, wafer books will be cut into cubes (above right) which fall into a hopper and are transported by a bucket conveyor to multi-head weighers.

Pouch filling is done on two Kawashima vertical form-fill-seal machines right). where it is pressed toa preselected height and then lifted by a vacuum plate. Next, a creamed sheet is fed into the station, the vacuum plate lowers and puts the sandwich onto the creamed sheet so that a wafer book consisting of three wafer layers and two cream layers is formed. This stacking process is repeated until the desired wafer book has been built. After creaming, the wafer books pass a checkweigher which checks their weight and controls the creaming head accordingly.

If so desired, the wafer books can be sprinkled with nuts or similar material before they enter the cooling tunnel. Before being cut to wafer bars, the wafer books must be cooled and excessive moisture must be removed from the cream to stabilise the product. For this purpose, Franz Haas designed a special cooling tunnel for Munchys. The tunnel has a length of only 33 m, but provides a cooling length of about 90 m due to its three-level design. The wafer books enter the tunnel at the top level from where they are transferred to the middle level by a flap at the end of the tunnel.

In the same way they are fed from the middle to the bottom level from where they are finally discharged to the cutting machine. Cooling is done by blowing dry air onto the products. The threelevel design allows a longer cooling time which contributes to better product quality and longer shelf life. Also, it also saves much more space than a one-level design and products are more gently handled as it would be the case with the up-and-down movements in a cooling tower.

Finally, the cooled wafer books move into the cutting machine where they are cut to smaller wafer fingers (wafer bars) by pressing them through cutting frames with vertically arranged cutting wires. After cutting, the products are conveyed to the ackaging lines. For pouch-packed products such as Muzic, Munchy uses two Kawashima vertical form-fill-seal packaging machines with a speed of 45 packs per minute each. Wafer stick production at MunchVs IN 2003, Munchy acquired a new wafer stick oven with electric induction heating.

This type of oven features low energy consumption, high heat efficiency of around 70% and produces no emissions. Additional features such as a double depositing device and the cream filling device make it possible to produce attractive twocoloured cream-filled wafer sticks. Batter strips are poured onto revolving heated baking ring of Above: on the Haas wafer stick machine, freshly cast iron. The baking ring has a around mandrels to form sticks. Below: diameter of 2. 2 m, which allows the cut wafer sticks are cooled in an elevator the simultaneous use of two bak- before transfer to the collecting conveyor. ng surfaces, using four rolling tools (two on the inner, and two on the outer side of the ring). After baking, stripping knives release the baked, but still flexible batter strips which are then wound around mandrels to form sticks. Both the ring and mandrels are controlled by PLC, frequencycontrolled drives. The sticks are cut to the desired length and transferred via a wafer stick elevator to the collecting conveyor. The machine’s capacity is partly determined by the dimensions of the product: for instance, it can produce up to 18,000 sticks per hour ofa stick 100 mm long and with an inner diameter of 9 mm.

Two-coloured batter strips can be produced when using a double-depositing device. A cream-filling device is used to fills cream into the sticks through small holes in the mandrels during the rolling process. And as tariff and trade barriers are trimmed with the formation of the ASEAN Free Trade Area (AFTA), Munchys is setting its sights on a greater share of the regional pie. New branch offices in ASEAN neighbours have been opened, and thanks to a more proactive approach in sales and distribution, ASEAN sales have seen a clear uptrend.

For instance, Mr Tan reveals that sales in Singapore have grown by more than 50% since 2003, making the island Munchys third largest export market. FOOD & BEVERAGE ASIA FEB/MARCH 2005 Still, Munchys export growth has been broad-based. “This year alone, exports have grown by close to 60%,” notes Mr Tan, citing vibrant demand in markets such as Bangladesh, India and Mongolia. “We used to ship one 20-ft container to Mongolia every 2-3 months, but this month alone, we shipped two 40-ft containers. ” At the same time, falling trade barriers are posing challenges in the form of intensified competition.

Arnott’s, for instance, is shipping products across the region from its Indonesia base. “The competition will only get more severe,” lose out with AFTA. ” Munchys is no stranger to harsh episodes, having weathered the 1997 financial crisis that broke out almost right after a major bout of capital investment. Thanks to careful planning and partners who believed in the company’s ong term potential, the company stood its ground. “We were lucky in that during those years when we developed and brought out the new products, we were able to enjoy substantial growth in the business,” recalled Mr Tan.

Marketing Munchys to Malaysia Branding, advertising and promotion occupy an increasingly vital function as MunchVs seeks to move away from standard, volume-led products to capture higher premiums. “Every year we are spending close to RM4 million on branding and ads, and this budget is increasing,” revealed Mr Tan. “We are now trying to put more ‘attitude’ into our products, with an upcoming concept called Colouring Moments with Cheeky Fun. Everybody else is so serious, but we want to really put in the fun’ element. Knowing the value of objective advice, Munchys has also engaged a global consultant to reassess its branding strategy for the future. Market researchers estimate that Malaysia’s biscuit market is worth about RM500 million. Mr Tan, however, feels that this is an under-estimate. “Munchys alone has over RM80 million and many of our competitors are also in that range. So the top three players have probably about 300 million and the next two have about 40-50 million. ” Because the surveys may have excluded wafer products, Mr Tan reckons a size of RM700-800 million is credible.

Munchys itself holds the top spot for wafers, with a 36% share of the category. The local market is also growing, as Malaysia’s population expands. “l look at every range of our products and it is growing every year,” said Mr cow or Just a market share item. ” Unlike their forefathers, younger consumers no longer believe in hoarding every spare dollar, but see not reason why it should not be Packed in a redesigned stand-up pouch, Munchys best-selling Muzic wafer cubes come in four flavours: chocolate, vanilla, hazelnut and strawberry. spent, thus giving rise o a sustained consumption boom. Today, it’s not so much about eating and making yourself full,” commented Mr Tan. “It’s eating for pleasure! ” Health is a increasingly a prime concern for many consumers, and thus confectioners such as MunchVs have been reformulating their range to feature less sugar, less salt, lower fat and high nutrient content. “Today, people are talking about the trans fat issue,” observed Mr Tan of one recent health issue that the mass media has been highlighting to consumers. Ultimately, he believes a balance must be achieved between good taste and health. Rolling out new developments

As it promotes the latest wafer launches such as Mint Tiger Bar and Muztc, Munchys already layF00D & BEVERAGE ASIA FEB/MARCH 2005 ing the groundwork for future rounds Being family-owned, Munchys is of new products. Mr Tan revealed that not unaware of the risk that blood ties the company has ordered a new wamay impede progress. The company fer stick line from Haas and added, employs many professional managers “We are now looking also into how to and Mr Tan stresses that all family expand beyond these three biscuit catmembers are expected to perform. gories [biscuits, wafers, wafer sticks] into new types of product. Once the just another manager – that has been new warehouse is completed, he exour practice. ” pects to have space for Munchys manufacturing needs for the next 3-5 Baking a brand that lasts years. “With this freed up space, we Munchys future goal is to entrench could put up two new lines. ” its brand in the minds of biscuit lovers Malaysia remains a conducive across the region. l foresee that in the production base, with easy access to next 10 years, Munchys will become key raw materials such as palm oil and a regional, rather than Malaysian, cocoa and a stable industrial environbrand,” said Mr Tan. We are aiming ment. “Our society is harmonious, so to produce products with world class we see Malaysia as a good manufacquality and build a long term brand that turing hub for an industry like ours,” really stands out. ” Top European wasaid Mr Tan. But eventually, he be- Looking to the future, C. K.

Tan of fer marques are now Munchys benchlieves Munchy would have to expand Munchys says: “Every year we are marks, and Mr Tan hopes to achieve a its manufacturing activities abroad to spending close to RM4 million on standard comparable with these imbetter reach out to its growing over- branding and ads, and his budget is ports. “Perhaps not 100% but 80-90% increasing. We are now trying to put more of their quality and at half their price,” seas markets. To better serve customers, the ‘attitude’ into our products… everybody he mooted. lse is so serious, but we want to really company’s marketing arm, put in the fun’ element. ” Putting Munchys into perspective, Munchworld Marketing, is shifting Mr Tan adds: “We are now looking also Mr Tan noted that the company is still from Batu Pahat to the capital Kuala into how to expand beyond these three a relative newcomer to the market, but Lumpur next year, and will also be biscuit categories [biscuits, wafers, wafer this was not necessarily a drawback. tasked with representing partners who sticks] into new types of product. “We are considered an infant when you wish to take advantage of Munchys nation-wide distribution network. a 100-year history,” he said, “but although we are still a young According to Mr Tan, Munchys track record qualifies company, we put in a lot of effort into R&D and with tothe company for listing on the main board of Malaysia’s days technologies and know-how, you could probably walk stock exchange. An initial public offering is certainly on the three steps ahead compared to the old days when you could agenda in the future, but Mr Tan explained that for the time only do things step by step. being, Munchys would prefer to “focus on company and “l think constant improvement is the key word for us. product development” before considering further funding Today, the machines, the technology, the know-how are availoptions. able. It only depends on which route you choose. If you always think you can only be second class, then you will always be second class. ” In the minds of consumers who have built up loyalty to his “upstart” brand, the name Munchys has already become a household confectionery icon.

Mr Tan recounted his experience at a recent food fair in Singapore, where he overheard a lady pointing out Munchys stand and telling her companion, “Hey, the quality of this brand is very good! ” Launched in 2004, Impromptu it may be, but such testimonials remain gratifyGiga Bite is a cream-filled short ing for Mr Tan. “It’s really showing that the effort we have wafer stick in chocolate and strawberry flavours. Various put in is paying off” packaging formats are available, including a resealable stand-up pouch. Enquiry No: 016

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