Fraser & Neave Holdings Bhd Annual Report 2021

One of the most discernible changes brought about by Covid-19 has been a surge in online shopping. Although this is a global phenomenon, market observers have identified Asia-Pacific as the region that will see the greatest growth in online purchases. According to Forrester, e-commerce in the region will grow from USD1.5 trillion in 2019 to USD2.5 trillion in 2024, at a compound annual growth rate (CAGR) of 11.3 per cent. Of particular note, the fastest growing purchasing category will be groceries, which is expected to see a CAGR of 30 per cent. 5 Other than shopping, people are also looking at online platforms for information, entertainment and to connect with others who are like-minded. 5 https://www.forrester.com/press-newsroom/online- retail-will-reach-us2-5-trillion-in-asia-pacific-by-2024/ In recent years, there has been mounting evidence that the food and drinks we consume have an effect not only on our physical health but also our mental and emotional well-being. With the pandemic, and an increase in psychological stress, demand for food that is calming while being nutritious has been on the rise. At the same time, for ethical and health reasons, more people are converting to a plant-based diet. While they seek products that will enhance their well- being, consumers are also wary of false promises and seek science-based evidence to support claims made by F&B brands. The halal market has been growing steadily over the last few years, with the food and beverage segment widely acknowledged as being one of the fastest-growing consumer markets globally. According to Research and Markets, from 2015 to 2020, global halal F&B grew by USD412.33 billion, and that it will continue to expand at a CAGR of seven per cent up to the year 2026. 6 The research organisation further notes that, as Asia Pacific has the highest Muslim population in the world, this region contributes to almost 90 per cent of the total halal market share. 6 https://www.prnewswire.com/news-releases/global- halal-food--beverage-market-report-2021-market-grew- by-over-400-billion-during-2015-2020---market- analysis--forecasts-2015-2026-301348307.html • We continue to expand our o$erings and explore di$erent order fulfilment options in our flagship online store, F&N Life in Malaysia, and nom aroi in Thailand. This financial year, we have added an e-order platform for customers, making it easier for them to replenish their stocks. • We have leveraged digital tools and social media to enhance our consumer/ customer engagement. For example, in Malaysia, we partnered with eWallet platforms like Touch ‘n Go and Boost to o$er value-add promotions and presented 100PLUS-sponsored virtual workouts to help our consumers stay active during the MCO. • In Thailand, we continue to build hawkers’ loyalty using our LINE app, which has attracted close to 200,000 members. Meanwhile, our internal ‘Fraserian Connect’ app has become the key communication platform with our employees. • Focus on reducing the sugar content of all our beverages since FY2004 has resulted in a 61 per cent reduction in our sugar index from then up to FY2021. This year, we increased the portfolio of products that carry the Healthier Choice (HC) logo in Malaysia and Thailand to 69. • We further a!rmed our commitment to promoting healthy lives and lifestyles with F&N Group’s Nutrition Guidelines, based on the World Health Organisation’s recommendations. With that, we commit to having all our products free from trans- fatty acids, and >70% of our products should contain less than 5% added sugar. • We also cater to consumer preferences that have become more diverse through alternative options such as F&N Magnolia Lactose-free Milk and 100PLUS Zero. • This financial year, we expanded into halal packaged foods with the acquisition of Sri Nona Companies. We are keen to grow this new business pillar further both organically and with further investments. • All our products are halal-certified. Our strict Halal standards and robust assurance system have enabled Shah Alam and Pulau Indah plant to be awarded the Whitelist status by JAKIM, in which Halal applications and approval are fast- tracked. • E$orts to promote halal F&B led to F&NHB winning the Halal Food and Beverage Excellence Award at the World Halal Conference 2020 organised by HDC, while FNDT was named Thailand Best Halal Company of the Year 2020 by the Central Islamic Council of Thailand. F&NHB is also one of the 54 constituents in the newly introduced FTSE4Good Bursa Malaysia Shariah (F4GBMS) Index. ALWAYS ONLINE HOLISTIC WELL$BEING GROWTH IN HALAL MARKET Management Discussion & Analysis 047 Fraser & Neave Holdings Bhd ! Annual Report 2021