Tanduay aims to enter Europe within 3-5 years

TANDUAY DISTILLERS, Inc. (TDI) looks to enter the European market within the next three to five years, as it scouts for opportunities to bring its rum brand overseas.
“I think Europe will be our next market… that’s within three to five years. What we really need is a distributor,” TDI Chief Financial Officer Nestor C. Mendones told reporters after a company press conference last week.
Mr. Mendones cited the current weakness of economies of European countries, which affords them a chance to break into the market.
“Depressed yung economies (sa Europe ngayon) eh, so yung mga high-priced drinks walang maka-afford, so may chance makapasok ang Tanduay (The European economies are depressed right now, so not many can afford high-priced drinks, Tanduay has a chance),” he said.
The TDI executive added the company is looking at offering the Tanduay Asian Rum brand to the European market.
TDI currently exports its products to Hong Kong, United States, and United Arab Emirates through various distributors. Sales to these markets account for less than one percent of TDI’s total sales.
Mr. Mendones said the company has seen challenges in penetrating the US market. While he noted that rum is one of the highest growing drinks in the region, TDI has had to face different regulations in every state.
“Sa US kasi, iba-ibang state, iba-ibang regulation, iba-ibang distribution setup. Hindi gaya ng Pilipinas na isa lang gagamitin mong strategy for the whole Philippines. Saka very strict sila on advertising (In the US, states have different regulations, different distribution setup. Unlike in the Philippines where you can just use one strategy for the entire country. The US is also very strict on advertising),” he explained.
Recently, TDI announced that Tanduay is now the best-selling rum in the world, overtaking global rum brand Bacardi. The higher sales was primarily due to higher sales volume in the Visayas and Mindanao areas, following the company’s more aggressive advertising campaigns there.
The company sold 19.5 million cases in 2017, a 17% year on year jump. Meanwhile, Bacardi sold 16.8 million during the period, or 3% lower the year before.
With this, TDI booked a 12% jump in revenues to P16.79 billion in 2017. Net income, however, slumped by a third to P633 million due to higher input costs.
In the first quarter, TDI’s net income also slowed by 35% to P135 million, while revenues were flat at P4.243 billion.
TDI is part of tycoon Lucio C. Tan, Sr.’s LT Group, Inc. (LTG) The listed conglomerate also has core interests in banking through Philippine National Bank, tobacco through PMFTC, Inc., and property development through Eton Properties Philippines, Inc. — Arra B. Francia