10:34 am | Friday, September 26th, 2014
Goldilocks new business director Pinky Yee
MANILA, Philippines–The first Goldilocks store was opened in 1966. And despite the passage of the years and changing tastes, the Goldilocks group has managed to hold its own.
In this discussion, Goldilocks New Business Group Director Pinky Yee talks about what worked for the company and what is in store over the next few years.
Q: What has Goldilocks been doing right all these years for it to hold on to market leadership in the cake industry?
A: I believe that the main reason we have maintained market leadership all these years is our balanced focus on both thought leadership and brand connection.
We have succeeded in firmly establishing Goldilocks as a pioneer and trendsetter in the bakeshop industry through constant innovations in our products and services.
At the same time—and with equal effectivity—we have created an emotional bond with our consumers that is difficult to rival and impossible to quantify.
By doing so, we have not only dominated “top-of-mind-awareness” ratings, but “share-of-heart” rankings as well.
As such, Filipinos do not only have a favorite Goldilocks product, but a favorite Goldilocks story.
Moreover, while our brand is recognized as an expert in our field, we are simultaneously seen as an essential part of Pinoy celebrations and everyday sweet moments, making these moments delightful and meaningful.
The first Goldilocks store opened in 1966, and today after 48 years, its first wave of customers are now grandparents. The brand has sustained its growth and has maintained market leadership mainly because of its unparalleled presence is nearly all of the Filipino family’s milestones.
Moreover, Goldilocks continues to evolve and be relevant to the times through its product innovations, targeted to a new generation of customers.
Q: How have you defended your middle class turf?
A: The middle-class market is quite discerning: as far as bakeshop goods are concerned, price is not the main determinant of their preference.
Filipinos have a well-defined belief and distinct image of what an affordable and delicious baked product tastes like, and a good sense of valuation to go with it.
Pricing, as a strategy to gain market share, must be complemented by an overall product proposition.
Instead of competing merely on price, we chose to compete on value, and address our consumers’ usage of the Black Forest Cake. One must be insightful to determine that opportunity.
What would happen if we combined two product categories: the all-too familiar cake rolls (a Goldilocks Signature product line), and the premium cakes (which are traditionally round)?
A product innovation was born when we merged these two product formats, which we aptly called the premium cake rolls.
The intent was to come up with a new and unique category which was higher priced than the traditional cake rolls, and yet, more affordable than the round premium cakes.
We introduced the Black Forest Cake Roll and this became a hit among our customers, as this addressed their desire for an affordable, delicious cake.
We also introduced Black Forest singles, and as the name suggests, it is single-serve—a reasonably priced product, readily available, packaged and presented better than the usual slice of cake.
With all the different formats—the single serve, cake roll, round cake—our Black Forest premium cake has addressed various price points and usage for our discerning customers.
I am happy to say that they all co-exist, and our new categories have given our customers more reasons to patronize the Goldilocks Black Forest Cake.
Q: Up to 1986, Goldilocks had only eight stores. Today, the network has grown to some 400 stores. What was the trigger that made Goldilocks change its growth goal in 1986?
A: Our extensive store locations actually began emerging in 1991. We realized that to fulfill our strategic growth plans, we had to partner with highly motivated entrepreneurs who shared Goldilocks’ ideals. This is when we launched our Franchising Program, and the phenomenal expansion that Goldilocks has achieved since then is evidence of the working relationship we have with our franchisees.
At present, around 2/3 of our total stores in the Philippines are franchises.
More notably, more than half of our franchisees are multi-unit owners, which is the best indication of satisfaction.
Internally, to have a store network in all the major islands and key cities in the Philippines poses a major challenge, as baked goods must be delivered fresh to our stores.
We are both a manufacturer and a retailer, and hence, we needed to have manufacturing facilities in Luzon, Visayas and Mindanao, to support our store expansion in various areas.
Q: What made Goldilocks enter the packaged products category like ready-to-eat dinuguan, rellenong bangus, popcorn? How do you maintain quality and freshness expected from your brand?
A: Years of experience already showed that certain products were the favorites among our customers.
We validated this through quantified market research, and narrowed down which product would be prioritized for a new format.
Because of the demand for our dinuguan in our bakeshop-only stores, our R&D worked with the Dept of Science and Technology (DOST), to come up with a product innovation, which will address accessibility, and at the same time, deliver consistent product quality.
The Pinoydeli line was introduced in 2003, and its first product, the Pinoydeli Dinuguan, is a one-year shelf life product, that has no preservatives and is shelf stable (no refrigeration needed).
We pioneered this product concept in its initial phase: selected top selling foodshop products will be made available in our bakeshop-only stores nationwide.
Due to its success in domestic sales, this product line is now exported to countries where large concentrations of Filipino communities exist.
Consequently, our Pinoydeli line of ready-to-eat dinuguan, lechon paksiw, and laing represents a revolution in freshness and convenience.
Caramel popcorn on the other hand, has always been in our product line. For those who remember the Rustan’s Department Store in Cubao from the 1970s to the ’90s, we had a Caramel Popcorn kiosk just outside the Goldilocks store.
Since then, we have moved our production for this product to another location, and improved our packaging.
It is still the same caramel popcorn taste that we all enjoy today, with a enhanced and more modern packaging design.
Q: Goldilocks has many home-run innovations. Can you share with us some of these that made big sales and profit contributions and what were the key insights?
A: Goldilocks has become synonymous with birthdays and other special occasions, since we introduced the concept of Celebration Cakes to the market.
These are skillfully designed cakes that have toys and figurines as part of its decoration.
Since the 1990s, Goldilocks has owned the exclusive cake licenses to the most popular cartoon characters from Disney, Marvel, Warner Bros., DC Comics, Cartoon Network, and Nickelodeon, allowing kids to choose their favorites among a wide selection of characters.
We choose and select the licensed property for our cakes, at the same time, we are forward-thinkers, in that we are in tune to what would be the “in” and “it” characters that will be well-received by our market.
To offer a value-for-money proposition for moms and kids, we recently created birthday cake packages which have cupcakes and chocolate lollipops. For those who would like “instant” occasion cakes, we innovated the concept of Theme Greeting Cakes, which come in an assortment of designs, both in licensed and generic themes.
This is “pester-power” at its finest, and parents will rarely say “no” to a cake request from their children on their birthdays.
With the increasing awareness for health and wellness in the past decade, we carefully picked the product categories that will address this growing trend.
In the late ’90s, way ahead of legislation, we started to use bromate-free flour and re-formulated our bread line. Seeing the trend in the United States, in 2005, Goldilocks was first to introduce and pioneered “Zero Trans Fat” breads here in the Philippines.
Currently, our HealthTinapay loaf breads are not only trans-fat free, but are also cholesterol-free and Omega 3-fortified.
Secondly, one of my favorite projects was the launch of Go Lite: sugar-free mamon and no-added-sugar chocolate butter slice.
This was actually based on my own insights as a fitness-conscious person with a sweet tooth.
Also, there was the opportunity to serve a niche market who had dietary restrictions, such as diabetics and weight-watchers.
It turned out that the market out there was larger than originally forecasted, and the Go Lite line has remained.
Our Goldilocks Pusong Mamon carried over our inimitable classic mamon and turned it into a literal heart-shaped mamon with caramel filling. With the advent of packaged goods and brands coming up with their own version of mamon, Goldilocks delivered a unique expression for love and thoughtfulness, and took the market by storm when we launched just less than a year ago.
For our foodshops, I would say that an innovation that we introduced in 2000, that we are able to sustain up to today, is our Party Funfeast line.
The insight for this product category is this: when there is a cake order, there is a party or a get-together. Whether it is a big or small celebration, for the home or office, our Party Funfeast line provide consumers with a variety of product offerings in different sizes, in take-out buffet packs, or solo packs.
Over the years, we have enhanced our product offerings and in 2009, we launched Fiesta Pack – which is perhaps, the pre-cursor to the group meals we see today.
At that time, we wanted to come up with a value-for-money offering that would be affordable for our customers. We have since come up with new variants of Fiesta Pack, and continuously upgrade our packaging to make our Party Funfeast offerings, a staple in Pinoy get-togethers. (The author is chair of marketing training company Mansmith and Fielders Inc. For the complete interview, please visit
www.josiahgo.com.)
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