Financial Times

Ceylon Cold Stores (CCS) or Elephant House, placing its faith on a product that has been enjoyed by generations, is investing Rs 700 million on enhancing its soft drinks through upgrading machinery and diversifying product lines.

It is also developing its packaging and flavours and leveraging its brand strength and distribution network in boosting the popularity of Elephant House drinks.

“The company had made a bold move in committing an investment to expand and increase production,” said Jit Gunaratne, president of the F & B Group of John Keells Holdings Limited.

Gunaratne said in an interview that the company’s investments on expansion will continue and would boost1 more than 90,000 outlets it had island wide. In line with the changes the company envisages to suit consumer preferences, the Food and Beverages Group is also planning on introducing new pack sizes for the popular soft drinks as part of the investment. Asked whether there was any intention to change the now familiar shape of the 400ml glass bottle, Gunaratne said that they have no plans in making such a move since these glass bottles have become a household trademark.

“We have plans of new pack sizes and new disposable packs, but we will remain with the existing ones (bottles),” he added.The company is also planning to increase volumes of Ginger Beer stocks in the overseas markets where sales are exceptional. Elephant House Ginger Beer is now sold in Australia, Thailand and some limited European countries in addition to its home market – Sri Lanka. With regard to the frozen confectionery sector especially ice-cream, he said: “There will be more innovations in this sector in the next three months.”

The company is planning to launch a PR and brand awareness campaigns aimed at improving the image of its supermarket chain. “We have planned to put up 50 more supermarkets by the end of 2007,” Gunaratne said.

CCS is changing its strategy aimed at focusing on increased manufacturing productivity, reduced costs and improved distribution efficiency by bringing these activities under a single supply chain function.

“This was done as a synergistic effort towards upgrading our operations,” said Gunaratne.

The company hopes to invest on constant research on consumer and market behaviour in order to offer more value to its customers. “We believe in improving our product standards in accordance with the customer insights and intermediary feedback,” he said.

CCS is facing growing competition from multinational players but believes that enhanced employee productivity and cost savings on the supply chain would enable them to face such challenges in the market.

“Competition is good as long as it is for the benefit of the customer,” Gunaratne said.

With consumers shifting preferences towards natural products, Ceylon Cold Stores will work in line with these trends and adjustments to product lines will be done accordingly. “Our main concern is ‘convenience, nutrition and value’ to the customer,” he said.