MANILA – Filipinos are switching to premium hams for Christmas, mirroring robust consumption and helping processed meat maker CDO grow sales by as much as 12 percent this year despite higher import costs, its president said Thursday.
Premium hams have overtaken cheaper variants and now comprise "a little over half" of sales, as consumers buy them for gifts and for their Noche Buena tables, said CDO Foodsphere president Jerome Ong.
"A lot of people have been trading up because of the increased spending power. That has given us a good mix that allows for profitable growth," Ong said in an exclusive interview with ANC’s The Boss.
"By and large, we are riding on this economic growth that the Philippines is having right now," Ong said.
Gross domestic product grew 6.9 percent in the third quarter, among the fastest clips in Asia. Analysts also predict a boost in consumer spending when personal income tax rates are slashed under President Rodrigo Duterte’s reform push.
Ong said the peso’s weakness from 2016 padded the cost of importing pork and other ingredients, squeezing margins. Labor costs also rose from the previous year.
The company raised prices by 5 to 6 percent this year after holding off on an adjustment in 2016.
“Like in price adjustments, whenever there’s opportunity to reduce prices we’d like to do that. We’d like to stay competitive,” he said.
Batangas-based CDO might consider opening facilities in the Visayas and Mindanao, as logistics costs make up 6 to 7 percent of product costs, he said.
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