We are live at NetSuite's 2018 SuiteWorld Conference.
I'm Michael Krigsman.
I'm an industry analyst and the host of CxOTalk.
We're speaking right now with Gary Loh, who is the CEO, the founder of SunMoon Foods.
Hey, Gary.
How are you?
Thank you, Michael.
I'm good.
Gary, tell us about SunMoon Foods.
We are trying to use a brand to sell products, consumer products as well as fresh products,
to educate consumers about what fresh fruits are all about.
This is really a company that we are now trying to change a model that was asset heavy where
we used to own plantations, our own packhouse.
We've abandoned that heavy asset model to a very much asset-light model.
The asset-light model really requires us to understand what the consumer wants and when
they want it.
We are turning SunMoon Food into a company very much where the brand explains about what
the benefits of eating apples or having oranges or even avocados.
We're introducing new products like avocados into markets, for example, like in China,
and telling the benefits of avocados and what are the good stuff you can do with it like
salads and spreads.
SunMoon is really now concentrating on communicating with the consumer, understanding their needs,
especially in a busy world that we are all living in today.
That's kind of what SunMoon's focus is now on.
You have a set of relationships with suppliers all over the world.
That's right.
The transformation that we turned this company around, it was a company that had 1,900 acres
of plantation, which is one acre is equivalent to one football field.
We had 1.2 million trees, and we had a huge packinghouse to pack the foods.
Now, that model didn't work, so it was a very asset-heavy model.
They wanted to start it off being the one dragon.
Well, I guess the dragon doesn't exist, right?
We chopped off that head and turned that brand to the consumer and turned that brand into
something that basically would be more relevant.
We began a multiple-source from different farms, and then bring that product to the
consumer.
It's very much an asset-light model, similar to an Airbnb or an Uber.
Rather than owning plantations and focusing on growing trees, you're focused on the consumer
and the customer experience.
That's precisely what we're trying to do.
We realize that the data that we are getting from the front, which is basically the consumer
experiences that you talk about, is far more valuable than just getting the trees.
When you become a farmer, that's really what you need to do very, very well, and it's not
an easy task.
When the old model was going down that whole supply chain of owning everything that we
had, we realized that we couldn't use that model to operate in the new world that we
have.
We really need to concentrate on knowing the customers, knowing the consumers, and really
understand how the buying pattern affects our patterns of working with the other products
and buying from the different countries at the different seasons.
What are the levers of your business model?
What are the elements that drive success in your business?
I think the key thing that has started off for the company was to be able to have access
to the various countries that we were operating in — to be able to have that various network:
supermarkets to the convenience stores to the wholesale centers.
And then to be able to understand the different countries' requirements or regulations.
The products went in, right?
That was how we started the whole business.
Then, we leveraged on it by saying, "Well, you've got the access to the markets."
Now, we are in 22,000 points of sale.
We are probably selling to almost 100 million households right now.
We have about 157 suppliers.
We have about 100 SKUs.
All that requires us to understand what's going on, what we're buying, and where we're
selling it to.
I guess the main level is to ensure that we leverage on that network that we have, make
sure that we get the right products to the right marketplace, to the consumer at the
right time.
You've been growing very rapidly.
Well, it's been fortunate that this model actually has worked.
On the topline level, we've been seeing growth growing at about 100%, so we hope that this
momentum continues.
You're growing 100% a year, you are a public company, and you have got tentacles reaching
out to suppliers, to consumers.
How do you keep track of all of this?
And then, the product you're selling is perishable.
Yes.
[Laughter] [Laughter]
Well, yeah.
That's the essence of it all, right?
I needed to make sure that we have a dashboard to be able to see what's going on to feel
the pulse.
The ERP system was kind of key.
This is where we chose NetSuite OneWorld to be able to see everything on a dashboard.
I always use the example of, I was like Captain Kirk in Star Trek, and in my Enterprise.
I needed to know what's going on.
I can't run to the engine room and ask Scotty what's going on.
That's the key thing that we wanted to do, so we operated using an ERP system.
On top of it, we added another layer, which is the SuiteCommerce Advanced, which allows
us to now be able to communicate with our B2B customers, as well as the B2C customers.
Then it builds upon the data going down to the ERP system.
Now, that really allows you to share with the suppliers that supply to us, as well as
the consumer data that we're gathering, to be able to then share that information and
do something that's more collaborative, making sure that we are transparent, which is not
really the kind of trait that the perishable trade used to be.
I think, having that information now being available in an ERP system really is the difference.
You're managing the business through all of this data that's collected in one place.
That's correct and being able to share that to everyone who is part of the ecosystem.
What is that important?
Why is that information sharing so important?
I think one of the most important things, as you said earlier, is about being perishable.
The truth of the matter is, no fruits leave the packhouse because, usually, you know where
it's going to go and then how long it's going to be on the shelf.
That kind of information to see the whole supply chain is key to everything that we
do.
Being this perishable detail, it's almost like it's just in time.
[Because] that data, in the past, wasn't available, we were doing a lot of guessing games, right?
Now, I think it's a little bit of the art of sciences, basically, to manage that data
well.
What are you doing, going forward, given the importance of this transparency?
What are you doing going forward to ensure that you maintain the transparency and also
increase that transparency?
Well, I think one of the new technologies that we're really exploring right now is blockchain.
We're basically exploring it, how to get that blockchain into place because is how do you
determine that you bought the apple, how is that apple and the details of the apple, and
how do you reach the consumer?
It's to really use that as one of the areas.
Then, of course, the IoT of things, to track from farm to fork.
How did that fruit arrive to the consumer?
Being able to then see that data right now is going to make the difference.
With that, it just increases the transparency so that you have an ERP system that is one
place, now with blockchain and IoT of things.
The last layer, I think, is natural to put AI into place and then help us buy better
so that we can sell better.
That information is then shared better.
Regarding blockchain, how far along are you?
A lot of people are talking about blockchain, but it's one of those things you don't see
too many practical projects these days.
Yeah.
Well, the truth is, it's not the easiest thing because it's sort of like making it work together
with a system that we have.
We're happy to say that we're almost at the trial.
We're going to go into a trial run, literally making sure that we can track an apple from
a packhouse all the way to the end consumer, and then making this into a prototype and
making sure that all that data is captured.
Then, maybe that's what we're really trying to achieve.
Maybe, sooner than later, we'll be announcing this.
Are you pretty confident that you'll be able to do this?
Yes.
Fantastic.
I'm happy to say that.
Gary, thank you so much.
Michael, thank you for the opportunity.