This time, Hotel Insider speaks with Ali Ihusaan, CEO of Happy Market, one of the country’s few major F&B specialists. Ihusaan talks about opportunities that cropped up early on and how the company capitalised on them. He outlines the company’s key areas of focus and specialisation, and gives us a glimpse of what to expect in the near future. Happy Market’s story is intriguing; particularly their knack for reading the market and figuring out how to keep most of their earnings within the company. Their model revolves around integration and keeping high-volume sellers at hand always. Read on.
Hotel Insider: Can you tell us what the market was like when you started out? What sort of opportunities did you see?
Ali Ihusaan: We began operations some 27 years back and at the time, frozen goods were a luxury. You didn’t have reefer (frozen) containers coming regularly to the Maldives. So that’s where we saw potential. We had shipping companies deliver frozen goods to Sri Lanka and then we’d air freight them here. Or we would have chartered vessels carry frozen items and offload the goods to our distribution ship (Freshmarket) our distribution point to the resorts.
Hotel Insider: That’s around the time when tourism was starting to eclipse fisheries as the main industry.
Ali Ihusaan: Yes, tourism was picking up and the founders of Happy Market foresaw immense potential in selling in bulk. Later we bought a ship that carried items from Sri Lanka to our delivery ship Freshmarket.
Hotel Insider: Yeah, I remember a ship that used to distribute goods here.
Ali Ihusaan: Yes, there was one that travelled between Sri Lanka and the Maldives [for goods] and another that was stationed here, doing storage and distribution. So, one ship would bring in the goods from Sri Lanka and the other would handle distribution. But due to unforeseen circumstances, we had to stop operating the two vessels. And our business was forced to change.
Hotel Insider: How did you change?
Ali Ihusaan: By the time we stopped operating the ships, there were parties that brought in reefer containers to the country and we utilised them. And we had already established a cold storage facility on land. Plus, we had a shop by the seafront, now called Unity 1, which was our distribution point. And rumour has it that we couldn’t even get the goods to the shop before they were sold out. Demand was that high. [laughs]. That’s when we started to become sustainable, bringing in supplies to an existing supply chain.
If you consider Happy Market as a group, by that time we were already operating what’s now Thulhagiri Island Resort. A major expense at any resort is food and drink. So, the owners of Happy Market wanted to funnel all major expenses of a resort through the companies they managed to increase efficiency. That was the business model. That’s where integration began.
Hotel Insider: And this sort of integration is what led to your expansion across market segments.
Ali Ihusaan: Yes, we started expanding to all available resort segments plus the local market although the latter wasn’t a priority at the time. We were a resort supplier.
Hotel Insider: You started with frozen goods but were there other areas of specialisation later on?
Ali Ihusaan: Yes, our first specialty was frozen foods. It’s our strength because running a cold storage is tedious. You have to regularly monitor temperature to comply with HACCP standards, for instance. It used to be that these checks had to be done manually but we’ve computerised the process now. And it’s a big barrier to entry. As we expanded, we went into different food segments like dry food and dairy. Our model was to make sure that we had what people consumed in significant quantities at hand always.
During expansion we added quite a few brands. One of our oldest brands is, in fact, San Remo pasta. We’ve been carrying San Remo for 22 years of our 27 years in operation. Our business was built on long term relationships, not only with our customers but also with our suppliers. I’d also like to mention that we place a high premium on our relationship with our staff. The oldest employee has been with us for 28 years – he joined a year before the company started [laughs]. Staff turnover is really low and they are very loyal. We have a number of people who’ve been with us for over 17 years.
Hotel Insider: That’s great. Now, let’s talk about your market share a bit.
Ali Ihusaan: In frozen goods, we rank very high. If you consider chicken, I think over 60 per cent of the frozen chicken that’s imported is ours. Add to this, sausages, chicken drumsticks, chicken breasts. We’re able to assess our market share through customs’ statistics.
Hotel Insider: All right. Twenty years ago, you trailblazed the frozen goods market and you ventured into tourism too. I’d like to know how the business grew in the 2000s.
Ali Ihusaan: Well, in the early 2000s, after acquiring a second resort, company founders discovered that pure drinking water was an issue to be addressed. So, around 2004, the founders came up with “Life” [a brand of bottled drinking water]. “Life” was among the earliest bottlers in the Maldives. Keep in mind that our strategy was to integrate horizontally and vertically. And around 2011, the company realised that fuel consumption had to be addressed as well. So, a company was formed for fuel import and distribution. We had a tanker with a capacity of around four million litres and a distribution vessel. We powered our bottling factory and our other businesses with that fuel so the cost was distributed within the company itself.
Hotel Insider: I see. Also, I’ve always wondered what people in your line of business do with products approaching expiry.
Ali Ihusaan: Oh, yeah that’s an issue. We had a separate outlet that managed such products, a place called Myshop, right outside our head office. When a lot of products neared expiry, there was a requirement to open an outlet to move those products quickly. However Myshop has since become a regular distribution shop of ours and close-expiry products were fast moved through promotions and other avenues.
Hotel Insider: Is Myshop a wholesale or retail outlet?
Ali Ihusaan: Wholesale. About 90 per cent of our sales is wholesale, which is our main focus.
Hotel Insider: I see. And how do you manage to keep on top of deliveries, especially to resorts who have strict time constraints?
Ali Ihusaan: It’s quite challenging to be honest. We only get about eight or nine hours to work because of changes to working hours – it used to be a round the clock service. So now, when we receive orders, we prioritise them and ready our delivery vehicles. And during this process the client will be kept up-to-date on progress until the goods are in their hands.
Hotel Insider: I also wanted to ask you if you’ve observed any food trends in the resort community.
Ali Ihusaan: Yes, there’s a trend for getting fresh, chilled meat rather than frozen. The meat is air freighted to keep freshness. We haven’t touched that market yet. And in the local market, we’re seeing a lot of meat, like beef and lamb gaining traction.
Hotel Insider: Before we part, can you tell us about your vision? And what are some of the things you’d like to do in the near future?
Ali Ihusaan: Our overarching vision is to distribute our frozen goods across the Maldives. And with this in mind, we opened a distribution centre in Addu in 2010. Our MD Mohamed Naeem is from Addu so it seemed a good place to start. One of our greatest challenges is that there’s very little capacity for transporting frozen goods within the existing transportation network. So, we have to take refrigerated containers by boat to Addu on a monthly basis.
Also, we want to emphasise quality in terms of service and products. At the same time, we want to focus on cultivating sustainable relationships with our customers. Right now, the market is very volatile; customers work on a weekly basis, finding out who’s the cheapest. There’s a lot of competition. What we want is for our customers to understand that at Happy Market, they will always get a great product at the lowest possible price for that quality. Of course, anybody can sell frozen chicken, but what they can’t do is ensure that it reaches customers while complying with strict HACCP standards at our price.
Furthermore, we’re planning to open distribution centres in Gaafu Dhaalu, Laamu and Haa Dhaalu atolls. Also, we’ve got something in the pipeline: having small franchises that sell our brands. There won’t be competing brands in those outlets for the brands we carry, in that sense they’ll be exclusive. But they can sell other non-competing items.
Hotel Insider: Like 7-Eleven eh?
Ali Ihusaan: Yes, a bit like that.
Hotel Insider: All right. Thanks a lot, Ihusaan.