Farm Fresh has become a household name in Malaysia. Practically every store from 7-11 to Village Grocer provides a selection of Farm Fresh-branded milk and yoghurt products for people to enjoy. Given that Malaysia is not exactly known for being a dairy-friendly country, it may surprise some people to learn that Farm Fresh is 100% local.
Join us as we explore the story of a risk-taker who left his comfortable, half-a-million-ringgit career to found one of Malaysia’s most successful local franchises.
From Packaging To Cattle
When Loi Tuan Ee was 42, he had a very lucrative career in the food packaging industry. For 20 years, Loi rose up the corporate ladder to senior positions, earning around RM500,000 a year. He was the head of the marketing department and even worked with huge companies such as Sony and Panasonic.
And yet Loi felt he was limited in how far he could go in his career.
“It was a very closely-knitted family business,” he recounted, adding that as an outsider, it would have been difficult for him to take things to the next level.
Growing up in a kampung in Setiawan, Perak, Loi developed a passion for agriculture and decided that his new career path should follow in this direction.
I have this love for agriculture, because of my (background) in the kampung. My parents were rubber tappers and they grew tapioca.
I felt that I wanted to come out to do something that is more sustainable. Evergreen … and resilient. And that’s one of the reasons why I opted for agriculture, to produce food products. – Loi Tuan Ee, founder of Farm Fresh
Thus, with cash in hand, Loi left his comfortable corporate job in 2005 to start a dairy farm.
Unsurprisingly, many of his friends and family warned him against making such a risky decision especially when he was already making half a million ringgit a year.
I think my wife was very worried. My sister was thinking, ‘Gor (brother), are you sure you want to do something like this?’. So I said (to them): ‘Let me try’.
A lot of my friends felt that I was crazy. – Loi Tuan Ee, founder of Farm Fresh
Amidst claims that he was undergoing a mid-life crisis, Loi persisted in his new venture. In 2006, he purchased 500 acres of land for the farm in Kampung Mawai, near Kota Tinggi. The farm is a 20-minute drive from the nearest main road and has no cellular reception.
That’s what we could afford then. When we first came in, the place was part of a forest.
During the initial years, I spent a lot of time here, maybe six days a week. I would stay in that living quarters so that I could set up the farm. – Loi Tuan Ee, founder of Farm Fresh
From Goats To Cows
Initially, Loi didn’t even start with dairy. Instead, he went for things such as goats, dragon fruit, and Arowana fish. They were more niche products, so scalability was low. But because of goat’s milk, he noticed there was a big opportunity in the dairy space.
Eventually, Loi would purchase 60 Holstein Jersey cows from Australia. Of course, raising milk cattle in our tropical country with so many blood-sucking parasites was tricky, so the volume of milk production was low. Logistics was also a tough thing to figure out, as it wasn’t financially sensible at the time to buy a chilled truck, but the company needed to get its milk from Johor to places like the Klang Valley. These on top of facing issues with getting loans from banks to purchase livestock and infrastructure.
If you want to do other established industries, like palm oil, for example, the bankers are more than happy to lend you. But if you want to buy cows, they are very, very worried about it. – Loi Tuan Ee, founder of Farm Fresh
Fortunately, Loi would receive his big break from Khazanah Nasional, the strategic investment arm of the Malaysian government, invested in his company. Today, 30% of Farm Fresh is owned by Khazanah’s investment vehicle Agrifood Resources Holdings.
Loi noted that he had a stroke of good luck as the opening of his farm coincided with a period when the government was looking to invest in agricultural businesses to promote national self-sufficiency.
The True Cream Of The Crop
Thanks to this financial backing, Loi was able to turn Farm Fresh into an economic powerhouse.
We were doing RM9 million in business for the whole year (in 2012) and then fast forward nine years later, we are doing RM9 million in business a week. So that tells you how much we have grown. – Loi Tuan Ee, founder of Farm Fresh
From its humble beginnings in 2008, Farm Fresh’s popularity started to grow. According to a 2019 report by AC Nielsen, the brand has the largest market share for fresh milk in Malaysia, garnering more than half of the consumer share in the peninsula. And in March of 2022, Farm Fresh made its debut in the main Bursa market, with an initial public offering price of RM1.35. With an enlarged issued share capital of 1.86 billion, this means Farm Fresh’s IPO market capitalisation was approximately RM2.5 billion at the time.
Meanwhile, on the export front, Loi said that Singapore is the company’s largest market, mainly due to the geographical proximity to its farms in Johor.
We have been exporting to Singapore for the last three or four years. Of late, I think it is gaining very fast traction there as well.
I think a lot of Singaporeans have started to appreciate our product and I think that in the coming years, there will be a lot of effort towards Singapore. – Loi Tuan Ee, founder of Farm Fresh
Today, besides its pilot farm in Kampung Mawai, Farm Fresh has four other farms in Desaru (Johor), Muadzam Shah (Pahang), Taiping (Perak) and Universiti Putra Malaysia (Selangor). According to a Facebook post in September 2021 by the brand, the humble herd of 60 cows has grown to an astounding 6,000.
Loi credits much of this growth to one of his most successful projects – the breeding of milk cows that can thrive in tropical climates.
In 2012, The Holstein Milk Company acquired an Australian genetic company that was set up by the Queensland government. Through cross-breeding, this company developed the Australian-Friesian-Sahiwal cow, a breed more suited to the tropical climate.
Loi said this new breed has been invaluable in ensuring that Farm Fresh maintains a high volume of milk production, as its supply line is “constantly behind demand”.
It’s a very strategic investment for us because all our dairy breeds are coming in from Australia. This ensures we have enough generic (breeds) coming back to Malaysia to support our growth. – Loi Tuan Ee, founder of Farm Fresh
Reaching New Frontiers
Farm Fresh is still growing and aims to reach higher places, continuing to focus on its regional expansion and growth strategies amid the challenging macroeconomic environment.
In its annual report, the integrated dairy company said it remains upbeat about potential revenue streams that lie ahead.
In the Philippines, our factory at San Simon is expected to be completed and commence operations in September 2023.
This will be an important market for us to develop and grow in the next few years. – Farm Fresh Annual Report
Following market trends, Farm Fresh has gone beyond dairy to offer plant-based milk such as soy milk, oat milk, and almond milk. Additionally, the company has plans to introduce growing-up milk powder and embark on the sales of consumer-packaged goods (CPG) ice cream by end-2023, further diversifying its product portfolio and capturing new opportunities for growth. To demonstrate this desire, Farm Fresh acquired a 65% stake in the ice cream company, Inside Scoop, earlier this year.
We aim to leverage its existing resources and infrastructure, combined with the strong reputation of Inside Scoop and the expertise of its founders, to introduce CPG ice cream under the brand by end-2023. – Loi Tuan Ee, founder of Farm Fresh
Loi also said the group’s acquisition of a 90% stake in Melbourne, Australia-based premium dairy company, St David Dairy, will provide Farm Fresh with access to the brand’s well-established client base.
This includes Melbourne’s leading cafes, restaurants and retailers, along with their range of award-winning fresh milk and cultured butter.
This will in turn unlock synergies by enabling us to utilise the capacity of our Australia-based processing facilities and expand our product portfolio. – Loi Tuan Ee, founder of Farm Fresh
Farm Fresh has also opened up its Selangor farm for visits, where guests can dine in at The Acre by Farm Fresh, which serves Italian and Malayan fusion. There’s also the Cream Hauz, where soft serve made out of Farm Fresh’s milk is available.
As a sign of its successes, in 2021, Farm Fresh was recognized as one of Asia’s Best Performing Companies, at the Asia Corporate Excellence & Sustainability Awards 2021, organised by MORS Group.
The ACES award means greatly to us as the internationally recognized award is testament to the high standards that we have set for ourselves in terms of being a successful business both financially as well as being a leader in promoting sustainable business practices. This award will further motivate us to do what’s right and positive for our staff, community and environment. – Loi Tuan Ee, founder of Farm Fresh
Overall, it seems Loi was right on the money to trade in those goats for cows.
Ethical And Sustainable Farming
In keeping with his love of nature, Loi created Farm Fresh to be ethical and sustainable. It places great importance on sustainable and humane farming in its upstream dairy operations, coupled with fresh, pure and natural dairy ingredients with no usage of preservatives and colourings in its production process, whilst delivering innovative dairy products to its customers via a multi-channel distribution strategy which includes its successful and socially impactful home dealer network.
Indeed, Farm Fresh’s farms in Malaysia are the first in Asia to receive the Certified Humane® Raised and Handled® certification, showing that the dairy products that come from their farms meet the precise, objective standards for the humane treatment of farm animals.
Farm Fresh has also created a positive community impact in the upstream and downstream segments of the dairy industry. The company has improved the livelihood of local farmers by paying a fair price for their milk, ending decades of mistreatment of local dairy farmers who were underpaid for their milk, transforming the lives of more than 2,500 families across Malaysia, by engaging them as micro-entrepreneurs through the home dealership program.
According to its 2023 Sustainability Report, Farm Fresh has 336.7 million litres of Farm Dairy Effluent (FDE) recycled and removed from waste discharge, 88.3 million kg of solid waste recycled and removed from waste discharge,1,748,730 kg of chemical fertiliser removed from the cycle and 500.5 million litres of municipal water saved through rainwater harvesting and tube well pumping.
Additionally, Farm Fresh’s carbon intensity in its Malaysian farms is 17% lower than the average Asian dairy farm and has recruited 72% of its workforce from rural communities in Malaysia.
You can grow, you can make money, but then again, how do you treat your animals? Are they well looked after and things like that? And how about your employees? – Loi Tuan Ee, founder of Farm Fresh
Farm Fresh is yet another example of an inspiring story; a story of a man who left his comfort zone to find success elsewhere. It is an example of a company finding great success whilst also following an ethical and sustainable business model. And it is an example of a Malaysian startup expanding its reach on an international scale.
People may have thought Loi was undergoing a midlife crisis when he quit his previous job. But in reality, he was simply expanding his horizons.
I think we wanted to build a brand and someday, people will appreciate this as a company where all our stakeholders from our customers, our employees, our animals, are well taken care of. – Loi Tuan Ee, founder of Farm Fresh
Explore our sources:
- A. Yusof. (2021). ‘My friends felt I was crazy’: From working an office job to running a milk empire in Malaysia. Channel News Asia. Link.
- C. Khaw. (2022). Age didn’t stop him from quitting his job to raise cows. Now, he’s the 43rd richest M’sian. Vulcan Post. Link.
- Farm Fresh targets regional growth, new products. The Star. Link.
- Farm Fresh Wins At The ACES Awards 2021. (2022). ACES Awards. Link.
- Farm Fresh Sustainability Report 2023. Link.