Age didn’t stop him from quitting his job to raise cows. Now, he’s the 43rd richest M’sian.

Farm Fresh is my go-to milk brand because of its comparatively affordable price, and convenience stores such as 7-Eleven always seem to have it stocked up whenever I’m in a pinch for some milk. Given its familiarity, you’d think I would’ve known that it’s a Malaysian brand much earlier, but I didn’t.

It wasn’t until recently when I came across a video of Loi Tuan Ee, the founder of the brand, that I realised that the brand was local. Wanting to get down to the history of how it began, I looked further into it, and here’s what I learnt.

A fresh start

Loi Tuan Ee was 42 years old and working in a packaging company for 20 years. With a senior position and a sizable income, Loi seemed to be set for the rest of his life.

But in 2005, he quit his job.

It’s not surprising that his family and friends were concerned about the move. He was making around RM500K a year at a listed company, after all.

But Loi decided to move on because he felt that the packaging industry at the time was hard to sustain. Plus, the company he worked for was run by a close-knit family, which meant family interest and public interest often clashed.

So, with some cash in hand, he decided to start an agricultural venture, which he felt was a more sustainable industry.

As a self-described “kampung boy” from Perak, Loi had grown up with agriculture. In an interview with Channel News Asia, he said that his parents were rubber tappers who grew tapioca.

“Now if you ask me to think back, it was indeed quite a big gamble because you already got it (wealth), and now you’re putting it back into something you haven’t tested,” he said in a talk with Khoo Hsu Chuang for The Ethical Entrepreneur. “But I was quite determined in a sense that if I were able to build a food business, it would be something evergreen.”

But Loi didn’t immediately start with dairy. Initially, 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.

Coincidentally, there was a 500-acre plot that was available across from his farm. So, Loi took the plunge and switched out his goats and fish for 60 Holstein cows, imported straight from Australia.

The early days

Cows, Loi learnt, are not exactly easy animals, especially if they’ve been flown in from Australia. Of course, Malaysia’s tropical climate played a part, but there were blood parasites to think about too.

Logistics was also a tough thing to figure out, as it wasn’t financially sensible at the time to buy a chilled truck yet, but the company needed to get its milk from Johor to places like the Klang Valley. Thankfully, Loi was able to find workarounds, and Farm Fresh made its way into supermarkets.

Speaking of which, Farm Fresh may be easy to find in supermarkets now, but that wasn’t always the case. In the beginning, Loi said the company only had a small facing (the number of identical products on a shelf turned out toward the customer, strategically placed according to sales), and customers would have to look carefully to spot Farm Fresh’s products.

Furthermore, due to low equipment investment, the shelf life of the milk was shorter than his competitors’ as well.

Loi’s solution was to spend a lot of time on the selling floor alongside his old friend-turned-business partner, Azmi Zainal.

“Until today, if I go to the selling floor, I will see if they don’t take Farm Fresh, and I’ll still say ‘Auntie, why don’t you try this?’” he shared in the episode of The Ethical Entrepreneur.

Through his time working the floor, he found that the customer retention of Farm Fresh was good. So, the next step was to scale up.

Along with Azmi, Loi was able to bring in an institutional investor—Khazanah National, the strategic investment arm of the government.

According to Loi, the government was actually promoting agriculture as a business. So, with Khazanah’s involvement, Farm Fresh was able to further grow.

Farm Fresh made its debut in the main Bursa market earlier this year in March, 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.

As of today, Loi Tuan Ee and his two siblings’ accumulated wealth has enabled them to debut on the recent Forbes Malaysia’s 50 Richest 2022 list, and they sit at the 43rd spot.

More than dairy

After more than a decade in the industry, Farm Fresh has grown its 60 cows into around 6,000, according to a Facebook post in September 2021 by the brand.

But following the market trends, Farm Fresh has also gone beyond dairy to offer plant-based milk such as soy milk, oat milk, and almond milk.

More recently, Farm Fresh has also opened up its Selangor farm for visits. Visitors 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.

With global brands such as Dutch Lady and Nestle having been in Malaysia for years, it’s impressive that Farm Fresh has established itself as one of the top names locally. According to an article by the New Straits Times, Farm Fresh commanded 42% market share in chilled ready-to-drink (RTD) milk as of the first nine months of 2021.

Other than growing locally, Farm Fresh is also showing plenty of potential for expansion abroad. A March 2022 article by The Star reported that the company is looking to expand to other Southeast Asian countries, namely Indonesia and the Philippines, while upping its presence in Singapore.

It seems like Loi was right to have traded those fish for cows after all.

• Learn more about Farm Fresh here.
• Read other articles we’ve written about Malaysian startups here.

Featured Image Credit: Farm Fresh