A veterinarian and former instructor left the comfort of the University of the Philippines’ campus in the mid-1980s to go into poultry farming. Today, his integrated food production and supply business employs 1,800 people and leads the transformation of food retail in the country.
“We now have 1,800 employees, from farms to feed mills to stores,” says Robert Lo, the president and chief executive of Pampanga-based RDF Feed, Livestock & Foods Inc., which is engaged in poultry and livestock production, feed manufacturing, meat processing, meat shops, restaurants and food delivery service. RDF refers to Red Dragon Farms. RDFFLFI is the parent company of RDF Meatshop Inc., which operates the Fresh Options chain of meat shops.
Lo, 57, who graduated with a degree in Veterinary Medicine from UP Diliman in 1983 before the course was transferred to Los Baños, decided to become a quail farmer in Novaliches, Quezon City in his initial foray in business in 1986. The quail business did not take off as quickly as he hoped, so he ventured into poultry farming in Pampanga as a contract grower for various companies.
“I practised as a farm animal veterinarian. After graduation, I was invited as a college instructor at UP. But the salary for instructor was low at that time and they transferred the course to Los Baños. I got tired of going to Laguna area, so I decided to go into business, with the support of my parents,” Lo, who is known as Doc Robert, says in an interview at a restaurant in Makati City.
Lo’s Binondo-based family owns a company that runs Ketch department stores in Manila and Quezon City. His decision to go into integrated farming would later build an even bigger company that is now considered a top taxpayer in Pampanga province, although he insists that RDFFLFI remains a medium-sized enterprise.
RDFFLFI owns state-of-the-art poultry farms in Pampanga and Tarlac with a combined capacity of over 1 million birds and swine farms with more than 3,000 sows. It also operates its own feed mills to supply the requirements of the farms and plans to open modern slaughterhouses soon. RDFFLFI has six restaurants and aims to open more next year. It has 84 meat shops under the Fresh Options brand and 64 Fresh Option Express outlets in Central Luzon, Metro Manila and Calabarzon.
What makes Lo more excited is a technology that he hopes to introduce in the country from the Netherlands, where his employees have received training recently. RDFFLFI will launch a food vending machine at SM Clark in September and hopefully in Metro Manila in the following months, he says.
Opportunities in crisis
Lo believes there are opportunities in times of crisis, which can be overcome by technology and innovation. “We don’t have to invent the wheel. We can just pick it up and use it,” he says. Lo says RDFFLFI employs some of the brightest minds in the food supply business as consultants who recommend the best technologies to develop new products.
“We have five or six consultants. I am very open to suggestions. We want to empower our people,” he says. Lo says of the company’s 1,800 employees, about 400 are professionals including engineers, veterinarians, food technologists and technical experts who comprise the research and development team.
“In our product development team, we have the R&D group, which is composed of the chef and the food technologists. The chef provides the art while food technologists provide the science for consistency. We are combining art and science in our products,” he says.
Lo says as the only company-owned and company-operated agri-food system business, RDFFLFI ensures the high quality of its products which go through the cold chain, from farms to stores. The co-co system allows RDFFLFI’s team to closely monitor each stage of the production process, he says.
Lo registered his company in 1988 under the name Red Dragon Farms because the first two names he submitted to the Department of Trade and Industry were rejected. “It was my third choice. I just got the name from the title of a book and it was the one approved by DTI,” he says.
He became a contract breeder first with San Miguel’s Magnolia, then with Purefoods and RFM Corp. In 1991, Mt. Pinatubo erupted and destroyed all four farms of RDF in Pampanga. He picked up the pieces and rebuilt the farms. As the success of the business hinged largely on the contracts with those companies, Lo felt the business would thrive on its own and so he started his own commercial growing business.
“But we still bought chicks and feeds from others,” he says. He noticed that the feed suppliers were earning more from his business, so he decided to use his nutrition background to formulate his own feeds—thus the start of feed milling business. He installed feed mills inside each farm to ensure that chickens ate quality feeds. It also kept production cost manageable.
The poultry business grew over the next five years until 1997, when massive importation and smuggling of chicken leg quarters hit the local industry. “That time we lost a lot of money. Fortunately, smuggling stopped, allowing us to recover. But we decided we could not depend on just one product, so we also ventured into swine business in 1999,” he says.
In 2000, he established Lodestar Feedmill and Veterinary Products and E-Pig as two separate companies. The swine farms included breeding, farrowing and fattening operations.
To further hone his entrepreneurial skills, Lo obtained a Master in Entrepreneurship from the Asian Institute of Management in Makati City in 2003.
Business expansion
Lo says in poultry and livestock growing, it is the traders who control the market. “Traders earn more than producers and they control the market. So in 2005, we started our own meat shops under the Fresh Options brand,” he says.
Fresh Options stores carried pork, chicken meat and meat products that were bred, raised, dressed, processed and delivered in-house. The stores also sold beef, marinated meat and ready-to-cook food.
Fresh Options now has stores in Pampanga, Tarlac, Zambales, Bataan, Pangasinan, Nueva Ecija, Bulacan, Metro Manila, Cavite and Laguna. It also became the trusted meat and meat products supplier of different hotels and resorts in Luzon, including major restaurant chains, upscale coffee shops and food stall franchises.
Lo says the business grew because the company tried to find opportunities in every problem it encountered. “When there is a crisis, you try ways to solve the crisis and you see this as an opportunity to grow further,” he says.
Lo started the meat processing business, RDF Meatshop Inc., to solve the problem of slow moving products in 2008. “We developed new and value-added products to solve the problem of slow moving items,” he says. He established a meat processing plant or central depot in Porac, Pampanga in support of the meat retailing business.
RDFFLFI went beyond meat shops and established the food and beverage group in 2011. It opened full-scale restaurants and cafés such as Roberto’s Coffee and Tea and Meats & Match. These restaurants now have branches in Balanga, Olongapo City, Guagua and SM Clark. “We are opening more branches this year,” he says.
In 2012, Red Dragon Farm, Lodestar Feedmill and Veterinary Products, E-Pig and RDF Meatshop Inc. were consolidated into one corporation known as RDF Feed, Livestock and Foods Inc. In 2016, RDFFLFI launched Balanghai Filipino Buffet.
Vending machine
Lo feels that a new business concept will change the way Filipinos order meals. “The new one which I am really excited about is using the food vending machine,” he says. He will introduce the vending machine inside Robbie’s Gourmet Deli at SM Clark. “Hopefully by Sept. 9, we’re gonna open at SM Clark,” he says.
Robbie’s Gourmet Deli supplies pre-cooked and cooked food for city workers such as business process outsourcing professionals looking for convenient and affordable meals. Lo says with the use of vending machines, Robbie’s is set to change the way meals are sold in the country.
On what’s driving the expansion of the business, Lo says the growth of the Philippine economy and the good business climate with the availability of low interest rates allow RDFFLFI to continuously grow.
“We have gained acceptance in the market and we are still growing. Secondly, a lot of banks are offering soft loans. That’s why we got the opportunity to grow with the good business climate.
Because of the better economic condition and GDP growth, meat consumption in the Philippines rose 50 percent over the past several years. But we’re still lagging behind Southeast Asian countries in terms of meat consumption. So that’s an opportunity for growth,” says Lo.
Lo, who now lives in Angeles City, says Pampanga proved to be a good initial market for the company. “When we put up our first Fresh Option store in 2005, we spread streamers around Angeles and that’s how we got their attention. Pampanga consumers look for quality products and that is why they stick with our products,” he says. Lo says RDFFLFI stays true to its mission as a trusted partner and preferred provider of high-quality fresh meats and value-added food products and services in all the markets it serves.
“We try to keep our quality, using our chiller freezers. We observe the cold chain all throughout. We never break the cold chain,” says Lo, a former president of the Philippine Veterinary Medical Association, a former chairman of Philippine College of Poultry Practitioners and a board director of United Broiler Raisers Association.
Lo expects that by 2020, RDFFLFI will open more stores and serve more markets in Calabarzon, La Union, Benguet, Isabela, Tuguegarao, Cebu and Cagayan de Oro.
Employees’ contribution
Lo, who owns about 97 percent of RDFFLFI, says he is giving his management team a chance to have shares in the company. “I opened up to some chosen employees, about 55 of them. They can buy 30 percent of the company at a discount,” he says. “This is because they are responsible for the growth of the company and I have to make them stay.”
Going public or listing with the Philippine Stock Exchange is not yet in Doc Robert’s plan, saying he would rather tap bank loans, given the available low interest rates. “I also would like to decide by my own,” he says, while clarifying that he has a number of consultants whom he listen to.
Lo, deriving lessons from his own experience, advises other entrepreneurs to look beyond problems. “There is always a solution to any problem. Not only solution, but opportunities. You should be innovative. That’s the game now—innovation. We are early adoptors of technology. If there is a new technology, we adopt. We are hungry for new technologies,” he says.