By Justine Espina-Letargo in MANILA ‘It’s just a matter of reinventing the wheel,’ reveals Alfredo M. Yao of his successes in various business ventures, something that has made him one of the most inspiring businessmen in the Philippines today. It is his innovation which has earned him the moniker as the country’s ‘juice magnate’ for introducing his own winning brand of affordable juice drink called Zest-O, which drives his latest undertaking in the skies.
Yao’s hard work and perseverance made Zest-O juice drinks into a household name and earned him the Ernst & Young’s Master Entrepreneur award in 2005 for trailblazing in the food packaging business. The company, Zest-O Corporation, was adjudged the Most Admired ASEAN enterprise in the innovation category in 2007, and recognized for contributing to the growth and prosperity of Southeast Asia.
Zest-O’s product line of juice drinks, fruit sodas, kitchen condiments and purees command 80 percent of the total market for ready-to-drink juices in the country. Its mango purees are exported to China, Australia, New Zealand, South Korea, Singapore, the US, and Europe.
The brand has even spurred a fashion revolution. The durable and flexible foil packaging of the juice makes for efficient recycling into handbags that are likewise exported to many countries, providing income to micro-entrepreneurs.
In recognition of his pioneering character, the Philippine Chamber of Commerce and Industry, where Yao is vice-president, annually gives away the Alfredo M. Yao Intellectual Property Innovation Awards to budding Filipino investors and innovators.
Enterprising since an early age wrought by dire circumstances, the 68-year old Chinese mestizo of mixed Chinese and Spanish ancestry whose roots can be traced back to Fujian province, has taken off to conquer the skies with Zest Air.
Established in 2008, the budget airline joined four local low-cost carriers (LCC) in domestic and international routes, but Yao thought it best to bring tourists, particularly from China and South Korea, straight to two of the country’s most popular tourist attractions.
“I have to innovate. We’re after a niche market, and by going directly to these destinations, I won’t be competing with these other airlines,” Yao explains his decision to not contend with other LCCs for a slice of the tourist market in the region via the usual routes.
Last year Zest Air began taking passengers from the cities of Shanghai in China, and Incheon and Pusan in South Korea to the island paradise of Kalibo, in Aklan province, home to the world-renowned beaches of Boracay. By June, the airline will inaugurate flights from Kalibo to Beijing, and from Cebu to Shanghai.
Yao learned early on that the Philippine islands offered everything that Chinese tourists wanted. “We have beaches, our people are very hospitable and right for tourism,” Yao said after he himself helped to promote the country’s attractions by serving as a special envoy to China for tourism cooperation.
Hand-picked by former president Gloria Macapagal-Arroyo, the former ambassador contributed in organizing the country’s travel agencies; advising them on how to effectively package destinations to woo more Chinese to the Philippines. As a full-time businessman nowadays, Yao continues to underscore the importance of making it more convenient for tourists, particularly the Chinese, to come to the Philippines, citing relaxed visa policies as a good place to start.
“We lose our competitiveness,” he explains, referring to the circuitous process it takes for a Chinese tourist to obtain a Philippine visa. China’s proximity to the country, and its fast-growing market for tourism is an advantage which Philippines cannot afford to lose, he says.
With 2010 recording an 18 percent hike in the number of visitors to the country from China, Yao sees great potential for expanding his business in the competitive airline industry. After only 3 years of taking over from an old airline company, which he says was similar to “building it from the ground up”, Yao quickly transformed it into his own.
Yao embarked on a re-fleeting program while introducing sound and best practices in the management of the airline. “We are very service-oriented,” says Yao, who attributes the growth of his latest venture to being a fast-learner - having no background himself in the aviation industry - and having the right people,.
The competition might be tough, with some airlines taking in-flight entertainment to the extreme by offering a live dance demonstration, but Yao takes the no-frills approach in attracting customers. The airline’s introduction of the Voyager Pass, for one, is aimed at making it simpler to book and buy tickets.
Despite some initial hiccups when it took to the skies, Zest Air’s passengers rose from 950,000 in 2009, to 1.4 million in 2010. Passenger sales grew 60 percent from the first quarter of 2010 to the same period in 2011. Yao expects to hit their 3-million passenger mark this year with their fleet expansion that will in turn increase more flights and reach more destinations in the country and overseas including the Middle East.
Yao’s optimism is matched by observers in the industry who predict that budget airlines such as Zest Air will fare better than so-called ‘legacy’ carriers. Aviation officials believe that more and more passengers will forego the comfort that goes with wider and roomier aircraft when traveling, especially on short flights.
With the collective effort of government agencies attracting investors to build much-needed infrastructure in the country that includes airports, seaports and road networks, Yao says this could auger well for the industry as well as boost tourism. The former tourism ambassador to China knows full well how the sector generates jobs for his own countrymen.
Before he became a success in diverse business projects – from printing, packaging, food and beverage manufacturing, realty, trading, to banking, Yao worked many odd jobs since he was 12, when his father died, leaving him and his mother to care for his five siblings.
Without an inheritance or family business empire to support his family, his childhood was marked by hardship. It was up to Yao, the eldest, to help his mother feed the family, by selling goods on the sidewalks of Binondo, Manila’s Chinatown, augmented by tips he received at gambling dens. It’s been almost five decades since those days of destitution when they wondered where their next meal would come from, but Yao recalls them as if it was just yesterday, unmindful of the tears flowing freely down his face as he tells the China Daily Asia Weekly. He is however, not hardened, but rather, humbled.
Yao is not ashamed to say he comes from the school of hard knocks or he never completed his college education. While he did finish elementary and high school, Yao says he learned much from his mother who was the source of his strength and inspiration.
With so much to be thankful for, Yao is giving back. He uses local fruit suppliers for his juice drink company, which has led to the revival of the local orange and citrus-growing industry in Southern Luzon province.
Yao also gives educational scholarships in the local high school he attended. He did not earn a college degree. So when he’s asked to lecture, he reminds students of the importance of studying hard and finishing school.
And while big business is synonymous with big tax evaders in the country, Yao has been recognized as an outstanding taxpayer in his local community in Caloocan City, and in Quezon City.
Yao is one businessman who may be flying high, but remains firmly grounded.
China Daily Asia Weekly on June 10, 2011, page 24