LQC Invests in Itself to Keep Its Business and Customers Healthy
LQC is the No. 1 exporter of coconuts in its home country and manufactures products sold in 30 countries.
It is a good time in the market to be a producer of healthy foods. Many millennials and younger consumers are focused on buying nutritious products that will keep them healthy and in top mental and physical condition.
This puts Châu Thành District, Vietnam-based Luong Quoi Coconut (LQC) Inc. in a good position. The company, which is the No. 1 exporter of coconuts in its home country, also manufactures products that are sold in 30 countries and which provide key nutritional and health benefits.
According to COO Chad Huemme, these products include its coconut water. Before the rise of sports beverages, coconut water had a reputation as “one of the better hydrating liquids you could consume,” he recalls.
LQC also offers its virgin coconut oil, which has been used to treat eczema and is currently being tested in a Minneapolis hospital on infants and elderly patients. Caregivers are using the oil’s purest extract to treat dry skin. Manufacturers of health and beauty products also regularly use the oil as a base ingredient in their shampoos, soaps, conditioners and lotions. LQC’s clients include Costco, which uses it for its private-label coconut oil products.
Changing the Narrative
Despite the proven benefits of its products, LQC still encounters some resistance from consumers who consider them unhealthy. When the American Heart Association advised in 2017 that it believed coconut products could have negative effects on a person’s health, “We saw a decline in sales,” Huemme recalls.
One way LQC adjusted was by becoming a member of the Coconut Coalition of the Americas (CCA), which works to change the perception of coconuts and coconut products. CCA Executive Director Len Monheit says the misconceptions about coconuts go even as high as the U.S. Food and Drug Administration (FDA), which classifies it as a “tree nut.”
“It’s actually not,” Monheit asserts, adding that the coalition is working on a study to challenge the FDA’s classification. “It’s a fruit. Consumers are getting misinformed.”
CCA Communications Director Traci Kantowski agrees, adding that the currently available data on coconuts is out of date. She notes that this has driven some consumers to fear the saturated fats in coconuts, even though they are different from the fats they want to avoid.
“Coconuts and coconut oil can help people who are looking for a good source of fat,” she says, adding that the products can be used for blood sugar management. “It’s also a great non-dairy source if you have lactose concerns.”
She points to the work of Dr. Mary Newport, M.D., who has said that coconut oil can be used in the treatment of Alzheimer’s disease. “It definitely has a lot of benefits,” Kantowski insists.
Fortunately, LQC’s sales for all of its coconut products have increased in recent years. Not only do the coconut products appeal to millennials and younger consumers, but also to members of specific ethnic groups. “Many people in the Hispanic and Asian communities use coconut oils for skincare and cooking,” Huemme reports.
LQC regularly invests considerable resources in managing the certification requirements for its processes and products. This continued investment in QA and certifications ensures that LQC develops and provides a high-quality product. This investment has allowed the company to earn Halal, Kosher, non-GMO, FDA and HACCP certifications, just to name a few.
LQC continues making investments to maintain not only process and product certifications but also state-of-the-art manufacturing equipment. For example, the company’s FDA certification requires it to regularly have its factory inspected and pay for the cost of the inspection and re-registration each time a new process or piece of equipment is introduced to the manufacturing process.
The certifications also require LQC to work closely with its growers to ensure their practices are in alignment with specific standards. Its organic products, for instance, require a specific type of spacing when planted and a certain fertilizer to be used in the area around the coconut tree.
These steps, Huemme asserts, are key in the entire process of delivering top-quality, coconut-based products to health-conscious consumers. “They want to see these types of things being done from a plant-growing and process manufacturing perspective,” he says.
It also has been important for LQC to invest in technology for the manufacturing and packaging of its coconut oil, water, milk, cream and other products. Today, the company uses highly automated equipment to complete many of the processes in its day-to-day production.
This has given LQC a competitive advantage in its market. “We’re able to increase our service level as we’re decreasing our lead times for production and delivery,” he says.
According to Monheit, this summer is going to be a very important one for the coconut industry as it celebrates the third annual National Coconut Day on June 26. For the occasion, “We’ve got a lot of social media exposure and support from the Southeast Asian government,” Monheit says.
The theme of the day will be “coconut sustainability.” Although there are many best practices for companies to follow, “They’re not well documented and communicated,” he admits, adding that LQC will take part in helping to promote these practices.
Huemme adds that the company plans for more growth as it continues investing in its operations. This will include the addition of a new warehouse to be used for the storage and packaging of raw materials and inventory of finished goods.
The company also recently revamped the look and the brand messaging of Vietcoco, which is its brand in Vietnam. In addition, the firm is adding to its product portfolio “in terms of different water flavors and a milk beverage,” he says, adding that these will hit the market in 2022.