By Bernie Cahiles-Magkilat
Filipino-owned Jollibee Foods Corp. (JFC) is not scared of America’s giant fast food chains, but is strategizing to grow slowly but sustainably and give giants McDonald’s and KFC a run for their money.
In an interview with CNBC’s Christine Tan for Managing Asia, JFC President and CEO Ernesto Tanmantiong said they can be a major player in the QSR market in the US in the future. At present, JFC is less than a quarter of McDonald’s and KFC which are big fast food giants in the US where the Philippines’ JFC is trying to get a slice of the huge pie.
“The beauty of our company is that we invest for the long term. We plan to grow slowly but sustainably for the long term, and in the future we expect to be a major player,” said Tanmantiong.
Last year, JFC completed the acquisition of the US burger chain, Smashburger, and also acquired a stake in Mexican chain, Tortas Frontera, which also is a US brand.
Tanmantiong revealed plans of more acquisitions in the US focusing on companies that have strong superior products and the potential to grow, so that the conception can be scalable.
“We are looking at companies that more or less fall within the quick-service restaurant segment or the fast casual segment,” he said.
The expansion overseas is part of the overall strategy to generate half of your sales from outside the Philippines, from the current 30 percent to 50 percent in five to seven years. The local JFC is expected to growing to account for 50 percent of sales.
At present, JFC in the Philippines has more than 3,500 stores. The other 1,000 is coming from the foreign businesses.
“So, we see the Philippines continues to grow and therefore we’re looking at a total of 10,000 stores – where 5,000 will come from foreign businesses and 5,000 from the Philippines – in the future,” he said.
In 2018, the entire JFC sales grew by 23.7 percent and profit rose by 17 percent. Last year, the company also opened more than 500 stores globally, the most number of new stores in a year.
“I think that that’s the formula for growth and the formula to achieve our vision. We need to grow organically as well as do strategic acquisition,” he said adding they intend to keep the pace of store openings this year.
Last year saw the opening of its first store in the UK, in Milan and also in Toronto, Canada. They just entered Malaysia and Guam. They intend to conquer new markets this year such as Australia, Indonesia and other Southeast Asian countries.
For China, Tanmantiong said they may enter this market in the near future. But, he said that they have to prioritize the overseas Filipino markets because, “We have been asked by our overseas Filipinos to open Jollibee stores in their markets.“ He noted that their expansion overseas is driven by demands from OFWs.