Jollibee slashes capex, eyes delivery to recover from COVID-19 lockdown

MANILA - Jollibee Foods Corp said Tuesday it would reduce its planned capital expenditures for the year as the coronavirus pandemic disrupts operations.

Capex for 2020 was cut by 64 percent to P5 billion from P14 billion due to "operational constraints" and "limited mobility" caused by the COVID-19 pandemic, Jollibee told the stock exchange. 

Deliveries accounted for 5 percent of total sales in the early part of 2020, from 3 percent during the same comparable period in 2019, the Philippines' largest fast food operator said. 

Select stores in Luzon were closed from mid-March due to the lockdown, which was extended until April 30. Stores that stayed open were limited to drive thru, takeout, delivery and selling ready-to-cook meals.

Jollibee is eyeing “full restoration” after the lockdown is lifted with its delivery business driving recovery, said CEO Ernesto Tanmantiong.

“While the COVID-19 pandemic has brought unprecedented disruption to our operations in the Philippines and other parts of the world, we are already planning for the full restoration of our operations. We expect growth to resume even if gradually, driven by our Delivery, Take-Out and Drive Thru business channels,” Tanmantiong said. 

Jollibee has donated P100 million worth of food from its brands to frontliners. It would allot another P120 million in food aid for the marginalized sector, JFC said.

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Jollibee 'ready-to-cook' items for sale during COVID-19 lockdown

MANILA - Jollibee Foods Corp said Friday it made available ready-to-cook items in select stores for take-out or drive thru after it closed outlets to dine-in customers during the 1-month lockdown of Luzon.

A limited time offer "ready-to-cook" menu went viral online which includes the marinated and spicy version of its famous Chickenjoy. 

In a response to a Twitter user, Jollibee said "the ready-to-cook-items are available in Jollibee stores nationwide that are open for take out and drive thru, until supplies last."


Ready-to-eat beef tapa, tuna pie, french fries and grated cheese are also available, based on the menu. Participating branches are listed on its official website, JFC said.

Restaurants are allowed to operate take-out and delivery services during the Luzon-wide COVID-19 lockdown effective until April 12.

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Chicken out? Serve Chickenjoy: How Jollibee took on McDonald's

MANILA -- Instead of chickening out, Jollibee offered fried chicken and focused on a delicious menu, its CEO said, recalling how the firm took on McDonald's to become the Philippines' largest fast food operator.

When McDonald's entered the Philippines at the start of the 1980s, Jollibee only had 12 stores. The young chain's founder, Tony Tan Caktiong, hired a foreign consultant to map out a strategy, said the current CEO, Ernesto Tan Mantiong.

At that time, Jollibee stores were behind in look, equipment, systems and process, except in one area: taste, Tan Mantiong told a recent dinner roundtable with businessmen in Manila.

"Instead of chickening out, we served Chicken Joy," Tan Mantiong said, referring to Jollibee fried chicken, which it eventually exported to its foreign outlets.

"We were warned that when McDonald's entered the country, it tended to wipe out local competitors. We were told to just give it up and do other businesses and not to confront the global giant," he said. "So Tony sought the help of a foreign consultant, who was an expert in corporate strategy."

ICE CREAM BEGINNINGS

Before setting up Jollibee, Tan Caktiong and his then girlfriend, Grace, set up 2 ice cream parlors, one in Cubao and another in Quiapo from a seed capital of P350,000.

"Since they plan on getting married, they applied for a franchise for their livelihood," Tan Mantiong said.

After a few months of operations, Tan Caktiong and his brothers found out that consumers craved hot meals and burgers, which eventually replaced the ice cream-heavy menu, Tan Mantiong said.

"Since we were now selling primarily hot meals and burgers, we thought it would be good to change the name of our stores," he said.

WHY JOLLIBEE?

Naming the business was a long process, Tan Mantiong said. The word "Jolli" was inspired by a helicopter used during the Vietnam war called "Jolly Green Giant," which the Tan family spotted during an exhibit in Clark, while "bee" was suggested by Tan Caktiong’s wife Grace.

Disney’s Mickey Mouse and Donald Duck were inspirations for the group’s mascot, Tan Mantiong earlier shared in an interview with CNBC.

The country’s largest food operator has since introduced different versions of its logo including "flying bee" and a "standing bee."

ASIA’S PRIDE

Jollibee reached its first 1000th store milestone in 2017. Today it has over 1,400 stores in 16 countries, Tan Mantiong said.

The Jollibee group has 6 brands in the Philippines and over 3,420 stores, he said. Globally, the company has a total of 15 brands and over 5,800 stores in 35 countries, he said. 

Jollibee acquired US-based burger chain Smashburger as well as the Coffee Bean and Tea Leaf brand. It has invested in Mexican-American Tortas Fronteras, and has franchise interests in other global brands such as Panda Express, Dunkin Donuts and Pho24. 

"It is heartening to know that to this day, the Philippines is the only country in the whole world where a local company beat the global leader in its own game," Tan Mantiong said.

"I’ve learned that it is important to always dream big with passion and commitment. Even when we started out, we dream big and even though many thought it was crazy. And it was that crazy dream that brought us to where we are now," he said.

Even after 40 years, founder Tan Caktiong still has his eyes on potential acquisitions or brands with "great tasting food" and a scalable model, his brother and successor said.

Looking back, with a shoebox of letters from his wife Susan to remind him of past challenges, Tan Mantiong said the company he helped build "had come a long way."

"There will be many more challenges along the way, but I truly believe that the best is yet to come," he said.

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Jollibee eyes China, US as next 'pillars of growth'

MANILA - Jollibee Foods Corp on Monday said it planned to have 3 strong pillars of growth, namely the Philippines, China, and the US. 

Jollibee intended to grow its foreign business faster than its local units, the country's largest fastfood chain operator said in a disclosure to the stock exchange. 

"The long-term goals of JFC are to have 3 strong pillars of growth – Philippines, China and USA. However, it does not mean that the Philippine business will slow down, the intention is to have its foreign business grow faster than its Philippine business," JFC said.

JFC aims to fulfill this goal in "10 years or more," the statement said. 

The group has been growing its footprint in the US, with its most recent acquisition of Coffee Bean and Tea Leaf in a deal worth a total $350 million (P18 billion).

Last year, Jollibee took a 47-percent stake in Mexican chain Tortas Frontera. It also took full ownership of US-based burger chain Smashburger.

Jollibee may also open its first store in China in the near future, its CEO Ernesto Tanmantiong said in an earlier interview with CNBC. The group operates the Dunkin Donuts franchise in China. 

In the Philippines, Jollibee, Chowking, Greenwhich, Red Ribbon, Mang Inasal, and Burger King stores are part of the JFC portfolio.

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Jollibee may open first store in China 'in near future', CEO says

MANILA - Jollibee Foods Corp may expand its home-grown fast food chain brand in China within the next 5 years, its CEO said.

JFC operates a Dunkin' Donuts franchise in China. 

It also has 8 stores in Hong Kong where 40 to 50 percent of customers are "local Chinese," JFC president and CEO Ernesto Tanmantiong told Christine Tan in an exclusive interview for CNBC's Managing Asia. 

"In China, hopefully in the near future we will be able to enter the market," Tanmantiong told CNBC. 

When asked when will the first Jollibee open in the mainland, Tanmantiong said: "We're looking at within 5 years, where we should be able to do that."

The brand's expansion strategy is focused on the areas where there are a lot of Filipinos, expanding to local markets after that, he said. 

"We build the base and slowly cross over to the mainstream market, which is the local market. We have done that successfully in Hong Kong and in Singapore," Tanmantiong said. 

There are 6 stores in Singapore where 50 percent of customers are also locals, he said. 

Last November, JFC said it planned to expand the number of its stores in the US to 150 in 5 years and add 100 branches in Canada. Both countries have many migrants from the Philippines.

Jollibee is also planning to open its first store in Rome and in Spain and is also exploring other markets including Australia, Indonesia and other Southeast Asian countries, Tanmantiong said. 

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Jollibee invests in US Mexican food business Tortas Frontera

MANILA - Jollibee Foods Corp on Friday said it has entered into a venture with award-winning Chef Rick Bayless and his Tortas Frontera brand to build a Mexican fast-casual business in the United States.

In a letter to the stock exchange, JFC said it would invest $12.4 million for 47 percent membership interests in Tortas Frontera business founded by Bayless.

JFC said its subsidiary Jollibee Foods Corporation (USA) closed the transaction on Dec. 21, as it sought to expand its presence in North America, the country's largest restaurant operator said. 

Jollibee with Tortas Frontera will build "a significant business" in the fast-growing Mexican food category in the United States. The Mexican food industry in the US had an estimated sales of $40 to $45 billion in 2017, the company said.

"This venture is very much in line with JFC’s mission: to serve great tasting food and spread the joy of eating to everyone," the statement said. 

Jollibee confirmed in July that it was looking to acquire a Mexican brand in the US to challenge the world's top fast food operators. 

Tortas Frontera has 4 restaurants in the US while Jollibee, which recently took full ownership of US burger chain Smashburger, operates a total of 3,079 restaurant outlets in the Philippines.

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Jollibee takes full ownership of Smashburger

MANILA - Jollibee Foods Corp on Friday said it has taken full ownership of US-chain Smashburger, raising its stake from 85 to 100 percent.

In a disclosure to the stock exchange, JFC said its subsidiary Bee Good! Inc has acquired Smashburger Master LLC's 15 percent stake for $10 million.

"JFC is now the sole owner of the Smashburger business," the restaurant operator said.

"We look forward to the development of Smashburger into a very strong brand and business in the United States," JFC Chairman Tony Tan Caktiong said in a statement.

Current Country Head for North America Jose Minana will assume additional responsibility as President of Smashburger, JFC said.

Smashburger has 351 stores, mostly in the United States. Jollibee, meanwhile, operates a total of 3,079 restaurant outlets in the Philippines.

-- with a report by Michelle Ong, ABS-CBN News

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Jollibee to build more stores in US, Canada

MANILA – Jollibee Foods Corp said Monday it planned to expand its stores in the US to 150 in 5 years and add 100 branches in Canada.

The country's largest fast food operator confirmed the expansions plans in a disclosure to the stock exchange. It was first reported on Bloomberg markets.

Jollibee aims to be among the world's top 5 quick service restaurant operators, according to the disclosure.

Jollibee had said it opened 192 stores in the first half of 2018, spending P8.3 billion in capital expenditures and acquisitions.

It also raised its stake in US burger chain Smashburger to 85 percent and announced plans for a Mexican food venture.

In October Filipinos lined up for Jollibee's first store in London, some of whom came from other parts of Europe. The company opened its first store in the continent, located in Milan, Italy, last May.

Jollibee marked its 1,000th store milestone in the Philippines in July 2017. It also has stores in Vietnam, Hong Kong, Saudi Arabia, Qatar and Brunei.

Last May, Jollibee said it would invest 45 million Singapore dollars (P1.74 billion) in a private equity fund that is set to acquire the master franchise of Tim Ho Wan in the Asia Pacific.

The Filipino company is also eyeing British sandwich chain Pret A Manger, Reuters reported in late 2017.

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Jollibee to open stores in UK, Macau, Manhattan and New York

MANILA - The Philippines' largest food operator Jollibee Food Corp. (JFC) on Wednesday said it would open its first stores in the United Kingdom, Manhattan (USA), and Macau (China) as part of its overseas expansion plans. 

The first Jollibee store in the UK will open on Oct. 20, the outlet in Macau will open on Sept. 28, while branches in Manhattan and in New York will open in a few months, JFC said in a statement. 

"JFC is bringing the company’s well-loved brand to Filipinos abroad to give them a taste of home," JFC said. 

Aside from serving Filipinos overseas, Jollibee said it has "seen success" in serving locals, especially in Vietnam and Brunei where most of their customers are locals. 

In Singapore, more than half of its customers are locals, JFC said. 

"JFC envisions to continue replicating its success in the Philippines, Vietnam, Brunei, Hong Kong and Singapore in other markets soon," it said. 

The company hopes to be among the world's top 5 largest restaurant companies in terms of market capitalization. To do that, JFC is focusing on the two largest economies, namely China and the US, while sustaining growth in the country. 

JFC recently announced its plans to build a "significant" Mexican food business in the US. It also recently raised its stake in Smashburger to 85 percent for $100 million.

The company in March also opened a Jollibee branch in Milan, Italy its first in Europe.

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Jollibee to buy 40 pct of US chain Smashburger

MANILA - Jollibee Foods Corp. (JFC), through its wholly owned subsidiary Bee Good! Inc., is acquiring 40 percent of US-based burger brand Smashburger.

JFC said it will spend $99 million for the 40 percent equity share of Smashburger, making the transaction its largest acquisition to date, and its largest investment outside the Philippines.

Smashburger, which has 339 restaurants worldwide, estimates system wide sales of approximately $339 million in 2015.

JFC said the purchase will be financed partly from its cash reserves and partly from a 10-year bank borrowing. The deal is expected to be completed within the year.

“This acquisition will make JFC’s presence in the US more significant, going beyond the Filipino market and serving mainstream consumers in the $100 billion US burger market, a food segment which is estimated to be almost three times larger than the pizza, sandwich or coffee segment in terms of sales. This acquisition will make the US one of JFC’s most important markets and drivers of long term growth along with the Philippines, China and the Filipino markets abroad,” JFC chairman Tony Tan Caktiong said in a disclosure to the stock exchange.

JFC currently owns and operates 87 restaurants in the US, 32 of which are Jollibee units, 33 Red Ribbon stores, 19 Chowking stores, and 3 Jinja outlets.

Its system wide sales in the US account for 5 percent of worldwide system wide sales.

In the Philippines, JFC is the largest food service network with a total of 2,834 outlets as of August 31, 2015.

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Jollibee eyes more US, China outlets

MANILA, Philippines - In line with its goal to become one of the top quick-service restaurants worldwide, fastfood giant Jollibee Foods Corp. (JFC) is focusing on the Philippines, China and the US as priority areas for expansion due to the strong consumer markets in these countries, company officials said.

The company is taking advantage of the expanding consumer market in the three countries to grow its brands, JFC chairman Tony Tan Caktiong told reporters after the company’s stockholders’ meeting in Pasig City last Friday.

“As we all know, China has the biggest population or consumer market. The US, although they are not number one in terms of number of consumers, its consumer market is still one of the biggest [in the world,” he said, while noting that the Philippines remains the most important market for Jollibee.

Currently, majority of revenues come from the Philippines, followed by China at 12 percent and the US at five percent.

Businesses in Vietnam add three percent to total revenues while the balance come from the Middle East and other locations.

Expansion in these priority growth areas will help the company achieve its target of ranking with top QSRs in the world, hopefully in seven years, JFC CFO Ysmael Baysa said in the same event.

“One is we will continue to grow organically our existing business. We want to grow even faster in the Philippines and China,” he said.

“In addition to that, we will continue to acquire more businesses, particularly in the US. And depending on the size of acquisition, the growth of international business and of the company can be very fast,” he added.

Jollibee has three brands in China – Hong Zhuang Yuan, San Pin Wang and Yonghe King.

In the US, Jollibee has imported its namesake brand, focusing more on the Filipino population, but is also on the lookout for a US QSR brand.

Tan Caktiong said they are looking at a brand already doing well and does not need a turnaround in business. Currently, JFC is talking with a number of brands but the official declined to divulge further details.

“In the US, the challenge is their brands are doing well and pricing is quite high. It will be a challenge to get the right brand with the right valuation,” he said.

“We are hoping we can do something in the next 12 months.

But while JFC has defined the three countries as priority areas, the fastfood giant is still excited to bring its several brands in other territories.

Tan Caktiong said the Southeast Asian region will remain in the company’s radar for expansion.

Read more on Philippine Star.

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Jollibee group to open 330 new stores

MANILA – Jollibee Foods Corp. (JFC) said it is investing P9.1 billion in capital expenditures in 2015, 68.5 percent higher than the P5.4 billion spending in 2014.

The firm said a bulk of the spending or about P6.7 billion will be allocated for its Philippine operations while P1.7 billion will be spent for China, and the balance for the US and Southeast Asia and the Middle East.

JFC said it plans to open 330 new stores worldwide, 220 of which are in the Philippines and the remaining 110 overseas.

“The 2015 capital expenditures will be mostly for the store openings and store renovations in the Philippines and foreign operations, and investments in commissary construction and capacity increase in the Philippines,” the company said on Monday.

JFC added that the investments will be financed by its cash reserves and cash expected to be generated from its operations this year.

The Jollibee Group opened a total of 234 new stores in 2014, of which 169 are in the Philippines and 65 are in foreign operation.

As of December 31, 2014, JFC operated 2,301 restaurants in the country under the brands Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal and Burger King.

The firm is also operating 612 stores overseas, more than 400 of which are in China.

JFC posted profits of P5.27 billion in 2014, 12.7 percent higher than the amount generated in 2013 on the back of increased system wide sales.

JFC said its system wide sales, which measure all sales to consumers both from company-owned and franchised stores, grew by 13.3 percent in 2014.

JFC’s Philippine business grew by 13.2 percent while its foreign business grew by 13.7 percent.

“The sales growth for the year was driven by an 8 percent same store sales growth for the Philippines and worldwide and a 5.4 growth in store network,” the firm said.

JFC’s chief financial officer Ysmael Baysa, meanwhile, said raw material cost increases in 2014 brought pressure on the firm's profit margins.

"We made important price adjustments and improved our store and manufacturing expenses during the year. We are now very close to fully covering these cost increases and look forward to the full recovery and improvement in gross profit margins in 2015 through lower cost of energy and more stable raw material prices. We will also offer even better products to our consumers to help ensure our products continue to provide them great value,” he said.

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