The Philippines’ Jollibee Foods Corp. acquired 100 percent of US Coffee Bean and Tea Leaf specialty coffee and tea brand on Wednesday for $350 million. Coffee Bean and Tea Leaf are only one among JFC’s recent brand purchases—aiming to increase global presence.
Its subsidiary, Jollibee Worldwide Pte Ltd, agreed with a Singapore-based holding company who will handle the purchase.
According to the company’s disclosure to the Philippine Stock Exchange, the company will be investing $100 million that serves as a downpayment and will complete acquisition with a total of $350 million.
“This will add 14% to [Jollibee’s] global system-wide sales, 26% to its total store network, will bring international business’ contribution to 36% of worldwide sales, and will bring [Jollibee] closer to its vision to be one of the top 5 restaurant companies in the world in terms of market capitalization,” Jollibee chairman Tony Tan Caktiong said in a statement.
Jollibee Foods Corporation is the largest fast-food operator in the Philippines with a plethora of restaurants under its umbrella, including 3,000 branches of Jollibee, Greenwich, Chowking, Red Ribbon, Mang Inasal, and Burger King.
Furthermore, it currently stands as the 24th largest fast-food chain globally (including coffee chains) by the number of branches, and fifth among companies not from the United States. It claims to be the largest Asian restaurant company in the world.
Globally, McDonald’s is the world’s largest fast-food chain, followed by KFC, Subway, Pizza Hut, and Starbucks. In the Philippines, however, the brand beats all of those brands with a bigger share of the Philippine market than its two biggest competitors combined.
There has been a long-standing joke that “McDonald’s is number one everywhere in the world except the Philippines” since it cannot beat the happy bee.
Now, JFC is taking the challenge at a much global scale, as it is taking steps into expanding the company to other countries, not just in its region but also to Western countries such as London and even going head-on by establishing itself in the United States.
The company aims to take a spot in the world’s top 5 largest fast-food corporations.
In the first nine months of 2018, Jollibee opened 302 stores, 125 of which are overseas. Meanwhile, the company’s shares have climbed steadily since late September, with a one-year return of 22.2 percent as of January. Net income in the same period rose 26 percent to $104 million.
Furthermore, the company is also exploring markets in other countries, whereas the Philippine Statistics Authority reported in 2016 that about 2.2 million Filipinos are working overseas.
Targeting millions of overseas Filipino workers, Jollibee outlets flocked the streets of Manhattan and London to soothe homesickness and grab a bite of its popular fried chicken and uniquely sweet spaghetti.
The company has also been particular in adjusting its brand to local taste and preference. Thus, it is rapidly acquiring other businesses in the process.
The level of localization, both in the company’s operations and its menu, varies from country to country. “When we enter a market, we bring the products we’re famous for – the chicken, the spaghetti, the burger,” Dennis Flores, president and head of international business, EMEAA, for parent company Jollibee Foods tells an outlet.
“Over time, we bring in local products: in Vietnam we have chili chicken, and in Brunei nasi lemak.”
But JFC is envisioning more than its local region of Southeast Asia. It has recently done the same in the US, buying 40 percent of local chain Smashburger in 2015 and fully acquiring it last year. This purchase allowed its control over popular chains like Shake Shack.
“The acquisition of The Coffee Bean and Tea Leaf will be JFC’s largest and most multinational so far with business presence in 27 countries,” founder Tan said.
Notably, Jollibee is no stranger to the coffee business, as it has popular Vietnam-based Highlands Coffee in its portfolio. According to the company, purchasing Coffee Bean would allow it’s coffee business to become the second-largest business after its chain of restaurant ventures, accounting to 14% of its worldwide sales.
“Our priority is to accelerate the growth of The Coffee Bean and Tea Leaf brand particularly in Asia, by strengthening its brand development, marketing, and franchisee support system,” Tan said.
Last year, Jollibee took a 47-percent stake in Mexican chain Tortas Frontera, which serves pulled pork, chorizo, and beef sandwiches with sides of guacamole and cilantro salsa.
Earlier in 2018, Jollibee invested roughly $75 million to acquire the Asia Pacific master franchise holder of Tim Ho Wan. In April of the same year, Jollibee announced its investment in SuperFoods Group to bring the Vietnamese noodle soup chain PHO24 to the country.
In September 2018, Jollibee announced its 50-50 joint venture with the owners of Panda Express to bring the brand and its signature orange chicken to the Philippines.