Following its US$350 million (S$480.6 million) acquisition of US coffee chain Coffee Bean & Tea Leaf (CBTL), Filipino fast food chain Jollibee Food Corps is now eyeing expansion in the United States, Canada, and China.
According to Jollibee executives, these expansion plans are “likely to include more mergers and acquisitions”.
In an interview with Reuters, Jollibee executives shared that they want to earn 30% of their revenue in the US in a decade’s time.
Jollibee also plans to lift revenue in China to 30% of overall sales, while the revenue from the Philippines falls to 30%.
Prior to the acquisition of CBTL, sales in the Philippines accounted for 73% of the firm’s revenue while the US represented 15% and China, 12%.
Last year, they also acquired Denver-based fast food restaurant Smashburger. As of 2018, the burger chain has 370 outlets located in 9 countries.
On the other hand, CBTL has 1,189 outlets across the United States, Southeast Asia, and the Middle East.
Jollibee’s Strategy – Acquire Small, Turn The Biz Around
The article on Reuters also points out an observation – that Jollibee “likes to acquire fairly small, loss-making firms at low prices and turn them around”.
Mr Erwin Elechicon, former chief of Jollibee’s international operations, reveals that while the firm receives business proposals “frequently”, acquisitions are typically made during chairman Tony Tan Caktiong’s food-tasting trips, as compared to being “sought out through bankers”.
Most of the acquisitions resulted from Tan Caktiong eating in a restaurant, liking the food and asking ‘who runs the place?’
Jollibee executives added that while they “tend to buy small”, they are also open to “any type of acquisition if the food is good”.
Apart from the highly-publicised CBTL acquisition, Jollibee has 16 brands and franchises to its name, including the franchises of Panda Express and Burger King in the Philippines.
It also owns three brands in China, including the Dunkin Donuts franchise.
Apart from its franchises and acquired brands, Jollibee also plans to expand its core fast food business in the US, aiming for 150 US stores and 100 in Canada over five years, up from 37 and four respectively.
Said Jollibee chief executive Ernesto Tanmantiong: “We want to spread our portfolio and risk. There’s huge opportunity out there.”
Jollibee is currently valued at US$4.8 billion (S$6.6 billion).