I Miss Good Ole Jollibee!
Cheers to my ever-jolly orange bumble bee! Amid the global slump, Jollibee as an enterprise has definitely proven that it can whether the economic storm. I guess when a business has more importantly become part of a culture, there is no way that it cannot stand even the most adverse of situations. Filipinos will never have second thoughts of shelling out their hard-earned money for a hearty, quality time with the family at their favorite fast food chain.
Jollibee Captures Top Spot in Philippines
How Fast-Food Chain Fought Back Against McDonald's and Plans to Expand Further Overseas; Strength During Global Downturn
In the Philippines, consumer-related companies rule the roost in good times and bad. This year, Jollibee Foods Corp. again wins the top spot in the Philippines' portion of the Asia 200 vote, thanks to the fast-food outfit's skill at extracting pesos from Filipinos' pockets.
Jollibee's consistently strong showing over the years, at or near the top of the most-admired list in the Philippines in the Asia 200 survey of subscribers of The Wall Street Journal Asia and other businesspeople, presents complications for the contest: There is a challenge to finding fresh ways to detail the company's success. Last year's story, for instance, focused on the company's innovations -- from dollops of pink salad dressing in the top-selling Yum! Burgers to around-the-clock hours to feed Filipinos working all night in the country's call-center industry.
An earlier story detailed the expansion of the chain, including the 500th Jollibee store, opened by founder and Chief Executive Tony Tan Caktiong on the island of Basilan, formerly the lair of the feared Abu Sayyaf group. Some U.S. military officers cite the restaurant as proof of success of their anti-terrorism mission there to help the Philippine army root out Islamist militants in the country's troubled south.
Jollibee's strong showing in this year's survey can be tied to the world's economic slump, which hasn't hit the Philippines as badly as some of its neighbors but still has a big effect. Filipinos are continuing to spend -- even if they are finding cheaper things to buy.
"Jollibee is a barometer for the Philippine economy," says Luz Lorenzo, an economist with ATR-Kim Eng Securities Inc. in Manila.
In taking first place for most admired, Jollibee moved up from No. 2 in the prior contest. The prior overall winner was Ayala Land Inc., a publicly traded real-estate-development unit of wide-ranging conglomerate Ayala Corp. Ayala Land dropped to No. 3 overall this year as its parent moved up to second place.
The Philippines' strongly consumer-oriented economy is proving much more resilient to the global slump than, say, Malaysia and Thailand, where exports make up about 70% of the economy. In the Philippines, exports contribute 30% of gross domestic product. That means the bulk of the Philippine economy is driven by consumer spending -- and a lot of its takes place in Jollibee's stores.
As a result, economists generally agree that, as Jollibee's sales expand -- they were up 18% in the fourth quarter compared with the year earlier -- the Philippine economy also will continue to grow this year while Thailand, Malaysia and Singapore face sharp contractions.
That said, people are reducing their spending. Of Philippines-based respondents to the Asia 200 survey, 17% said they will significantly reduce their spending this year, and 45% said they will spend somewhat less. About 30% said they won't change their spending patterns, while 7% said they will spend more.
That isn't necessarily bad news for Jollibee and some other consumer-focused business in the Philippines. Hans Sy, president of SM Prime Holdings Inc., the Philippines' largest shopping-mall operator, says Jollibee is benefiting as people trade down from more expensive restaurants to dine at Jollibee's chains of burger, pizza and Chinese eateries. Mr. Sy would know; Jollibee is one of SM Prime's biggest tenants.
Ordinary consumers say the same thing. "I used to go to Starbucks for coffee and maybe a pastry for breakfast," says Raymond Gomez, a clerical worker in Manila's financial district. "But now most days, I pop into Jollibee where I can eat breakfast for half the price or less."
Ms. Lorenzo, the economist at ATR-Kim Eng, goes as far as to say that last year's spike in inflation was a bigger problem for Jollibee's bottom line than the global slowdown, because the restaurant chain is less able to pass on higher raw-materials costs. Its fourth-quarter net profit of 661 million pesos ($14 million), on sales of 16.56 billion pesos, easily surpassed its income of 480 million pesos in the first quarter of 2008, when both Jollibee and the Philippines in general were struggling with significantly higher food prices than they are now.
The seeds of Jollibee's success in tapping the spending patterns of some 90 million Filipinos were laid in 1975, when Mr. Tan, then a chemical engineering student, opened an ice cream parlor in Manila. He happily scooped vanilla and chocolate ice-cream, but noticed that he got more customers when he began offering sandwiches, burgers and fried chicken to the lunch crowd. Jollibee -- a bumble bee dressed up in a chef's outfit, and a symbol of what Mr. Tan says is his ideal state of happy industriousness -- was born.
In the early 1980s, Mr. Tan ran into a big threat. McDonald's Corp. entered the Philippine market and threatened to sweep all before it. The U.S. company's stores were bigger and its marketing more sophisticated. Mr. Tan fought back with his own expansion plan, and started hiring local film and television stars for his marketing efforts. Also working in Jollibee's favor: the burgers themselves, prepared with a dash of soy sauce and pinches of salt and sugar, which satisfy many Filipino palates.
In addition to its signature, cheery yellow-and-red burger joints, Jollibee's other brands including Greenwich Pizza and Chow King, bringing the company's total number of restaurants in the Philippines as of February to 1,515, with another 289 overseas.
The company's draw is so powerful that Filipino politicians routinely buy Jollibee food to serve free at campaign events to attract prospective voters, typically adding a few percentage points onto the company's sales during election years (the next is 2010).
Recently, Jollibee has ventured overseas, launching stores in places such as Vietnam while buying up local food chains in China and applying Jollibee's logistical and marketing expertise to them. Ultimately, Mr. Tan wants to generate half the company's revenues outside the Philippines. Another potential growth area: Filipino-rich parts of the U.S.
Prospects there look good. Jollibee already operates several stores in California and Nevada. A Jollibee store that opened in Queens, New York, earlier this year "practically inspired riots of joy" among local Filipinos and Filipino-Americans when it first opened its doors, New York's Village Voice newspaper reported.
excerpt from a WSJ article
Jollibee Captures Top Spot in Philippines
How Fast-Food Chain Fought Back Against McDonald's and Plans to Expand Further Overseas; Strength During Global Downturn
In the Philippines, consumer-related companies rule the roost in good times and bad. This year, Jollibee Foods Corp. again wins the top spot in the Philippines' portion of the Asia 200 vote, thanks to the fast-food outfit's skill at extracting pesos from Filipinos' pockets.
Jollibee's consistently strong showing over the years, at or near the top of the most-admired list in the Philippines in the Asia 200 survey of subscribers of The Wall Street Journal Asia and other businesspeople, presents complications for the contest: There is a challenge to finding fresh ways to detail the company's success. Last year's story, for instance, focused on the company's innovations -- from dollops of pink salad dressing in the top-selling Yum! Burgers to around-the-clock hours to feed Filipinos working all night in the country's call-center industry.
An earlier story detailed the expansion of the chain, including the 500th Jollibee store, opened by founder and Chief Executive Tony Tan Caktiong on the island of Basilan, formerly the lair of the feared Abu Sayyaf group. Some U.S. military officers cite the restaurant as proof of success of their anti-terrorism mission there to help the Philippine army root out Islamist militants in the country's troubled south.
Jollibee's strong showing in this year's survey can be tied to the world's economic slump, which hasn't hit the Philippines as badly as some of its neighbors but still has a big effect. Filipinos are continuing to spend -- even if they are finding cheaper things to buy.
"Jollibee is a barometer for the Philippine economy," says Luz Lorenzo, an economist with ATR-Kim Eng Securities Inc. in Manila.
In taking first place for most admired, Jollibee moved up from No. 2 in the prior contest. The prior overall winner was Ayala Land Inc., a publicly traded real-estate-development unit of wide-ranging conglomerate Ayala Corp. Ayala Land dropped to No. 3 overall this year as its parent moved up to second place.
The Philippines' strongly consumer-oriented economy is proving much more resilient to the global slump than, say, Malaysia and Thailand, where exports make up about 70% of the economy. In the Philippines, exports contribute 30% of gross domestic product. That means the bulk of the Philippine economy is driven by consumer spending -- and a lot of its takes place in Jollibee's stores.
As a result, economists generally agree that, as Jollibee's sales expand -- they were up 18% in the fourth quarter compared with the year earlier -- the Philippine economy also will continue to grow this year while Thailand, Malaysia and Singapore face sharp contractions.
That said, people are reducing their spending. Of Philippines-based respondents to the Asia 200 survey, 17% said they will significantly reduce their spending this year, and 45% said they will spend somewhat less. About 30% said they won't change their spending patterns, while 7% said they will spend more.
That isn't necessarily bad news for Jollibee and some other consumer-focused business in the Philippines. Hans Sy, president of SM Prime Holdings Inc., the Philippines' largest shopping-mall operator, says Jollibee is benefiting as people trade down from more expensive restaurants to dine at Jollibee's chains of burger, pizza and Chinese eateries. Mr. Sy would know; Jollibee is one of SM Prime's biggest tenants.
Ordinary consumers say the same thing. "I used to go to Starbucks for coffee and maybe a pastry for breakfast," says Raymond Gomez, a clerical worker in Manila's financial district. "But now most days, I pop into Jollibee where I can eat breakfast for half the price or less."
Ms. Lorenzo, the economist at ATR-Kim Eng, goes as far as to say that last year's spike in inflation was a bigger problem for Jollibee's bottom line than the global slowdown, because the restaurant chain is less able to pass on higher raw-materials costs. Its fourth-quarter net profit of 661 million pesos ($14 million), on sales of 16.56 billion pesos, easily surpassed its income of 480 million pesos in the first quarter of 2008, when both Jollibee and the Philippines in general were struggling with significantly higher food prices than they are now.
The seeds of Jollibee's success in tapping the spending patterns of some 90 million Filipinos were laid in 1975, when Mr. Tan, then a chemical engineering student, opened an ice cream parlor in Manila. He happily scooped vanilla and chocolate ice-cream, but noticed that he got more customers when he began offering sandwiches, burgers and fried chicken to the lunch crowd. Jollibee -- a bumble bee dressed up in a chef's outfit, and a symbol of what Mr. Tan says is his ideal state of happy industriousness -- was born.
In the early 1980s, Mr. Tan ran into a big threat. McDonald's Corp. entered the Philippine market and threatened to sweep all before it. The U.S. company's stores were bigger and its marketing more sophisticated. Mr. Tan fought back with his own expansion plan, and started hiring local film and television stars for his marketing efforts. Also working in Jollibee's favor: the burgers themselves, prepared with a dash of soy sauce and pinches of salt and sugar, which satisfy many Filipino palates.
In addition to its signature, cheery yellow-and-red burger joints, Jollibee's other brands including Greenwich Pizza and Chow King, bringing the company's total number of restaurants in the Philippines as of February to 1,515, with another 289 overseas.
The company's draw is so powerful that Filipino politicians routinely buy Jollibee food to serve free at campaign events to attract prospective voters, typically adding a few percentage points onto the company's sales during election years (the next is 2010).
Recently, Jollibee has ventured overseas, launching stores in places such as Vietnam while buying up local food chains in China and applying Jollibee's logistical and marketing expertise to them. Ultimately, Mr. Tan wants to generate half the company's revenues outside the Philippines. Another potential growth area: Filipino-rich parts of the U.S.
Prospects there look good. Jollibee already operates several stores in California and Nevada. A Jollibee store that opened in Queens, New York, earlier this year "practically inspired riots of joy" among local Filipinos and Filipino-Americans when it first opened its doors, New York's Village Voice newspaper reported.
excerpt from a WSJ article
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