ONE BIG news hit the Philippine business world sometime last week. No, it was not about President Rodrigo Duterte’s veto of the proposed “Endo” law (that’s another story) although indirectly it may have some effect.
That business event was of a much bigger magnitude than the P3-billion acquisition by Jollibee Food Corp. of Iloilo-based fast-food chain Mang Inasal and it has international implications the ripples of which were felt particularly in the United States.
When news of that business event came out particularly on social media, Moi’s reaction was “Wow, that’s big!” – really big that it may change the way coffee habituates view the coffee shop they patronize. As I said, “may” because for all we know, after all the has smoke cleared, the “song remains the same.”
In terms of the business event being a game changer, I’d would like to compare it to another business event as such:
Excerpts from a Dec. 1, 2015 Philippine Daily Inquirer news story”
Listed liquor company Emperador Inc. owned by tycoon Andrew L. Tan, has acquired Fundador Pedro Domecq, Spain’s largest and oldest brandy, in an “all-cash” deal worth 275 million euros, or P13.8 billion.
The purchase solidifies Emperador’s position as the world’s largest brandy company and makes the Tan-led firm one of the largest foreign investors in Jerez, the brandy capital of Spain.
Of course, when the smoke cleared, Fundador brandy is still the same and the natives of these islands still drink it with ice (which never fails to raise the eyebrows of the brandy purists).
And a similar event last week rocked the world of, this time, the coffee habituates. So what was that particular business event?
Excerpts from the July 25, 2019 issue of The Philippines Star:
Jollibee buys Coffee Bean and Tea Leaf for $350 M
Jollibee Foods Corp. has gobbled up The Coffee Bean & Tea Leaf, a California-based coffee and tea shop giant, marking JFC’s biggest acquisition so far and moving the company a step closer to its goal of becoming one of the top five largest restaurant companies in the world.
The acquisition would also enable JFC to become a major player in the fast-growing and lucrative coffee business.
JFC will acquire CBTL for $350 million with an initial investment of $100 million. Through its wholly owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL, Singapore), JFC entered into an agreement to invest $100 million in a new Singapore-based holding company to acquire 100 percent of CBTL.
The acquisition of CBTL will be JFC’s largest and most multinational so far with business presence in 27 countries, said JFC chairman Tony Tan Caktiong.
“This will bring JFC closer to its vision to be one of the top five restaurant companies in the world in terms of market capitalization,” he said.
CBTL will be JFC’s second largest business, next to the Jollibee brand and the coffee business will account for 14 percent of JFC’s worldwide system sales.
The acquiring entity will be JWPL’s wholly owned subsidiary Java Ventures LLC, which will eventually be a wholly owned subsidiary of the new Singapore-based holding company.
CBTL is owned by International Coffee & Tea, LLC based in Los Angeles, California, whose current owners are Advent Coffee Holdings Corp., Alexandria II Corp., CBTL Holdings, The Sassoon Group LLC and ICT Incentive Holdings.
CBTL has 1,189 outlets around the globe as of the end of last year, of which 336 are company owned and 853 are franchised. It has 284 branches in the US, 447 in Southeast Asia (Philippines 139, Indonesia 101, Malaysia 99, Singapore 61), 336 in other Asian countries (South Korea 292), and 122 in other regions (Kuwait 36, Qatar 28, India 27).
JFC’s $100 million investment will represent 80 percent of the equity of the holding company with the balance of $250 million as advances to the new firm.
So, with this acquisition will that also mean a merger of the menus of Jollibee and Coffee Bean and Tea Leaf?
Bear in mind that Jollibee is a fast food restaurant and caters to the hoi polloi, meaning the lower middle class. Coffee Bean and Tea Leaf, on the other hand, markets itself as an upscale coffee shop and caters to the trendy social climbing millennials.
Are we going to see peach-mango pie with café latte or chicken joy with ice-blended mocha?
God forbid! Hopefully no.
With all that much money in the tune of hundreds of millions, why can’t Jollibee regularize most of its employees?/PN