What s up guys! It s Jason here and welcome to my YouTube channel, Food Insight. If you
asked most people what they knew about Filipino cuisine, you would probably either get a blank
stare, mentions of Balut, an already developed egg embryo that is boiled, eaten from the
shell, and looks graphically like a small chick, or of Jollibee, a Filipino fast food
chain that is worldwide and sells mostly American fast food. Jollibee Food Corporation has 1,300
chains worldwide and 37 in the United States; it s not a small feat considering that given
its menu offers burgers, fried chicken, and spaghetti, it s competing with the likes of
McDonald s, Shake Shack, KFC, and countless others. The story of how Jollibee developed
from two ice cream shops in Manila to a multinational corporation is a testament to the importance
of recognizing opportunities and being flexible as an entrepreneur. Today we ll talk about
what is Jollibee, how Jollibee started from very humble beginnings and why Jollibee is
so popular and always so crowded. By the end of this video, you ll be a Jollibee expert
and might be craving some Balut!
But before we begin drum roll please If you wouldn t mind just tapping that LIKE button
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like this gets, the more likely the YouTube algorithm is to push it out to more people
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doing that and now let us continue on with what is going on with White Claw.
A Humble Beginning
The founder of Jollibee, Tony Tan Caktiong, is actually a chemical engineer by training,
who decided to go the entrepreneurial route in 1975 after touring Filipino dairy and ice
cream brand, Magnolia s factory. He took action by becoming a franchisee of Magnolia Dairy
s ice cream products and subsequently opened two separate ice cream stands that he ran
with the help of his family: Quiapo Ice Cream House and Cubao Ice Cream House. He was 22-years-old,
a recent college graduate. All of this didn t seem out-of-the way and was made possible
by the financial prosperity of his entrepreneurial family of Chinese immigrants to the Philippines,
who gained success after his father opened a restaurant. Like many better-off entrepreneurs,
he started his business with his family s savings of about 350,000 pesos
Interestingly, while ice cream might seem like a surefire winner in the Philippines
because of the tropical climate, many customers who came to both ice cream houses wanted hot
meals. Caktiong capitalized on that demand and in 1978, after having hamburgers and other
hot foods outsell ice cream products year after year, he converted his former Magnolia
ice cream parlors into fast food shops.
After much soul searching for a catchy name and logo, Caktiong and his family settled
on a smiling red bee, with the bee being a symbol of hard work and its byproduct, honey,
being the literal fruit of its hard work. In case you thought Jollibee meant something
in Tagalog, in fact it doesn t. It s a mixmash of Jolly because the family wanted to be associated
with happy times and bee. Jollibee was officially born and the family had so much confidence
in the brand that they invested in registering their logo officially in the Philippines to
start with, as well as incorporating the eponymous managing company, Jollibee Foods Corporation.
The logo would soon become synonymous with family values and excellent hospitality in
the Philippines and to overseas Fillipinos. It also became synonymous with the ultimate
Filipino success story.
With the often-touted competitiveness of the restaurant industry, it seems shocking that
by the end of 1978, the same year that the family began to sell hot food only, there
were seven branches in Manila. Just a year after, the family decided to franchise the
first outlet of Jollibee in another part of Manila. Tokiang described his mission at the
time as very day-to-day, to serve great tasting food at affordable prices. At the same time,
Tokiang always had the dream of growing bigger and bigger within the Philippines and eventually
overseas, by focusing on taste, quality, service, and price on a daily basis.
Fighting off McDonald s
By 1981, McDonald s opened its first branch in the Philippines, ironically by another
Chinese-Filipino businessman named George Yang. McDonald s opened up to much fanfare
and served mostly American fare of hamburgers and fries. Despite Jollibee s strong track
record---in 1981 it had two dozen franchises throughout the Philippines, Tokiang was advised
by well-meaning friends to shy away from the competition -- do (like) other businesses
and to not try confronting the global giant. In true Rocky-fashion, Tokiang showed the
fighting spirit that explains Jollibee s success: he did his homework and formed a game plan.
Tokiang even flew to the United States to do his own first-hand research. When Tokiang
and his team finally deliberated on the strengths and weaknesses of their own business and that
of McDonald s, they came to the stark realization that because McDonald s had much deeper pockets,
they were able to absorb more losses and support streamlined logistics. Still, Jollibee focused
on its own unique and somewhat innate advantages: being a Filipino success story and understanding
Filipino taste buds because they were founded and developed in the Philippines. Just as
importantly, Jollibee played up to some of the ingredients that made McDonalds what it
is, such as a colorful and memorable mascot, a cheerful and welcoming attitude from the
staff, and very low prices without compromising quality.
It worked because the same year that McDonald s arrived in the Philippines, Jollibee made
the top 1,000 corporations in the country. By 1984, it moved up higher, into the top
500 corporations in the country and it dominated market-share by diversifying its offerings,
so that in addition to its hamburgers, there was also spaghetti, french fries, fried chicken
known as Chickenjoy, a Yumburger, and Palabok or rice noodles with meat or seafood and egg.
Jollibee doubled-down on its advertising as well, launching extensive TV ad campaigns
that focused on the entire family enjoying quality time and food at the chain. It s probably
no surprise then that by 1986, it opened its first overseas store in Taiwan. 1987 was another
interesting year because Jollibee continued to make inroads overseas as they opened a
location in Brunei and moved into the top 100 corporations in the Philippines with 570
million pesos in sales.
Continued Expansion & Filipino Diaspora
Jollibee continued its expansion in the Philippines, the rest of Asia, Middle East, and North America
gradually. It is fueled partially by the capital it raised by listing publicly on the Philippine
Stock Exchange in 1993. That capital injection also helped it diversify its business in the
Philippines, turning it into a food empire with the acquisitions of Greenwich Pizza Corp.
in 1994, Chinese fast food chains Chowking Oriental in 2000 and Yonghe King in 2004,
as well as Hong Zhuang Yuan, a Beijing-based congee chain, in 2008. Additional domestic
acquisitions include the pastry and cake chain, Red Ribbon in 2005 and barbecue fast food
chain, Mang Inasal, in 2016. Jollibee Food Corporation also bought the firm that operates
Burger King in the Philippines, essentially owning a competitor in the market, as well
as leveraging their subsidiary company, Fresh N Famous, through which they operate Chowking
Oriental, to introduce Pho 24, a fast casual noodle house that already had a substantial
presence in Vietnam . Since announcing the introduction of Pho 24 in 2018, Jollibee has
expanded the brand rapidly with one store in the Philippines and 34 outside of the country.
Their acquisitions don t stop in Asia either. In 2018, Jollibee acquired Colorado-based
Smashburger, famous for its slightly more higher-end, 100% certified Angus beef patties
and 345 stores total in the United States. That same year, Jollibee also bought 47% of
fast casual Mexican chain, Tortas Frontera for $12.4 million. In 2019, Jollibee made
clear that it was here to stay in the USA as it acquired coffee chain, Coffee Bean & Tea
Leaf, for about $350 million. It s very similar to its 50% acquisition of Highlands Coffee
and Hard Rock Coffee, headquartered in Vietnam. With significant acquisitions in the United
States and Asia, it s clear that Jollibee wants to be an Amazon of sorts for the fast
casual food world: if you re enjoying coffee, burgers, spaghetti, or guacamole, you should
be enjoying it from Jollibee. Given their presence in Hong Kong, China, Indonesia, Saudia
Arabia, the UAE, and Vietnam, for instance, it shouldn t be that difficult for consumers
to unwittingly patronize a Jollibee-owned franchise.
Jollibee s expansion strategy and its success, has relied partially on the pronounced Filipino
diaspora worldwide with the United States, Saudia Arabia, Canada, UAE, Malaysia, Japan,
and Australia having the most significant migrant populations. It s been estimated that
about 10% of the Philippines total population of 108 million actually works overseas to
send remittances back home. It isn t a coincidence that Jollibee often open in locations that
have a large Filipino presence and require little marketing because they have such strong
brand recognition among Filipinos anywhere. For instance, Jollibee opened its namesake,
as well as Chow King and Red Ribbon stores in the US, UAE, Qatar, and Saudia Arabia to
capitalize on that longing for a taste of home among the Filipino expat community. When
Jollibee opened in Jersey City, where there s a small Manila Street, it ended up drawing
lines around the block for a few days in June 2012. Community pride in having a Filipino
grown chain go global is an indisputable factor in its success as well. A domestic helper
in Hong Kong who frequents Jollibee there confirmed as much by explaining, Jollibee
can do what other food chains can do, franchise to other countries. It means that Filipinos
can make their name [around the world]. This is the goal of Jollibee s founder to this
day.
Strategy & Plans for the Future
Very energetic at 68-years-old, Caktiong is no longer CEO of Jollibee. His brother, Ernesto
Tanmantiong now serves as its CEO, President, and Director, after having been on Jollibee
s Board of Directors since 1987. Yet, Caktiong s vision for the company still holds sway
over its current strategy. The family is united in its goal of having Jollibee become one
of the world s top five restaurants in terms of market value. More precisely, the Jollibee
C-level team wants a 50-50 split from domestic and overseas sales. One of the main challenges
in achieving that goal has been the fast growth within the Philippines. For the overseas market
to grow to Filipino proportions, it has to excel rapidly and that s one of the reasons
behind buying local chains in countries like Vietnam and China, that have fewer Filipino
workers compared to Hong Kong and Qatar. Jollibee acquired local chains in both countries because
it s much easier to grow food chains that serve fare already known to its local audience;
in Vietnam its pho with Pho 24 and its congee from Hong Zhuang Yuan in China. It s the path
of less resistance compared to only opening Jollibee chains overseas and spending on marketing
to spotlight its fusion Filipino and American cuisine. After all, people typically default
to what they already know and like.
For its own future, Jollibee also intends to keep playing to one of its historical strengths:
playing to the local market by ramping up its food research and development. With a
now global empire and very stiff competition in each market, Jollibee s management has
to make decisions about where to source ingredients to ensure consistent quality, as well as adjusting
the taste of core Jollibee offerings, such as their sweet spaghetti for instance, to
the local taste.
And that brings us to today. The forced shutdowns worldwide throughout much of 2020 put a dent
in Jollibee s ability to break-even with their American acquisitions, with both Smashburger
and Coffee Beans & Tea Leaves continue to lose money and since January 2019, brought
Jollibee s profit margins to its lowest in 18 years. Jollibee had to close 486 stores
due to COVID-19. The mixed results, mostly due to COVID-19, led the chain to invest almost
351 million to revamp its online point of sales and delivery platforms, as well as partnering
with DoorDash. With the possibility that cooking more often at home becomes a way of life,
Jollibee aims to be more strategic with its post-COVID 19 strategy. The company s focus
is on markets that are already recovering quickly from the pandemic, regardless of whether
they already have a location in those cities, both in the US and Canada. A prime example
is San Francisco, where Jollibee didn t have a location for about ten years, but is now
set to open a location on Market Street in the heavily Asian city. The company also intends
to continue doing outreach and partnerships with communities that appeal to a diverse
demographic, such as when Jollibee opened its Times Square location and also partnered
with the Madison Square Boys & Girls Club. It doesn t intend to rest on its laurels,
nor its built-in loyal Filipino following. It wants to take the world by storm, one Chickenjoy
bucket and one Yumburger at a time. Let s see what the year ahead brings for Jollibee!
So with that said, thank you so much for watching my video. There was a significant amount of
research, production and food eating that went into making this video possible. As this
is a brand-new YouTube channel I just started this year - if you enjoy videos like this,
please click the subscribe button and hit that notification bell! I respond to all comments!
If you haven t seen already, check out my Hamburger War YouTube Series covering topics
like How Shake Shack is Taking over the World or the In-N-Out Overnight Success Story. As
always, stay happy and healthy and stay tuned for another episode of Company Insight next
week.