How Jollibee Has Grown Into One of the World’s Most-Beloved Restaurant Brands By Kostuch Media Ltd. - March 4, 20190
Canada’s Prime Minister, Justin Trudeau, caused a frenzy when he visited a Jollibee location in Manila in 2017. Then, when the popular fried-chicken chain opened its first Ontario location in Scarborough early last year, former Premier Kathleen Wynn paid a visit and declared it “delicious.” But Jollibee doesn’t require any political endorsements. Every year, millions of devoted customers around the world vote with their stomachs for its Chickenjoy fried chicken, Jolly Spaghetti (noodles topped with Jollibee’s spaghetti sauce, hotdog slices and grated cheese), Palabok Fiesta (noodles with pork crackling, smoked-fish flakes, sautéed pork, shrimp and sliced boiled egg) and Peach Mango Pie. Even the late Anthony Bourdain was among Jollibee’s devotees. Visiting a Jollibee location for a 2016 segment of his CNN show Parts Unknown, Bourdain described it as “the wackiest, jolliest place on Earth” before tucking into a lunch of Chickenjoy and Jolly Spaghetti (which he described as “deranged, but strangely alluring”). From humble beginnings as a small ice-cream parlour in Manila, Jollibee has grown into one of the world’s most-beloved restaurant brands. Whenever it opens a new location — something it’s been doing with increasing frequency in recent years — people have been known to stand in line for up to seven hours. The Filipino-restaurant chain first entered North America with a location in Daly City, Calif. in 1998 and has since established a presence across 11 U.S. states. It finally turned its attention to Canada in 2016, opening its first location in Winnipeg. The company has since grown to four Canadian locations (two in Winnipeg, one in Scarborough, Ont. and another in Mississauga, Ont. — which served nearly 7,000 customers on opening day, including one person who made the five-hour trek from Montreal). However, it’s merely the first wave of an ambitious expansion plan that will see Jollibee open an estimated 100 Canadian locations within the next five years. If consumer demand is any indication, there are numerous viable options for expansion. Jollibee Canada’s 45,000 Facebook followers routinely implore it to open stores in markets such as Calgary, Edmonton, Red Deer, Vancouver, Montreal and Saskatoon. The company has said Canada will play a “key role” in its North-American expansion plans, noting it’s exploring several western-Canadian markets, as well as additional locations in Toronto, which is home to the country’s largest Filipino community. “As the most populous metropolitan area in Canada, we knew we had to be in Toronto,” says Maribeth dela Cruz, vice-president and general manager for Jollibee Foods North America. The Canadian rollout is part of a broader global-growth plan by its parent company, Jollibee Foods Corporation (JFC), which has been aggressively opening new stores and acquiring chains — among them the Colorado-based Smashburger — as part of its stated objective of becoming one of the world’s top-five restaurant companies. “Since the start of JFC 40 years ago, I have always dreamed it to be the largest food company in the world,” said founder Tony Tan Caktiong — the 2004 recipient of Ernst & Young’s World Entrepreneur of the Year award — in a statement last year. In 2018, the U.K. brand-valuation consultancy Brand Finance listed Jollibee as the 15th most-valuable restaurant brand in the world, with its brand value increasing eight per cent to US$1.5 billion. Brand-Finance analyst Chen Lin Ton says Jollibee’s ranking was bolstered by its performance in three key areas: “A strong financial performance” on both current and five-year forecasted revenues; an increase in brand strength (which moved up one point to 62 out of 100); and increases in both social-media performance (69 out of 100, up from 63 in the previous year) and website-traffic performance (which rose to 87 out of 100, up from 62 the previous year). Jollibee was the only Asian chain on the Brand-Finance list — which was dominated by U.S. giants such as Starbucks (which topped the list with a brand value of US$32.4 billion) and McDonald’s (in second place with US$24.9 billion) — sliding in behind Taco Bell and ahead of the Olive Garden. “Jollibee is a fast-food brand rising through the ranks with its diverse menu of U.S. and Asian-inspired dishes that sets it apart from other fast-food brands,” says Ton. “With its devoted following in the Philippines and international expansion, it could well become the next KFC. The brand’s visionary, CEO Ernesto Tanmantiong, is to be credited with steering the chain towards achieving global brand status.” Systemwide sales for JFC were up 24.2 per cent in the first three quarters of 2018. While the company doesn’t break out U.S. and Canadian sales, it said North-American sales grew 218 per cent in the third quarter of 2018 (30 per cent without the additive effect of its Smashburger acquisition). The company opened a total of 302 new stores in the first nine months of 2018, operating 4,353 stores worldwide as of Sept. 30, 2018. Jollibee also benefits from the seemingly insatiable consumer appetite for chicken. According to the 2017 edition of Euromonitor’s Consumer Foodservice report, chicken was the best-performing fast-food item in 2016, growing eight per cent to US$65.6 billion in global sales. Euromonitor analyst Stephen Dutton says much of its success stems from its ubiquity (“unlike more regional-specific items such as pizza or burgers, chicken can be found on menus in all world markets,” he wrote) and its adaptability. “The fried-chicken market…is quite huge, so this is just the first leg of our journey to be one of the major players in the fried-chicken market,” said Tanmantiong when asked about the company’s growing American and Canadian footprint last year. But, while Jollibee is beloved by ex-pat Filipinos, ultimately, its growth will be contingent on achieving crossover success with mainstream consumers. Tanmantiong says Jollibee’s North-American strategy is to enter markets boasting a Filipino population before crossing over to the mainstream. “We have seen more mainstream [customers] visiting our stores,” he says, noting half of the customers at the November opening of its first New-York location were non-Filipino. Jollibee hasn’t publicly disclosed which Canadian markets it will enter, but its recent arrival coincides with a surge in the country’s Filipino population. While Filipino immigration to Canada didn’t begin in earnest until the 1970s, it’s been trending upwards ever since, particularly in recent years. Today, there are approximately 837,000 Filipinos in Canada, according to the most recent census data, and they’re among the country’s fastest-growing ethnic groups — accounting for 15.6 per cent of the country’s 1.2 million new immigrants between 2011 and 2016. Ontario is currently home to the greatest number of Filipinos (more than 337,000), followed by Alberta (175,000) and British Columnbia (158,000). Jollibee’s future success might also rest with millennials. “This group is not afraid to try different cuisines and flavours, as most are educated and have good knowledge of food and its culture, which encourages foodservice players to offer different ethnic-food menus in their outlets,” says a report by Toronto-based NPD Group. In another report, Euromonitor says Jollibee’s success stems from its mastery of addressing customer tastes that have been largely untapped by the global fast-food giants, through a steady stream of “complementary acquisitions.” But perhaps the greatest indicator of Jollibee’s arrival on the global stage came from China earlier this year, when a Filipino couple stumbled across a copycat restaurant called JoyRulBee, sporting both the same red-and-yellow colour scheme, a likeness of Jollibee’s namesake bee mascot and a similar menu. It joins a long list of global companies that have fallen victim to China’s so-called “shan zhai” — businesses that manufacture and sell fake goods — imitating popular brands, including Starbucks, Hyatt and Apple. Jollibee promptly announced it was taking legal action against the company. Even jolliness, it seems, has its limits. Written by Chris Powell