Amid slowing local growth, fast food giant Jollibee Foods Corporation (JFC) undertakes two key acquisitions to increase its presence in the Chinese market and diversify its local offerings.
To bolster its foothold in the mainland China market, Jollibee has recently entered a deal with Guangxi Zong Kai Food and Beverage Investment Co. Ltd. (GZK) for the eventual joint ownership of San Pin Wang, a chain of 34 restaurants selling low-priced beef noodles. A RMB 30 million ($4.39 million) investment gives JFC a 55% stake in the fast food chain, which has outlets in Nanning and Liuzhou, Guang Xi Zhuang Minority Autonomous Region in the People’s Republic of China. The joint venture is expected to be fully operational by January 2011.
The acquisition also provides another vehicle for the company’s growth in the fast-growing Chinese market, in addition to Yonghe King and Hong Zhuang, Chinese fast food brands that Jollibee already currently owns and operates.
In a separate report, JFC has recently acquired the master franchise for a Korean specialty coffee and Italian ice cream chain. Caffe Ti-Amo (which literally means “Coffee I Love You”) franchise, owned by Caffe Ti-Amo Korea Co. Ltd., was established in Korea in 2006 and currently operates 269 stores in the Republic of Korea.
The joint venture, which will have an initial capital of P10 million, would develop and build a business around gelato and coffee in the Philippines, with the first “Ti-Amo” store to open in The Annex at SM North Edsa.
Analysts said JFC’s entry into this new format was meant to diversify its brand offering and capture opportunities from a growing demand for gourmet coffee shops popularized by brands like Starbucks and The Coffee Bean and Tea Leaf. However, this new brand is seen offering a more affordable alternative to these foreign as well as homegrown cafe brands.