FAST FOOD AND SNACKS IN THE PHILIPPINES
Local Filipino restaurants serve a variety of stew-like dishes, which are usually displayed so that you can choose the ones you want by simply pointing at them. Many restaurants in the Philippines are run by Chinese. They offer Chinese food as well as Filipino food. Kinds of restaurants include: 1) first class restaurants with world-class chefs, often in hotels; 2) world family-style dining places; 3) simple grilleries; 4) “carinderias”; 5) cafeterias; and 6) food court stalls. 7) At dressed-down dampas, you can order fresh crustaceans by the kilo, straight from the market stalls, and then place your order with the restaurant kitchen. “Halal’ and kosher food are available. There are also organic markets to eat-all-you-can buffets.
Hygiene-wise and selection-wise the best places to eat are the restaurants at upscale hotels and good restaurants frequented by tourists or rich Filipinos. Manila and the other large cities have restaurants serving American-style fast food, pizza, Italian food, Indian food, Japanese food, Korean food, Chinese food and other kinds of international cuisine. Resorts along the ocean are famous for fish, prawns and other kinds of seafood. Off the beaten path the choice is usually more limited: usually one-room restaurants with a variety of stews. In tourist towns and beach areas, you can find backpacker restaurants serving thing live pizza, sandwiches, omelettes, muesili, pancakes and fried rice.
Filipino Restaurant Etiquette
In most places Filipinos eat with a fork and spoon. In some places people eat with their hands. On the tables of traditional Filipino restaurants are water containers or a small sink that patrons use to wash their hands before they eat. Some restaurants filled with cigarette smoke. At crowded, busy restaurants, sharing tables with strangers is common. Restaurants generally serve water or tea for free. Sometimes no napkins are available. When dining with Filipinos do not begin to eat or drink until the oldest man at the table has been served and has begun. It is appropriate to thank the host at the end of the meal for the fine food.
In informal restaurants, you may be required to share a table. If so, do not force conversation: act as if you are seated at a private table. Waitstaff may be summoned by making eye contact; waving or calling their names is very impolite. The business breakfast is unknown in the Philippines. The business lunch is very popular, as is the business dinner. Both may be good times to discuss business, but let your Philippine associates take the lead on this: if they bring up business, then it's okay to discuss it. [Source: Mike Lininger etiquettescholar.com *]
Usually the one who does the inviting pays the bill, although the guest is expected to make an effort to pay. Sometimes other circumstances determine the payee (such as rank). Making payment arrangements ahead of time so that no exchange occurs at the table is a very classy way to host, and is very common. When men are at the table, women will not really be able to pay the bill at a restaurant: if you want to, make arrangements ahead of time, and don't wait for the check to arrive at the table. The only time it is considered appropriate for a woman to pay the bill is if she is a businesswoman from abroad. *
Fast Food in the Philippines
Fast food has become part of the culture, with national and international chains in many towns. All meals at fast-food restaurant include rice, although French fries also tend to be on the menu. Banana ketchup is preferred, although the international chains serve tomato ketchup. [Source: everyculture.com /=/]
A survey by A.C, Nielsen found that 54 percent of Filipino interviewed eat at a fast food restaurant at least once a week, compared to 35 percent in the United States. McDonald’s, Kentucky Fried Chicken and Pizza Hut all operate in the Philippines but they only have a small share of the Philippines fast food market. They receive stiff competition from local favorites: Chow King, the top Chinese food chain, Greenwich, the leading pizza and pasta chain, and Jollibbes.
The Philippines fast food industry is dominated by Jolibees, a Philippine-owned company that controls 46 percent of the quick service restaurant market and 80 percent of the burger-based meals market. The Jollibee Company owns Chow King and Greenwich. As of 2001 the company had 722 restaurants and planned to open 175 more in 2002. It also runs restaurants in California, Hong Kong and Dubai, places where there are large Filipino communities. As of 2013, it boasted 2,581 Jollibees and other fast-food restaurants under various brands.
Jollibee’s is the Philippines main nationwide fast food chain. Launched with just two outlets in the mid 1970s, it had grown into a 365-unit chain by the mid 1990s. It is as popular on the lesser islands of the Philippines as it is in Manila, where it is estimated that the average Manileno eats at least twice a week at a Jollibees. The mascot for Jollibees is a jolly bee.
Sunshine Lichauco de Leon wrote in Forbes: “Jollibee’s red-and-white bumblebee logo is a familiar sight in the Philippines, where there are now 2,040 outlets after roughly 120 were added in past three years. It controls 18 percent of the Metro Manila market, compared with 10 percent for McDonald’s, according to a report on last year’s third quarter compiled for internal use. ” [Source: Sunshine Lichauco de Leon, Forbes, February 11, 2013]
Jollibee’s outlets are especially crowded at lunch time, when every seat s taken and there are long lines in front of all six cashiers. Customers are often forced to sit on the ground or on the steps outside. In Manila you can find boarded up McDonald’s that dared to go head to head against Jollibees.
Jollibee’s success lies in its ability to set up nationwide supply lines and offer things that Filipinos like at cheap prices. It offers longganisa pork sausage and fried rice for breakfast, Aloha burgers, topped with pineapple and bacon and meals with fried chicken and spaghetti for lunch and dinner along with palabok (tofu served on rice noodles with an aromatic sauce spiced with dried fish flakes and spring onions) and “chicheron” (dried, ground pork skin). In the 1990s a typical customer paid 35 pesos for breakfast, 65 pesos for lunch and 55 to 65 pesos for dinner.
In 2013, analysts expected Jollibee to earn $102 million, or 22 percent more than in 2012, and for revenue figures to reach $2 billion, double the 2009 sales. Meantime, the stock jumped 11 percent in 2012.
Tony Tan Caktiong: Jollibee’s Billionaire Owner
Sunshine Lichauco de Leon wrote in Forbes: “When Tony Tan Caktiong looks back at his childhood, he remembers tasting things. His father, a chef in a Buddhist monastery in Manila, would return home to cook for his family, making delicious meals from whatever simple ingredients he could find. “My mother would say I was the most difficult to bring up because I was the choosiest in terms of taste, whereas my brothers would just eat anything,” recalls the third of seven children. “She would say, ‘You are the hardest to satisfy.’ ” [Source: Sunshine Lichauco de Leon, Forbes, February 11, 2013 ]
"I never thought I would be in the food business," says Tan. Starting with two Manila ice cream parlors in 1978, Tan has built his Jollibee Foods into one of Asia’s largest home-grown restaurant companies. Today what he calls Jollibee’s “flavorful environment” and his Buddhist penchant for simplicity are on full display at outlets from Saudi Arabia to the borough of Queens in New York City. “We keep things simple and fill a simple need: very tasty food at a reasonable price. To this day I repeat to my people what my father told me–you have to make sure your food tastes really good.”
The ubiquity of Jollibee’s has made Tan a billionaire–worth roughly $1.3 billion by FORBES ASIA’s latest estimate. Not bad for a restaurant owner whose wife, Grace, says has never really learned to cook. If Tan looks forward with a step-by-step sure-footedness, it’s perhaps because of his Buddhist background–not just the afternoons spent playing with monks in the monastery where his father worked but also the Buddhist grade schools he attended on scholarships. “I think our destiny is already defined, but you still have to do your best or else that might change,” he explains. “We do our best and let God just handle the rest.”
Tan has been following his instincts since he stumbled into the food business while still in college at the University of Santo Tomas in Manila. He was earning a degree in chemical engineering. “I never thought I would be in the food business,” he says. “I liked numbers so I thought I would be an engineer.” But as part of his course work he toured a Magnolia Ice Cream plant with one of his chemical engineering classmates, his soon-to-be wife, and learned of a franchise opportunity. Intrigued, he and Grace decided to open two ice cream shops shortly after graduation. When he noticed that customers were craving sandwiches and saw the growing popularity of hamburgers around the world, he decided to relaunch his business as a hamburger house.
“Each had an entrepreneurial streak, so the switch from engineering to running restaurants wasn’t that far-fetched. Grace’s father was a businessman and helped them get started. And Tan’s father had started a small Chinese restaurant after leaving the Buddhist monastery and moving his family to Davao in the south; Tan worked there as a teenager after school. “It was nothing special for ambiance, but it became known for the tastiness of its food,” he recalls. Today the eldest of his three children, Carl Brian , 32, is the company’s business development director and focuses on the 12 Sabu venture with Wowprime in Shanghai. Tan also has two daughters who live in California. “I’d like to [have them all work for the company], but we don’t force them. If they are interested we will ask them to try. If they like it, the better. If not, it’s okay.”
Tony Tan Caktiong: the Jollibee Manager
Sunshine Lichauco de Leon wrote in Forbes: Tan takes a hands-on approach to product development. “If I taste a new product and like it, I will say, ‘Wow, this is good, we can do this,’” he says. “But [the] marketing [department] will want a product survey, which takes time. A lot of times I give in to them, but I try to balance the organization. Everyone can do market research. We also need gut-feel.”“ [Source: Sunshine Lichauco de Leon, Forbes, February 11, 2013 ]
“At work Tan believes in persuading people instead of ordering them, emphasizing coming to a consensus. He motivates people by delegating and maintaining a strong rewards system. “I learned to be kind to people, so I seldom scold a person in the organization, even in private,” he says. “I try to put myself in his shoes–try to imagine how he feels and respond from that point of view. I try to see if he did something wrong, is it intentional? Usually it’s not. You try to understand why so you can teach him.” Gerry A. Refugio Jr., the store manager at the Hong Kong Jollibee, says the company’s culture is what has kept him with the company for more than 20 years. Of Tan he says: “He has that charisma to move his people, and the strategic capacity.”
“To keep Jollibee growing, Tan is always on the lookout for new global trends, innovations and technology in the industry. He studies the design and product mix of other fast-food chains such as Wendy’s but looks beyond them. “We also look at airlines to see what they are doing on the service side, as we are also in the service industry,” he says. “And Disneyland–we learn how they keep their look. It’s more than 50 years old but if you go there it looks like it opened yesterday. And people are always courteous.”
Keys to Jollibee’s Success
Sunshine Lichauco de Leon wrote in Forbes: “A big part of Jollibee Foods’ success has been the development of market-leading brands across several categories. Jollibee outlets accounted for 49 percent of the company’s sales, as of September, and that share is slipping as the rest of its brand portfolio–both in the Philippines and abroad–grows faster. In the Philippines the company boasts Chinese fast-food chain Chow King, Red Ribbon bakeries, Mang Inasal grilled chicken outlets, Greenwich pizza parlors and its U.S. chain Burger King franchises. Lovell Sarreal, senior assistant vice president of research at Maybank ATR Kim Eng Securities in Manila, says, “Most competitors have single brands. Having multi-food concepts enables Jollibee to capture a bigger chunk of the dining-out market. For example, a typical customer can eat at Jollibee on Monday, Chow King on Tuesday, etc.” [Source: Sunshine Lichauco de Leon, Forbes, February 11, 2013 ]
“Tan says the company is ready to expand because it’s developed a management corps with the right experience in catering to local customs and preferences, but he’s aware of the challenges, such as maintaining consistency. “Food development is key, in terms of making sure that the hamburger here and there tastes the same regardless of whether ingredients might be different quality; beef might vary in taste or tomatoes in sweetness,” he says. “And as it’s a location-based business we need to know the community very well in order to understand traffic flow, where people stay.” Understanding that local consumers might have different tastes–Jollibee’s products are often saltier or sweeter –the company is open to adjusting recipes if needed. “Core products like chicken don’t need to be adjusted because, all over, they love chicken the same, but our spaghetti might be adjusted, as it’s supersweet,” he says. “For the Filipino market, we just have to do our job very well and it’s there. For the others you have to go beyond that. You have to build a brand because they don’t know anything about it.”
“Investors such as Lindsay Cooper, founding director of Arisaig Partners, a shareholder for ten years who now owns 3.5 percent of the company, cites Jollibee’s strengths. He sees a scalable, long-term growth story based on the rising consumption of fast food, strong brands that cater to local tastes, a dominant market position at home, strong cash flow and strong management. “Jollibee is clearly a thinking organization and continually evaluating the competitive landscape,” he says.
Jollibee’s Versus McDonald’s
Sunshine Lichauco de Leon wrote in Forbes: “In 1981, just three years after starting Jollibee, Tan heard some terrible news: McDonald’s was about to enter the Philippine market. Tiny Jollibee would soon be in battle with a global giant, both selling hamburgers and soft drinks. “We had a meeting to strategize how we could compete,” says Tan. After a long trip to the U.S. to study how McDonald’s operated, top managers brainstormed over every attribute that helps decide where customers go to eat and measured how Jollibee compared on each one. “We found that they excelled over us in all aspects–except product taste,” he says. “It suited Americans but not really Filipinos. Our [food] tends to be sweeter, more spices, more salty. We were lucky as it was not easy for them to change their product because of their global image.” [Source: Sunshine Lichauco de Leon, Forbes, February 11, 2013 ]
“But even “with better-tasting food, could we really compete?” wondered Tan. “If we want to compete we have to make sure we at least equal them in all the other attributes. It was a challenge because in advertising, promotion, store look, size, playgrounds, service speed, we ranked lower. We focused on the other attributes one by one.”
“Sometime later “we did a customer survey, and we were surprised we ranked higher than McDonald’s on a lot of attributes,” continues Tan. “We were surprised customers ranked us higher in courtesy and service style. Maybe they felt we were warmer? And then they liked our marketing, promotion and advertising better. And then customers kept just coming back.”“
“Eventually McDonald’s–which added nearly 50 outlets last year in the Philippines and now has 375–introduced new products geared to Filipinos. (It declined to comment on Jollibee.) “They have a Burger McDo, where they tried to Filipinize the burger, and McSpaghetti, because Filipinos really love spaghetti,” says Tan.”
Jollibee’s Goes Global
Sunshine Lichauco de Leon wrote in Forbes: Now Tan “is pushing an ambitious international expansion. His vision is clear: He wants to become a global player, with a 50-50 split between domestic and international sales by 2020. After a false start or two, the company’s 541 overseas outlets–up from 326 at the end of 2009–now contribute 20 percent to revenue. “It’s a challenge to reach 50 percent because the Philippines is growing fast so the outside has to grow much faster,” he says in an interview in his Manila office.” [Source: Sunshine Lichauco de Leon, Forbes, February 11, 2013 ]
“So Tan, who turned 60 in January 2013, is not only adding outlets in the U.S. and other places where large parts of the Filipino diaspora have settled. He’s also buying local chains in huge markets such as China and Vietnam that have few Filipinos. Last year Jollibee was the world’s fifth-fastest-growing restaurant company outside the U.S. in terms of sales, according to Euromonitor International. The rapid expansion is boosting revenue while profit margins hold steady.
“Jollibee made its initial moves abroad confident in the brand loyalty of the 10 million Filipinos working overseas. The company opened Jollibee, Chow King and Red Ribbon stores in the U.S. in the 1980s, and by 2008 it had franchises in Saudi Arabia, Qatar and the United Arab Emirates. A new Jollibee in Jersey City, New Jersey drew lines around the block for days after it opened last June. In the next few months Jollibee will open its first restaurant in Singapore and plans more. Opening Jollibees in places with large Filipino communities will continue, says Tan: “We don’t have to advertise when we open in these places. The longing for home is there. It’s just packed. They come here because it’s the taste of comfort food. When we opened a store in the Middle East, a customer asked me, ‘Sir, can you play your old jingle? I want my daughter to hear it.’”
Lyn Mina, a domestic helper in Hong Kong who visits the Jollibee branch in Central on her days off, explains, “All Filipinos love Jollibee because we feel like we are at home.” The sight of the bumblebee logo outside of the Philippines fills her with pride: “Jollibee can do what other food chains can do, franchise to other countries. It means that Filipinos can ma ke their name [around the world].”
Jollibee hasn’t expanded into Europe, where large numbers of Filipinos work, but Tan is open to it. “Filipinos are asking for it,” he says. “And interested parties are asking for a joint venture or franchise. So it’s a matter of internal capability and whether we have the people and support team. Right now we have not focused there yet.”
“Jollibee is also entering Taiwan with an agreement to join with a subsidiary of the country’s largest restaurant-chain group, Wowprime. The partners will own the hot pot dining chain 12 Sabu, which has 18 restaurants in Taiwan and plans for more in China, Hong Kong and Macau; Jollibee is making an $8 million investment. And it broke into Vietnam, spending $25 million in January of last year to buy half of the SuperFoods Group, which operates Highlands Coffee Shops, Pho24 noodle houses and Hard Rock Cafes. That deal expands Jollibee’s business in Indonesia, where it had 2 Chow King outlets and now also has 13 Pho24s.
Jollibee in China
Sunshine Lichauco de Leon wrote in Forbes: “But the road to becoming an international force must go through countries without a strong Filipino presence. In China the company opened a Jollibee in Xiamen in 1998 but had to close it three years later. So instead of building its own brand, Jollibee decided to buy already-popular brands and work to improve their strength in the marketplace. “We decided the harder thing to do was marketing the brand, so we buy brands with a following and just have to improve the back end of the operation,” says Tan. [Source: Sunshine Lichauco de Leon, Forbes, February 11, 2013 ]
“Jollibee opened more than 100 Yonghe King fast-food outlets in China over the last two years and now has 288 there; it bought the noodles, rice and dim sum chain in 2004. With its 52-outlet Hong Zhuang Yuan chain, a congee brand purchased in 2008, Jollibee improved the taste of the food, redesigned the restaurants and introduced new products. Last March it paid $6 million for 55 percent of Chinese beef noodle chain San Pin Wang, which now has 39 stores. Overall sales for Jollibee’s China operation rose 20 percent last year. “We don’t even have to launch a Jollibee store in China–these branches in themselves can be a major business,” says Tan.
“Generating $192 million in revenue last year, China is Jollibee’s biggest overseas market, but it’s not yet profitable. “Overall, if you include the head-office expense, they are still not making money in China,” says Maybank Kim Eng’s Sarreal. “It’s a tough market, and they are putting in a lot of resources. They are facing competition from brands like KFC and McDonald’s, which are bigger in China. Although they are different in food concept because Jollibee’s concept is Chinese, they are still fast food. The challenge is to turn around the China operations. The Philippine business is doing very well, but because of the drag in China, if you look at the consolidated financial statements, it’s not very evident.”
“Jollibee won’t say how much it loses in China, but it expects to break even in two years. It says its three chains there enjoy a strong cash flow but that the company is investing heavily to generate long-term growth. In 2011 it opened a food processing plant in Anhui Province and built a research and development center and corporate offices in Shanghai. “It is a matter of getting to a certain number of stores and continuously growing our same-store sales to achieve absolute profitability in China,” says Tan. “We now have nearly 400 stores. We estimate we need 500 to get to breakeven. We think we can get to that in 2014.”
Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Philippines Department of Tourism, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.
Last updated June 2015