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Friday, August 26, 2005
Zosa: Red letter day ahead for Red Ribbon owners
By Elbert Zosa
Biz Vantage
TWO SUCCESS STORIES. Jollibee and Red Ribbon. Thirty years ago, Jollibee started as an ice cream parlor. Now, the giant Jollibee, which has P27 billion in annual sales, will be taking over the operations of the 26-year-old Red Ribbon, which generated P2.5 billion or roughly nine percent of the acquirer’s sales.
Industry speculators anticipate the purchase price to be more than P2 billion for this company, which started in the kitchen in one of the owners’ homes. Three families reportedly share the ownership of the company.
It’s interesting that of Red Ribbon’s 147 stores, 16 are in California, where Jollibee has not done as well with its own outlets. Jollibee has, however, demonstrated an excellent track record in making good use of Chowking and Greenwich Pizza, which it acquired earlier.
Those who have followed developments in both chains have seen the impact of the new product development, restaurant operational changes and improvements in marketing, such as in branding, signage and colors. In China, Jollibee reportedly has done well with Yonghe King, the fastfood chain it bought.
I wonder how this new addition will jibe with the Delifrance operation. Still, I think that Red Ribbon, along with the other chains, will be key in the international expansion of Jollibee, which has opened stores in China, India and Indonesia.
It is good that Filipino companies like Oishi, Universal Robina Corp. (URC) and San Miguel Corp. are expanding abroad. Oishi is a big brand in China. San Miguel has gone international through its acquisitions lately, while URC has been launching its own products like the C2 tea health drink and other snack foods.
One can only speculate on why the owners of Red Ribbon decided to sell out. But whatever sadness they may have on losing the company should be mixed with the happy trip to the bank and the satisfaction that they made an outstanding success of their home kitchen venture during their lifetime.
Lorenzo in fast food. Another group that has ventured into the fastfood business is the Lorenzo family’s Lapanday, although they did not commence operations in their own kitchen. One could probably say that they started out in the pineapple fields of Bukidnon.
After acquiring Pancake House and expanding it to more than 50 stores, they bought Dencio’s Bar and Grill, a Filipino food restaurant, which will have 29 stores by the end of the year. Last month, they were reportedly negotiating to buy Teriyaki Boy, the Japanese fast food chain with 10 outlets.
Incidentally, Luis “Cito” Lorenzo, former secretary of agriculture, was seen in the US west coast and in New York, where he was drumming up support and funds for Gawad Kalinga, the outstanding project that has provided thousands of homes for the poor.
There are Cebuano food groups that are good enough to invade the biggest market that is the greater Manila area, but somehow, they have been diffident so far.
(August 26, 2005 issue)
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