PEERING INTO THE FUTURE OF QSR FROM MANILA IN THE '90S
In 1995 the London-based consulting firm I was working for posted me to Manila to set up an Asia office to service our No.1 client, Procter & Gamble. In the year between school and university (1985-6) I had worked and travelled my way through the US, Hong Kong, China, Indonesia, Singapore, Thailand and India. But somehow, I had missed out on the Philippines.
Manila is a 24-hour city, and a dangerous place for a 28-year-old who had always struggled with the concept of bedtime. It was also considered a regional backwater. Having been one of the leading economies in Asia after World War II, the long and ultra-corrupt presidency of Ferdinand Marcos had emptied the country’s coffers and caused a big chunk of an impoverished population to seek employment and opportunity abroad.
One thing was clear on arrival though – it was a fast food paradise. In an environment where urban planning seemed a low priority, low-rise townscapes were beset by an ever-escalating arms race of towering restaurant signage. It was like a hellish vision of a third world 50s America with sprawling shanties surrounding and even leaning against huge, blinding stand-alone eateries which looked as if they had been lifted from a spaghetti junction in downtown Los Angeles.
Ethnic Chinese franchisees ran local outposts of big (and small) American brands. Myself, I quickly became a regular at Kenny Rogers Roasters which opened around the time of my arrival. Although invariably empty when I went to pick up my Honey Bourbon Rib & Chicken Platter, a quick Google search reveals – to my immense surprise – that the chain still abides in Manila and elsewhere in the Philippines, despite the Country star’s business having disappeared decades ago in the US. Other things surprised me. Twenty-four hours a day delivery bikes buzzed around local neighbourhoods with hot food.
As night fell, through the smoky light came vendors selling – and chanting – Baluuuuut. Balut is a traditional streetfood, popular as a fertility aid for men, often sold outside the Sabong, or cock-fighting stadium. Brace yourself, it is a smoked, fertilised duck embryo served in the shell. I am someone who thinks he can eat and enjoy anything, including fermented herring. But biting off the top of an egg, sucking out the embryonic fluid and then chewing on a partially-feathered pre-natal duck absolutely defeated me.
In Manila, however, one food experience rules them all: Jollibee. Having launched as an ice-cream parlour in 1975, by the time McDonald’s launched in Manila in 1981, Jollibee had evolved into a distinctively Filipino take on the mainstream American QSR outlet. Its famous Yumburger and Chickenjoy fried chicken, generally served with a side of super-sweet spaghetti, are the big sellers. But the chain still has room for local specialities such as the Palabok Fiesta, Beef Tapa and Longanisa Sausage to name but a few. My personal favourite remains the Amazing Aloha Burger which features a slice of fresh pineapple.
Many dishes are served also as platters for sharing in line with the Filipino cultural meme kamayan or togetherness. In the 1990s most restaurant visits I saw were by large multi-generational family groups, presided over by grandparents. Jollibee’s flavour profile is extremely parochial. All dishes are sugary, but also vinegary, echoing traditional Filipino dishes like Adobo (meat cooked in wine vinegar, a hangover from the country’s two centuries as a Spanish colony before the Americans took it over in 1898).
The long and the short of it is that when McDonald’s and other US brands arrived, they didn’t stand a chance. The Philippines proudly remains one of the few countries in the world where McDonald’s has been unable to establish market dominance. And the Filipino Ray Kroc? A Chinese-Filipino genius, Tony Tan Catkiong, whose net worth is well in excess of a billion dollars.
And, now Jollibee is going global, with c.5,800 outlets in 21 countries and the stated objective to become one of the top five QSR businesses in the world. Its current run-rate of openings is 10 a week. Given what we now know about the impact of Covid, the group was probably lucky to have missed out on buying Pret for $1 billion in 2018. Notwithstanding, Jollibee Foods Corporation currently has 14 brands in its portfolio with its overseas portfolio including Smashburger and Tortas Frontera in North America, Highlands Coffee and Pho24 in Vietnam (where it also has 120 Jollibee units), and Dunkin’ Donuts in select territories in China. Plans in the UK following the spectacularly successful launch in Earl’s Court in 2019 include opening 10 new sites this year with 20 to follow in 2022.
Despite posting a 2021 loss of $200m due to the Pandemic the Company is sitting on $1.2 billion of cash and is looking to have 50% of sales from outside the Philippines by 2025.
Jollibee is coming.