Jollibee’s top status in its home of the Philippines may be rock-steady, but it aims to be a global giant. CEO Tony Tan Caktiong has long aspired to make Jollibee Foods (JFC) a global champion and transition beyond the flagship brand’s roots as a family firm and source of national pride.
But efforts have had only modest success. After decades of trying, the Jollibee chain has only 133 foreign branches (compared with 890 at home), serving mainly expat Filipinos in the Gulf and California.
The firm has recognised the need to buy foreign restaurant chains with menus better suited to local tastes. A trio of Chinese-cuisine chains acquired since 2004 has garnered the firm a foothold in China, and the market now accounts for 12 per cent of its total sales revenue.
But can the flagship brand ever join the ranks of McDonald’s and KFC? If so, how?
- JFC also owns the Philippine Burger King chain and Chowking
- Sales and net profits have increased by around 70 per cent since 2010
JFC plans to acquire 40-per cent stake in Smashburger, the US burger joint
The issue that is stopping Jollibee from global success lies in its products, which suit local tastes very well but lack international appeal.
The taste profile for Filipinos differs considerably from most other countries. To be successful outside the home country, Jollibee and other Filipino food brands need to adjust their recipes to suit international audiences. Lowering sugar content will be a first step.
The dilemma in changing the recipe is that brand loyalists will feel that the product is no longer original. This shift in taste could alienate the core supporters. But without recipe adjustment, acceptance of the product in new markets may not be possible.
One solution may be to launch a sub-brand that has products that cater to the global market. This will leave the original brand intact, while allowing the new sub-brand to appeal to a much wider audience.
The QSR marketplace is highly competitive. We see a proliferation of gourmet outlets trying to close the gap by finding a niche in the upper segment of the market. Jollibee won’t stand out from its competitors in its current form.
A complete rethinking of its product offerings and brand differentiation is required if the brand is to find any success outside the Philippines. A sub-brand may just be the answer to this problem.
There are many variables that influence Jollibee’s coming of age as a global brand, from supply chain to local partnerships. But when it comes to marketing, I would urge them to follow uncommon sense, as, like many things in life, markets behave in counter-intuitive ways.
For instance, the reason why they’re big at home is exactly why they’re small abroad: it’s easier to remain number one than to become one, even if you offer the very same product.
This is due to a marketing pattern called ‘double jeopardy’, with the market leader enjoying both greater market share and greater purchase frequency due to its larger availability, both physical (number of stores) and mental (share of mind). This explains why McDonald’s is still big, although no one really likes its burgers. (Seriously, who does?)
The questions Jollibee should ask itself are not “What do we sell?” and “How can we sell it here?” but rather “Does anyone need us?” and “What would they miss if we were gone?”
The bad news is that right now no one needs another chain selling burgers and fried chicken. But the good news is that mainstream fast food hasn’t seen proper innovation in decades. There are lots of opportunities to reinvent the wheel and come up with new things people would like enough to miss if they were gone.