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Francorp - The Franchising Leader in the Philippines

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Hungry for more: Is there still room for food brands in the Philippines?

Sam Christopher Lim
SVP for Marketing and Strategy, Francorp Philippines

 

Let’s face it, Filipinos love to eat.

eatingIt’s a relationship that goes deeper than infatuation: for most Filipinos, eating is a celebration of life itself. But it can be a crazy and expensive love affair sometimes—on average, a typical Filipino eats around four to five times daily. And given the growing number of food businesses in recent years, from casual dining restaurants to small-scale food cart concepts, one can safely say that it’s a love affair that has influenced even the country’s economy. But even with this growth, is there still room to grow for the local food industry?

 

Room to grow

Economists have pointed out that the Philippines’ predominantly young demographic with disposable incomes bodes well for local food businesses. But another way of looking at it is to compare our local food industry with that of our Asean (Association of Southeast Asian Nations) neighbors. For example, there are around 32,166 food establishments in Singapore, which only has a population of 5.5 million—this means that there are only 171 people for every food establishment. On the other hand, Thailand has 498 people for every food establishment, while Vietnam has 159.

 

The Philippines still has a lot of room to grow given its current ratio of 785 people for every food establishment—just by mirroring the ratio of Thailand, the Philippines would already have the potential to grow the number of its food establishments by 40 percent.

 

Making way for foreign food brands

Alongside this growth of local food concepts also comes the arrival of numerous foreign food brands. In recent years, delegates from South Korea, Japan, the United States, and Europe have visited the country to promote food brands which have set their sights on the Philippines. Through these visits, these delegates can also meet potential franchisees, which will be their partners in setting up the food business in the country.

Denny’s, a famous food brand from the United States, has been working on its launch in the Philippines since late 2015. More recently, a trade exhibit has also been held to promote Japanese food brands which want to enter the Philippine market.

 

Break into the food business via franchising

For any entrepreneur who wants to break into the food business, franchising a foreign food brand is a great starting point, as it already brings with it scalability and international standards. If a food entrepreneur really wants to dominate the market segment and have leadership positioning in the concept, then he should really opt for an international franchise brand and plan to grow the business in the local market. The question now is, which food brand should you consider?

 

The search for an international food brand to franchise can be tricky and elusive. “Selecting a concept is a strategic decision. You have to consider your company’s strengths to make sure you can leverage on the international standards,” says Hsien Naidu, director of Singapore-based management consulting company Astreem Consulting Pte. Ltd.

 

Food entrepreneurs are also advised to learn international standards and immerse themselves in a community of reputable international franchise experts, as this can also introduce them to the various foreign food brands which want to set up shop in the Philippines.

 

Just last February, U-Franchise Sales and Management, in partnership with Astreem Consulting Singapore, held a three-day showcase of the best foreign food franchises available on the market. The event was held not just to bring international standards to the local food, education, and retail market, but also to create value for entrepreneurs and the local business community. Guests learned the best practices of some of the biggest brands from Singapore, such as Pasta Mania, Pet Lovers Centre, Han’s Cafe, Tenderfresh, and Manhattan Fish Market.

 

Events like these are held regularly to give local entrepreneurs practical insights on which foreign brands will be suitable for the Philippine market, and how international brands can help turn Filipino entrepreneurs into industry leaders.

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