Filipinos are serious chocolate lovers (and Jollibee knows it)

Katherine Visconti
As the head of a major fast food empire, Tony Tan Caktiong knows Filipino taste buds and he is banking on chocolate lovers

MANILA, Philippines – One of the biggest bakeshop chains in the Philippines, Red Ribbon, is thanking local chocolate lovers for its P3.7 billion sales in 2011, an 8% jump from 2010.

Company leaders are paying homage to the best selling cake in Red Ribbon’s 33-year history: the “Triple Chocolate Roll.”

The volume sales of the “moist chocolate chiffon cake covered in smooth chocolate icing” shot up 305% to 2011 from 2010.

At the sidelines of the annual stockholders meeting for Red Ribbon’s mother company Jollibee Foods Corp., company CEO Tony Tan Caktiong said, “Filipinos in terms of flavor, they really love choclate.”

“Assuming let’s say we do a strawberry roll maybe it will not be as successful as a chocolate roll. So it’s a combination of taste, pricing and the right portion to give us the right margin,” Caktiong stressed.

Next to chocolate cakes’ phenomenal growth, the company’s dedication cakes, of which a popular variety is the chocolate rectangle cake, posted a volume growth of 256% in 2011.

Changes and profits

Jollibee explained that Red Ribbon’s 2011 profits jumped 95% from 2010 due to company-wide efforts on the backend and better product portfolio mix. (Jollibee did not provide total profits of the unit for the year.)

After a lackluster performance in 2010, Red Ribbon streamlined and optimized its organizational, operations and retail systems in 2011, Jollibee said in its latest annual report. 

This resulted in 242 stores by end-2011, fewer than the 259 Philippine and US stores in 2010,

“The product line-up of key categories was reduced from 1,770 to just 180 stock keeping units to achieve a more efficient product portfolio,” the company wrote.

Aside from best sellers Triple Chocolate Roll and and Dedication Cakes, the cake and pastry company also introduced of leche Flan Roll, Mocha Choco Crumble, Yummy Cheese Roll, Mango Cream Pie, and various licensed Birthday Cakes in 2011. 

Jollibee acquired Red Ribbon in 2005.

Sticking to core

Tony Tan Caktiong, who controls the business, is the 12th wealthiest man in the Philippines thanks to the fast food empire. While the majority of the Filipinos who made this year’s rich list have ventured into diversified conglomerates, Caktiong has stuck mostly to food and plans to in the near future.

At JFC’s annual stockholders meeting on June 23, he said he doesn’t plan to buy an airline or television station because he prefers to stick to his area of expertise. Asked about plans for expansion the CEO said, “We will focus on the fast food catagory.”

Chief Financial Officer Ysmael Baysa added, “I think that is where we are very different. While we took on foreign companies in both the Philippines and abroad we keep on acquiring companies within our core competence, our own business.”

“We may go slightly a little bit higher on a casual restaurant but mainly on the fastfood… It’s more our expertise we feel we know the fast food territory better and once we hit a model right we can just keep growing and growing,” said Caktiong. – Rappler.com