Espresso, anyone?

In these times of uncertainty, one of the country’s biggest flour millers has gone into retail and is on the prowl for more opportunities to diversify.

"Diversification is always on our minds. We are always looking for new business lines to push," said Ernesto Fajardo, president of Liberty Ventures, Inc. which operates two Segafredo Zanetti Espresso Bars in Makati.

Liberty Ventures is a subsidiary of Liberty Commodities Corp., which is in the business of wheat trading and manufacturing. LCC ranks among the country’s top 500 corporations while its flagship, Liberty Flour Mills, with over P1 billion sales, ranks in the top 100 bracket. As a group, Liberty is involved in a wide range of enterprises, including food, animal feeds, chemicals, plastics, real estate, engineering, services and biogas consultancy.

Study

The decision to go into the gourmet coffee business came after diligent study. "The industry potential remains great after the market has been developed by both local and foreign companies. Coffee drinking in the Philippines also starts as early as aged 12 in the Philippines. This is the market that we can develop," said Fajardo.

To reduce its learning curve, the company tied up with Segafredo, a fully integrated coffee company which owns coffee plantations in Brazil; operates roasting plants in Italy, France, Austria, and Netherlands; manufactures coffee-making machines under the San Marco brand; and operates a worldwide chain of coffee shops.

"Because Segafredo can take control of all elements from the first step–the production of the bean– to the final outcome, the cup of specialty coffee served to the customer is superior. In fact, Segafredo ranks number one in espresso coffee among coffee chains," said Fajardo.

Partnership

Liberty’s courtship of Segafredo took three years and a second visit to the Philippines by Segafredo executives. "They were very choosy. They didn’t want to set up the flagship café just anywhere. At the time, we were being offered a space in Alabang but they wanted Makati. Since there was no more space in Glorietta, we waited for the opening of Greenbelt 2 and 3," said Fajardo.

The Segafredo café in Makati remains unique. Unlike its counterparts in Europe (which serve only cakes, pastries, and sandwiches, along with the coffee) and in the United States (which serve just salads), the first Philippines outlet was allowed to serve pizza, appetizers, pasta and even whole meals.

"Our second local outlet serves breakfast and delivers meals within the vicinity," said Fajardo.

Location

To attract the upper C market, Liberty keeps its coffee prices reasonable.

"We are catering to a small, highly mobile market whose preferences and taste shift endlessly. Once, everybody wanted to hang out in Manila. Now, the fad is to be in Makati. Perhaps tomorrow, the Fort Bonifacio area will be the place to go. In the case of Fort Bonifacio, its development is not contiguous, so it is difficult to decide where to put an outlet," said Fajardo.

Competition is another factor. In Greenbelt alone, there are over 100 restaurants and bars competing for the customer’s peso.

Liberty has existing applications for more outlets in major malls. The company is also considering Forbes Park, Greenhills, and Eastwood.

"Our greatest hope is that Filipino coffee aficionados will develop a lasting taste for the best," said Fajardo.