Jollibee brews South Korean coffee venture with new acquisition

MANILA, Philippines — Asian food conglomerate Jollibee Foods Corp. (JFC) continues its buying spree with the acquisition of a South Korean value coffee brand to further fortify the group’s coffee and tea business.

JFC’s wholly owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL) is set to acquire majority shareholding of 70 percent in Compose Coffee Co. Ltd. and JMCF Co. Ltd., collectively called Compose Coffee, for approximately $340 million.

Titan Dining II LP and Elevation Equity Partners Korea Limited will hold the remaining shareholdings in Compose Coffee with effective interest of five percent and 25 percent, respectively.

Through JWPL, JFC has a 90 percent participating interest in Titan Fund II, which is focused on strategic investments in food and beverage concepts with the objective to further grow in Asia Pacific food service brands and bring strong global food service brands to the region.

Elevation, on the other hand, is a private equity firm focusing on mid-market buyouts and growth capital opportunities in the consumer space in Korea and the rest of Asia.

JFC said the acquisition is aligned with the group’s commitment to the coffee and tea Segment and franchising initiatives.

Part of JFC’s growth strategy in scaling its business includes growing its coffee and tea business as well as ramping up franchising in key markets globally.

JFC sees the strategic and financially lucrative investment in Compose Coffee as its gateway in unlocking the fast-growing international value coffee market in South Korea, which ranks third globally in terms of coffee consumption per capita.

According to JFC, Compose Coffee ranks first in the industry for having the highest growth rate in the number of franchised stores and in terms of brand satisfaction among Korean coffee brands.

Its 2,470 stores are 100 percent franchised and are fully supported by Compose Coffee’s largest in-house coffee roasting plant in Korea, enabling the provision and distribution of high-quality, specialty beans at low cost.

JFC said Compose Coffee is on track to be the largest, fastest growing and leading value coffee player in South Korea, with V of popular K-pop group BTS as its current brand ambassador.

“The business that Compose Coffee has built in the past 10 years is impressive and we are excited to play a major role in its next phase of growth. We believe that Compose Coffee is a compelling strategic fit for JFC and is on track to becoming the largest, fastest growing and leading value coffee player in South Korea,” JFC chairman Tony Tan Caktiong said.

Along with Elevation and Titan Fund II, Tan Caktiong said JFC would work with the Compose Coffee’s accomplished management team to further accelerate the company’s growth in existing and new markets as well as capture the significant whitespace in South Korea’s value coffee market.

“We are delighted to enter this partnership with JFC. We believe that JFC’s resources and expertise in F&B brand development combined with Elevation’s entrepreneurial mindset and local market expertise in value coffee will provide synergies in securing a sustainable future for Compose Coffee that will enable it to grow for many years to come,” Elevation’s managing partner Gordon Cho said.

Upon the completion of the acquisition, Compose Coffee is expected to boost revenues of JFC by two percent, bringing the international business’ contribution to 41 percent of global revenue.

Other coffee and tea brands under the Jollibee Group’s portfolio are Highlands Coffee, Milksha, Common Man Coffee Roasters as well as The Coffee Bean and Tea Leaf.