MANILA, Philippines — Shakey’s Pizza Asia Ventures Inc. (SPAVI) is bringing Singapore's hugely popular milk tea brand R&B to the Philippines to expand its portfolio and take a slice of the country's growing milk tea and bubble tea market.
In a disclosure to the stock exchange on Tuesday, SPAVI said it entered into a deal with Singapore-based Koufu Group Ltd. to acquire the master franchise to sell R&B milk tea to the Philippines.
"We are pleased to bring the R&B milk tea experience to the Philippines, and we look forward to WOW-ing our guests with the brand’s premium quality milk tea and bubble tea offerings," Vicente Gregorio, company president and chief executive, said.
Under the agreement, SAPVI will bag the territorial rights to sell products under the R&B milk tea brand in the country through stand-alone store formats and in select Shakey’s and Peri-Peri Charcoal Chicken restaurants through a "co-branding" strategy.
The co-branding allows SPAVI to leverage on its "well-established" store network and delivery infrastructure to sell the new product, the company said. R&B drinks will be first offered in Manila.
"This co-branding initiative is likewise in line with our renewed focus on out-of-store consumption, enhancing sales thru these channels with minimal additional investment and maximizing the use of our existing assets," Gregorio explained.
R&B is one of the leading milk tea and bubble tea players in Singapore. It currently has more than 1,000 outlets worldwide, spanning across China, US, Singapore, Cambodia, Vietnam, Malaysia and Indonesia.
SPAVI's decision to bring home R&B comes at a difficult time for the restaurant industry, which is still reeling from the impact of movement restrictions imposed to arrest coronavirus spread. In the first half, SPAVI suffered a net loss of P290 million on the back of 31% decline in overall sales after lockdowns forced the company to shutter 91% of its stores in end-March.
That said, Gregorio said that while SPAVI is conserving cash to stay afloat, the company still has room to pursue some of its business plans. “Though we remain in unusual times and continue to prioritize cash and liquidity as we navigate thru the crisis, we are also working on a number of strategic initiatives, including this one," he said.
As it is, the Philippines' milk tea and bubble tea market is proving to be promising. Based on SPAVI's estimate, approximately 45 million Filipinos aged between 15 to 39 years old are the typical market for the product.
"We are excited to bring our high growth tea beverage concept brands to a new market, the Philippines, with Manila as our initial landing point," Pang Lim, Koufu's executive chairman and chief executive, said.
"We have carefully considered the market trends and found the conditions in the Philippines to be favourable, where there has been a growing receptiveness towards the bubble tea culture in recent years. We are confident that the locals will enjoy our R&B beverages, as do our customers in other markets," Lim added.
On Tuesday, shares at SPAVI rose 1.62% to close at P5.56 apiece.