French Baker’s recipe for success: Ability to remain relevant and compete in ever-changing business landscape

MANILA, Philippines - While most people search for romance in Paris, it was a business inspiration which a Filipino entrepreneur found in the city of love.

Such inspiration turned him into one of the most successful young businessman in the country as he single-handedly revitalized the Philippine bakery business.

It was 30 years ago when then UP Diliman College of Business assistant professor Johnlu G. Koa took a two-month long back pack trip to Europe.

During his tour, he was able to see a lot of French bakeries that offered artisan breads where customers queued for just out-of-the-oven baguettes and croissants.

“That image stuck to my mind for many years until 1989 when an opportunity came up for me to open a new brand in a new mall,” Koa, founder and chief executive officer of The French Baker, told The STAR.

“Having taught business policy for many years, I realized then the importance of entering an industry where the entry barriers are high and exit barriers are low. Our being ‘first to market’ of course, gave us that crucial competitive advantage,” he added.

With an initial capital of P1 million, Koa opened the first French Baker branch in 1989 at SM City North EDSA.

His aim was to invigorate the bakery concept which most Filipinos were accustomed with during that time.

“I envisioned The French Baker to be a new bake shop category that was strategically differentiated from the other leading brands in the malls. I took on the name French Baker to signal to the public that we were not the usual bakery concept that they were accustomed to,” Koa said.

“I was first in the category of fresh French bakery-café where nobody dominated. At that time I was able to discover a blue ocean market space by baking French and European breads that were only found in the five-star hotels. I focused on designing and building a unique concept store so that customers can enjoy a new bakery and dining experience,” he added.

During the business’ first five years of operations, Koa said the challenge was in managing a rapidly growing chain of bakeries where he had to contend with training competent bakers and ensuring that quality standards are met all of the time.

In the succeeding years, he said the hurdles evolved into more of competing with those that copy the business in locations where it was not present as well as the entry of international firms whose brands are already well-established in their respective home countries.

Koa, however, remained unnerved with growing number of issues needed to be dealt with and stayed on course with his goals for The French Baker.

“It was not difficult to envision or visualize the extent with which we could grow into. While teaching, I had been exposed to various business case analyses where such growths are discussed and analyzed. What remains important to our brand is our ability to adapt and compete in an ever-changing business climate characterized by turbulence as a result of natural and man-made calamities,” Koa said.

Koa said the company for years has been a pioneer in the baking industry, having been the first to introduce 100 percent whole grain breads in all of its stores nationwide.

“We also have the widest variety of consumer breads including bagels, ciabatta, flour tortilla, English muffins, French sourdough, carrot bread, raisin loaf and rye bread. Very soon we shall be including a range of Gluten Free breads in our line up,” he said.

As a result of its consistent service and innovation, Koa said the company sales have grown between five and 10 percent annually in the last 10 years.

The French Baker to date has 53 outlets nationwide and is about to open store number 54 at the Ayala Mall in Tagaytay. The existing stores are mostly located inside shopping malls and supermarkets.

“Where malls have a sizeable call center and office market, those are our major target market. Where malls are inside supermarkets and hypermarkets, shoppers and families are our targets,” Koa said.

The company has been growing its store network by about two to three a year and is likely to continue doing so according to its founder.

In its 26 years of existence, the company has also expanded its workforce to about 600 to date.

“I believe that growing the business is not just a matter of expanding the number of stores. It is more of what the consumers perceive our brand The French Baker to be. Trying to be relevant to their changing lifestyle is more important. Of course, we should continue to open a few a year at our own pace. That’s more pleasurable for me to manage,” Koa said.

“With 25 years of bakery retailing experience, I believe that we have learned a lot of moral lessons along the way. I still go around the malls to hold baking and cooking sessions in the activity centers around the country. I believe that this is one way of making The French Baker relevant to them,” he added.