The Filipino foodservice group will focus on growing Compose Coffee in its home South Korean market over the next five years before seeking international opportunities
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Compose Coffee is the fourth largest branded coffee chain in South Korea by outlets with 2,600 sites | Photo credit: JFC
Jollibee Food Corp (JFC) is focused on maximising the growth potential of Compose Coffee’s 2,600-store portfolio in South Korea after announcing it will acquire a 70% stake in the value-focused coffee chain for $238m in early-July.
JFC Chief Financial Officer Richard Shin told local news agencies that the Manila-based foodservice group had no immediate plans to launch Compose Coffee in the Philippines or other international markets as it has done with its other coffee chains Highlands Coffee, The Coffee Bean & Tea Leaf and Common Man Coffee Roasters.
“There is no plan to bring Compose Coffee to the Philippines. We’re very focused on here for at least the next five years,” he said.
Compose Coffee is the fourth largest branded coffee chain by outlets in South Korea behind Ediya Coffee, Paris Baguette and Mega Coffee, which operate 3,800, 3,750 and 3,000 stores respectively. It currently operates one international store in Singapore, where it debuted in July 2023.
“Compose is sitting at 8% market share in Korea so we think there’s plenty of focus and plenty of opportunities,” Shin added.
JFC is seeking to increase Compose Coffee’s presence in the South Korean capital Seoul, where it said the brand is currently ‘under-indexed’. The foodservice group said South Korea is a ‘lucrative and quite profitable’ market for coffee chains and will provide quicker payback for shareholders than expanding abroad.
As part of its majority acquisition announcement, JFC said Compose Coffee would immediately be included in its financial statements and noted its debt-free balance sheet and strong profit margin.
The deal is still subject to closing and financing conditions, however, the Filipino operator forecasts Compose Coffee will add 2% to its revenues, 12% to its EBITDA in 2024 and increase its current 6,886-outlet portfolio by 34%.