The Jollibee-owned coffee chain posted a $41m profit last year after introducing more low investment, small-format stores and a new premium beverage range
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Highlands Coffee customers | Photo credit: Jollibee Foods Corp
Highlands Coffee’s network scale and strong consumer appeal yielded strong returns last year as the Vietnamese coffee chain generated over VND 1trn ($41m) in profit.
Majority-owned by Filipino food group Jollibee Foods Corporation (JFC), Highlands Coffee currently operates more than 800 outlets across its domestic market and a further 43 in the Philippines – its only international market.
Alongside its traditional high street stores, Highlands Coffee’s has focused on small-format sites in commercial spaces, such office buildings, apartment blocks and travel hubs. In the third quarter of 2024, the coffee chain diversified its footprint further by rolling out to-go kiosks and coffee carts at petrol station forecourts.
The strategy, which is intended to maximise brand coverage while keeping investment costs low, strongly contributed to Highlands Coffee’s 4.5% year-on-year EBITDA growth.
However, an increasingly competitive branded coffee shop landscape in Vietnam and weaker consumer spend last year negatively impacted the coffee chain’s 2024 revenues. According to its financial results, average per store revenue fell to approximately VND 16m ($625) with like-for-like sales across its network declining 3.7%. JFC estimated Highlands Coffee’s total revenues between VND 4.6trn-VND 4.9trn ($182.4m-$194.6m).
The mid-price coffee chain competes with higher-cost operators, such as Trung Nguyên Legend and Starbucks and lower-cost franchises Trung Nguyen E-Coffee and Viva Star Coffee. It is also facing stronger competition from resurgent mid-market rival Phuc Long Coffee & Tea and up-and-coming boutique operator Katinat.
To keep pace, Highlands Coffee has introduced more premium iced and blended beverages, such as Phin Sua Da, Green Tea Freeze and Cold Brew Kem Sữa, to raise the profile of its traditional Vietnamese food and beverage menu – an approach that appears to be resonating with consumers, particularly those under the age of 30.