In a move that’s likely to shake up the fried chicken and bubble tea sphere, Jollibee Foods Corp said it has signed a deal to buy a 51 per cent stake of bubble tea company Milkshop International (Milksha).
The deal is at a price tag of US$12.8 million (S$17.3 million) and Jollibee plans to tap on this enterprise to accelerate its global expansion plans.
The acquisition, which will be made through its subsidiary Jollibee Worldwide, will provide the fast-food group the “opportunity to participate in this fast-growing beverage category and together with Milkshop’s founder, grow the Milksha brand globally”.
Bubble tea craze
Besides being a crutch for many Singaporeans, the bubble tea business is also raking in the big bucks. Recent estimates have placed the bubble tea industry to reach US$3.39 billion by 2027.
Milkshop hails from the ‘Land of Bubble Tea’, Taiwan, and Tainan. Founded in 2008, it operates specialty tea shops under Milkshop and Milksha trade names.
It has more than 250 outlets, of which 231 are in Taiwan and the rest are in Singapore, Hong Kong, Melbourne, and Vancouver. (You’ll remember the frenzy and snaking queues when Milksha announced its debut in Singapore.)
Milkshop might even be one of those businesses that are pandemic-proof. Its systemwide sales rose 12 per cent to US$74.7 million last year despite the pandemic and are generating modest net income, Jollibee said in a statement.
Jollibee ramps up global expansion plans
These reasons must have made it an easy decision for Jollibee to take up a stake in Milkshop. As one of the cult and preferred fried chicken brands, Jollibee is known for its crispy fried chicken and iconic sweet spaghetti.
The group has been looking toward overseas expansion and opportunities created by Covid-19 as it rebounds from historic losses that’s also pandemic-driven, its CEO Ernesto Tanmantiong had said in a March interview.
“This gives Jollibee the opportunity to participate in this fast-growing beverage category and together with Milkshop’s founder, grow the Milksha brand globally,” the Manila-based food chain said in a statement.
This is not Jollibee’s foray into worldwide expansion; Jollibee had recently bought out its remaining partners in the fund that owns Michelin-starred dim sum restaurant, Tim Ho Wan.
Jollibee’s subsidiary, Jollibee Worldwide, purchased the remaining 15 per cent owned by other investors in Titan Dining (the private equity fund that owns the Tim Ho Wan brand and stores). This represents S$71.56 million (US$52.7 million) of the shares.
Jollibee and boba
As if your cheat day at Jollibee couldn’t get any better, Milksha products are now being sold in some Jollibee units under a licensing agreement.
Jollibee’s latest deal follows that of Philippine restaurant operator Shakey’s Pizza Asia Ventures, which last year brought Koufu Group’s R&B milk tea brand into its home country.
Shakey’s has rolled out R&B milk tea in more than half of its pizza and Peri-Peri Charcoal Chicken outlets, with dine-in and delivery options. It seems like bubble tea is poised to take over the world, one pearl at a time.
Featured Image credit: Milksha, Jollibee