British brands invading Philippines

Asif Ahmad, the UK ambassador to the Philippines, is one of the busiest diplomats in the country, as he leads, almost on a weekly basis, the opening of new outlets put up by dozens of British companies which are taking advantage of the rapidly growing consumer market and improved purchasing power of Filipinos.

Ahmad, the 59-year-old diplomat who has been assigned in the Philippines since July 2013, says while several British companies have established their presence in the country for several decades now, more are expected to land in the Philippines soon.

“We have done it in fashion.  We have done it in cars. We have done it in films and music.  The next story is eating and drinking,” says Ahmad, during the opening of the second outlet of Costa Coffee in the Philippines at Robinsons Place in Ermita, Manila.

Costa Coffee, the leading coffee chain in the United Kingdom, is the latest British brand setting its sights on the Philippine market, which Ahmad says offers a lot of opportunities for foreign companies.

The ambassador says the expansion of British firms in the country is a part of a deliberate effort of the London government to triple its exports to the world to 1 trillion pounds by 2020.

Unilever, an Anglo-Dutch company, is one of the biggest distributors of consumer products in the Philippines while Royal Dutch Shell Plc. is one of the three largest petroleum players in the country.

The last couple of years saw dozens of UK firms opening outlets or expanding their presence in the Philippines.  In November 2013, London opened its airspace to Philippine Airlines via Heathrow Airport, with the help of Ahmad.  This has triggered a faster movement of people, including investors and tourists, between the two countries.

British financial giants HSBC, Standard & Chartered, Barclays and Pru Life UK have strong presence in the Philippines while UK companies that are expanding in the country include Pearson Plc., Ashmore Group, British American Tobacco, British Petroleum, ECR Minerals Plc., CRH Plc., Arup, Nectar Group Ltd., MacKay Green Energy Inc., Forum Energy, Pitkin Petroleum Plc., Eaton Corp. Plc. and Weir Engineering Services Ltd.

Top British brands opening or adding outlets in the Philippines include Rolls Royce, Range Rover, Jaguar, Mini Cooper, Morgan Motors, Tesco, The Body Shop, Fitness First, Toni & Guy, Remington UK, Marks & Spencer, Debenhams, Lee Cooper, F&F, John Lewis, Burton, Reiss, Speedo, Hamleys, Burberry, Topshop, Topman, Dorothy Perkins, Mitre Sports, Berghaus, Kangaroos, Superdry, Warehouse, Clarks Shoes, Paul Smith, Mothercare, Hackett London, Lush, TM Lewin, River Island, Cath Kidston, Pepe Jeans London, Savile Row, Lyle & Scott,  Whyte & Mackay, Twinings, Diageo, Union Jack Tavern, Wolf & Fox, Chuck’s Grub, Waitrose and Yummy Organics.

Ahmad says more brands will expand in the Philippines soon. “We have a strong presence of British brands that is gonna grow.  My government, the UK, has said that we must triple exports to 1 trillion [pounds]. My mission here is to grow three times more than before.  That is a very strong target to have,” he says.

The UK is already the largest investor among European countries in the Philippines.  “The easy target that we have met is being the number one investor in the Philippines from the European Union. We have achieved that already,” he says.

“In terms of trade, we have a long way to go.  If we added it both ways, it [bilateral trade] adds up to $2 billion.  We have to make it $6 billion,” says Ahmad.

He says the UK embassy is working with the British Chamber of Commerce to help more companies navigate the Philippine market.  British investors are looking at infrastructure, public-private partnership projects, water, healthcare, education, information technology and defense sectors, he says.

The British Chamber of Commerce is arranging more trade missions to bring more British brands in the Philippines this year to look at opportunities, given the country’s improving economy.

“What we are seeing is that the government has more money.  The infrastructure projects are now speeding up, after a difficult start.  We are seeing people consuming more, spending money more, not just in houses and cars, but also in their lifestyle,” Ahmad says.

Ahmad says Filipinos can afford to buy British brands.  “It [local market] has been ready for quite some time.  That’s why we have been very successful here.  If you go back, they [British companies] have been here for a long time and they are expanding still.  New ones are coming onboard.  What Costa Coffee does is something different.  It is in food and beverage segment, which has much more to offer,” he says.

Costa Coffee opened its first outlet at Eastwood Citywalk 1 in Libis, Quezon City in June and plans to open three more branches this year at Tera Towers in Fort Bonifacio, E. Rodriguez Jr. Ave. in Quezon City and Robinsons Antipolo in Rizal.

“We plan to open 70 Costa Coffee branches in the Philippines over the next five years,” says Costa Coffee Philippines general manager Corinne Milagan, who heads a new unit of Robinsons Retail Holdings Inc. to guide the expansion of the Costa brand in the country.

Among those who attended the opening of the Costa Coffee branch at Robinsons Place Manila are Ahmad, Milagan, Robinsons Retail Holdings president and chief operating officer Robina Gokongwei-Pe, Costa Coffee International managing director Chris Rogers, Robinsons Land Corp. president and chief operating officer Frederick Go and Costa Coffee franchise manager for Southeast Asia and India Matt Kenley.

RRHI formed a new company called Robinsons Gourmet Food and Beverage Inc. to operate the Costa Coffee chain in the country. Robinsons Gourmet teamed up with Whitbread Plc. of the United Kingdom to bring the British coffee brand to the Philippines.

“The Philippines has fantastic opportunity for the Costa brand.  It brings something different to the market. A different coffee, a different environment and a great people.  And it brings a little taste of London to the Philippines,” says Rogers.

“We have been looking forward to the next 20 to 30 years. The Philippines is an exciting place to be, because of the potential growth.  The economy is growing strongly. The consumer population is growing. There are good dynamics,” says Rogers, who joined Whitbread eight years ago.

Rogers has been leading the international expansion of the Costa Coffee brand since July 2012.

Robinsons Retail plans to open 70 Costa Coffee stores in the Philippines over the next five years, with an average cost of P10 million per outlet.

Rogers says Costa Coffee has found its niche in the competitive coffee market.  “Our difference is our coffee.  We have the Mocha Italian blend.  We are very particular with the beans we choose–high-quality beans with a particular taste. The environment is also very different,” he says.

Milagan says the Philippine coffee market is now prepared for a British brand.  She says coffee lovers, including British expatriates, were lining up hours prior to the opening of the Costa Coffee branch at Robinsons Place Manila on July 31.

“The [coffee] market is not yet saturated. The Philippine market has matured in terms of  food and drinking preference. We are graduating now from instant coffee and we are now shifting to coffee made in a hand crafted way,” says Milagan.

Milagan says “the Filipino taste has become discriminating, as they travel abroad.”

Costa Coffee was founded by Italian immigrants Sergio and Bruno Costa in 1971 in Lambeth, London. The Costa brothers were known for creating their unique blend of coffee, a combination of Arabica and Robusta beans. They called it Mocha Italia, a blend that is a closely guarded secret to this day.

The brand was acquired by Whitbread Plc. in 1995.  The UK firm continues to serve the original Mocha Italia recipe, which is slowly roasted in the Old Paradise Street Roastery in London.

Milagan says Costa coffees are all handcrafted and espresso-based.

Costa Coffee now has 3,000 stores in more than 30 countries. Costa employs Master Genarro Peliccia as the official coffee master who ensures that the taste remains consistent to the original blend.

Gokongwei-Pe says Costa Coffee is the second British brand brought to the Philippines by Robinsons Retail, the first being the fashion brand Topshop.  She says her company will bring more foreign brands, depending on the performance of Costa Coffee.

“We have to make sure this works first,” she says, adding that the outlook for the Costa brand in the Philippines is promising.

“I believe in good luck.  I believe in good vibrations,” she says.