In a move that is likely to shake the sphere of fried chicken and bubble tea, Jollibee Foods Corp said it has signed a deal to buy a 51% stake in bubble tea company Milkshop International (Milksha).
The deal is priced at US $ 12.8 million (US $ 17.3 million) and Jollibee plans to leverage the company to accelerate its global expansion plans.
The acquisition, which will be done through its subsidiary Jollibee Worldwide, will offer the fast food group “the opportunity to participate in this category of fast-growing beverages and, together with the founder of Milkshop, grow the Milksha brand worldwide “.
The bubble tea craze
In addition to being a crutch for many Singaporeans, the bubble tea business is also making money. Recent estimates have put the bubble tea industry at $ 3.39 billion in 2027.
Milkshop comes from the “Land of Bubble Tea”, Taiwan and Tainan. Founded in 2008, it operates specialty tea shops under the trade names Milkshop and Milksha.
It has more than 250 outlets, of which 231 are in Taiwan and the rest in Singapore, Hong Kong, Melbourne and Vancouver. (You’ll remember the frenzy and snake tails when Milksha announced her debut in Singapore.)
Milkshop could even be one of those pandemic-proof businesses. Its system-wide sales rose 12 percent to $ 74.7 million last year despite the pandemic and are generating modest net revenues, Jollibee said in a statement.
Jollibee increases global expansion plans
These reasons must have made Jollibee’s decision easy to take a stake in Milkshop. As one of the cult and favorite brands of fried chicken, Jollibee is known for its crunchy fried chicken and iconic sweet spaghetti.
The group has been looking no further expansion abroad and the opportunities created by Covid-19 as it recovers from historic losses that are also driven by the pandemic, its CEO Ernesto Tanmantiong had said in an interview in March.
“This gives Jollibee the opportunity to participate in this category of fast-growing beverages and, together with the founder of Milkshop, grow the Milksha brand globally,” the Manila food chain said in a statement.
This is not Jollibee’s foray into world expansion; Jollibee had done it recently he bought his remaining partners in the background owner of the Michelin-starred dim sum restaurant, Tim Ho Wan.
Jollibee’s subsidiary, Jollibee Worldwide, bought the remaining 15% owned by other investors from Titan Dining (the private equity fund that owns the brand and stores Tim Ho Wan). This represents 71.56 million US dollars (52.7 million US dollars) of shares.
Jollibee and boba
As if your day of cheating in Jollibee couldn’t improve, now Milksha products are sold in some Jollibee units under a license 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 to its home country.
Shakey’s has launched R&B milk tea in addition to half of its Peri-Peri Charcoal Chicken pizza and chicken outlets, with dining and delivery options. It looks like bubble tea is about to take over the world, one pearl at a time.
Featured Image Credit: Milksha, Jollibee
Read also: Dollars and the feeling of running a bubble tea business in S’pore: is it really lucrative?