Jollibee mulls over sale of minority stakes in Highlands Coffee

As reported by Reuters, Jollibee is considering the sale of a 10-15 per cent stake in Highlands Coffee. The Vietnamese coffee chain could be valued at over $800 million in the prospective sale.

Sources close to the matter said the transaction might result in the coffee chain's IPO, which Jollibee has been taking into consideration for several years.

Jollibee made a minor investment in Highlands Coffee a decade ago before taking a controlling interest in the company. Highlands Coffee established 37 stores in the three months that concluded on September 30 to achieve 562 locations in Vietnam. The brand significantly contributed to Jollibee's 47 per cent increase in overseas sales.

Pre-pandemic, Jollibee has lauded the potential of Vietnam. The country is expected to be a large consumer because of the population demographics and opportunities to grow.

With the expansion of international and local coffee chains, Vietnamese consumers have even more choices for coffee. Surpassing Starbucks, local franchise Highland Coffee is the leading coffee-shop chain in Vietnam based on earnings, according to market research firm Statista.

Since 2020, the pandemic and its related restrictions across Vietnam have led to a decrease in out-of-home coffee consumption. Consequently, several major coffee chains in the country have reported a much lower profit during this time. However, the Vietnamese coffee market is forecast to recover strongly along with the economy.

The Philippine’s biggest restaurant chain, Jollibee Foods Corporation has spent $350 million acquiring Coffee Bean & Tea Leaf, however, after the deal, its share fell 8 per cent, the largest drop in more than two years.

After an incident where a man with disabilities was mistaken for a lottery seller and was asked to leave a Highlands store - a unit of Jollibee Foods Corporation, netizens are calling for better awareness about the discrimination against the differently-abled. This is not the first time Jollibee affiliates face public backlash for discrimination.

Beverage chains are struggling under the pressure of increasing selling prices due to sky-high costs of fuel and raw materials.