The country’s food and beverage landscape has seen the mercurial rise (and fall) of once-hyped “market changers”—pearl shakes, shawarmas, frozen yogurt, et al—but if there is one business model that has continuously withstood the test of time, it’s the coffee shop.
No bones about it: Filipinos love their coffee. It’s the reason why both small cafes and giant coffee chains continue to thrive across the country. “The local coffee industry is growing at a phenomenal pace,” shares Leopoldo de Leon, president of coffee solutions provider Allegro Beverage Corporation (ABC). “The fact is, the coffee shop has become ‘the third place’ now—you spend a lot of time in the office working, you spend time at home to sleep and relax, and then you hang out at the coffee shop. It has become an extension of your house,” he explains, adding that it’s one of the things driving his “chain accounts” to grow.
According to de Leon, one of the things that attract people to the coffee industry is that it is “very, very profitable.” For a typical food service outlet, the food cost of coffee is only at 10 to 15 percent. “When you go to a coffee shop, you pay P100 to P150 for coffee, and that only actually costs the shop P5 to P8. It contributes a lot to their profit margins,” he shares.
It doesn’t hurt that the product itself is very habit-forming, too. “Coffee is probably the only thing that’s habit-forming and addictive that’s legal. It’s a stimulant, it wakes you up and it keeps you going. It’s very popular—people have been drinking coffee for centuries; now, you’ll even see tea-drinking countries like Japan, Taiwan, Hong Kong and Australia shifting to coffee,” he informs.
In the Philippines, de Leon shares that businesses are bullish and positive about the coffee industry, and the economy as a whole. “All of a sudden there is this new big market that didn’t exist 10 years ago—the call center employees. These people earn at least P20,000 to P25,000, they can afford to buy their own condos now, and they can definitely afford to go to a coffee shop and pay P100 for a cup of coffee to perk up their day,” he says.
One of the country’s leaders in providing complete beverage solutions, Allegro Beverage Corporation is a one-stop shop for those who want to get into the coffee shop business. “We do everything—we help conceptualize it for them, we do the menu, the costing, training, we help source out suppliers, and help provide them with all the equipment needed,” de Leon informs, adding that his company is also the exclusive distributor of the finest espresso equipment, brewers, coffee beans, gourmet syrups and sauces, and teas. Among the brands ABC carries include Nuova Simonelli espresso equipment from Italy, Franke coffee systems from Switzerland, Expobar compact espresso machines from Spain, Hey Café coffee grinders, 1883 de Philibert Routin gourmet syrups and sauces from France, and a wide range of beans imported from across the globe.
Coffee, Meet Craftsmanship
It used to be that the Philippines was among the top exporters of coffee, but today, production is only at 20,000 metric tons. “Demand is at 70,000 MT,” informs de Leon. “We still have to import a lot, but the good news is the local coffee industry is trying to upgrade the quality of the beans. Hopefully, the Department of Agriculture and a lot of the farmers see the light because people now are actually looking for single origin coffees. And one of the best beans in the world is the Sagada coffee from the Cordilleras,” he shares.
According to de Leon, trends also point to Filipinos becoming more sophisticated about their coffee now. “Before it was just instant coffee, then it became 3-in-1, then brewed, and now people know more about the cup of coffee they consume. They know that it takes four things to make the perfect cup: the bean itself—the higher the altitude, the better; the machine; the grinder—it has to be freshly ground and freshly brewed; and the manner of the barista,” he shares.
As part of his drive to elevate the country’s coffee industry, de Leon also conceptualized the Philippine Grand Barista Cup six years ago. It’s a competition that pits the country’s top professional baristas representing coffee shops, cafes, hotels and restaurants in a setting wherein each of the contestants will be preparing three drinks: an espresso, a cappuccino, and a signature beverage. “We want to elevate the profession of being a barista. It’s one way for us to promote the growth, excellence and recognition of the barista profession in the Philippines,” he shares.
De Leon says that countries like Singapore, Japan and Hong Kong all have a thriving barista culture. “In Singapore, the baristas there hold latte art showdowns, coffee crawls, visit ‘third wave’ coffee shops or those who roast their own beans and get specialty beans from different parts of the world,” he shares, adding that the Philippine Grand Barista Cup is also one way to raise the Philippine flag in the world of specialty coffee. “We want the barista profession to become a celebrated profession here—same with today’s celebrity chefs. We want to raise the awareness that being a barista isn’t an easy profession—it’s an art and a science. You have to put your heart and passion into it,” he ends.