Local fast-food giant Jollibee Foods Corp. (JFC) on Thursday said it is joining the milk tea bandwagon in the Philippines as its unit is buying a controlling ownership in the Taiwanese firm that owns the Milksha and Milkshop brand.
In its disclosure, Jollibee Worldwide Pte. Ltd. said it will purchase shares equivalent to a 51-percent ownership in Milkshop International Co. Ltd. for about $12.8 million (P647 million).
One of the co-founders of Milkshop will continue to retain the 49-percent ownership of Milkshop. Completion of this transaction is subject to certain closing conditions, and the final purchase price will be confirmed after closing, Jollibee said in its disclosure.
Milkshop was founded in Tainan City in Taiwan in 2008. It is primarily involved in the development, operations and franchising of specialty tea shops under the trade names Milkshop and Milksha, a popular Taiwanese bubble tea brand.
Milkshop produces and uses its milk from its own dairy ranch and their bubble is free from chemical additives, preservatives and caramel color. The brewing process varies for each kind of tea to achieve the expected aroma and flavors.
Milkshop has over 250 outlets, with 231 outlets in Taiwan, four in Hong Kong, two in Melbourne, two in Vancouver and 12 in Singapore.
Total systemwide sales for 2019 amounted to approximately $66.5 million. Last year, despite the pandemic, Milkshop generated systemwide sales of $74.7 million.
“Milkshop is generating modest net income and positive earnings before interest, taxes and depreciation,” the company said.
Bubble tea has been gaining popularity across markets. First introduced in Taiwan in 1987, the bubble tea has since grown into a multibillion-dollar industry worldwide.
“This gives JFC the opportunity to participate in this fast-growing beverage category and together with Milkshop’s Founder, grow the Milksha brand globally,” it said.
In June, Jollibee first announced that it will be bringing Milksha to the Philippines, which is one of the largest milk tea markets in Southeast Asia.
Jollibee and its subsidiaries, Fresh N’ Famous Foods Inc. and Mang Inasal Philippines Inc. now have the exclusive rights, through a licensing agreement with Milkshop, to sell and market products under the Milksha brand in their stores.
Milksha products will soon be sold in Chowking stores.