Accroding to the big players in the food industry, Filipinos are adventurous on trying new things but the downside in that is that they are not so very loyal because they can just easily move to one brand to another.
According to Bernadette Lee, COO of casual dining chain operator Pancake House Inc, introducing a new food brand in the Philippines is not difficult because Filipinos as consumers are very easy to convince but can be hard to maintain because they are also fickle when it comes to brands.
“Filipinos are easy to convince mainly because of their exposure. As long as you’ve given a concept that gives them value for money and great experience, they’ll be with you,” Lee told reporters on the sidelines of Pancake House Group’s annual stockholders meeting on Friday, June 28.
“However, Filipinos hop from one concept to another so it’s easy to introduce but it’s not easy to maintain. It’s a very tiring thing to do. They’re open to new things but not very loyal,” she added.
One way of keeping their attention is by constantly adding new items to the menu or introducing promos.
“We always offer a new product every quarter. We don’t want the market to perceive us as being stale. We keep innovating. We do a lot of research, talk to consumers to see what the trends are,” said Lee.
According to Lee, the Filipino market is very attracted to consumer promotions, such as online deals from Groupon-like group discount sites.
Generation Y and IHOP
The Philippines is a predominantly young market with a medium age of 21 to 33. Pancake House Group CEO Martin Lorenzo describes this dominant market as Generation Y.
“The way I describe Gen Y is ‘now.’ Everything has to be now. Because if we don’t give it to you now, then ‘you are irrelevant, I’ll go somewhere else.’ That’s how it is,” he said.
This can present a challenge for F&B retailers such as Pancake House Inc, the group behind the casual dining restaurant of the same name, as well as Teriyaki Boy and Yellow Cab Pizza.
“Everything is in your smartphone, so we have to communicate to you a lot through your Internet and social media,” Lorenzo added.
One example Lorenzo cites where social media played a big role in boosting awareness of a brand was when the American pancake brand IHOP (formerly International House of Pancakes) opened its branch on Bonifacio High Street at the Fort in Taguig City last February.
“Our sales went up by 30% just because it increased awareness of pancakes. More people tweeted it,” said Lorenzo.
A growing affluent middle class and higher purchasing power has also led to a change in consumer tastes toward more unique and high-end brand concepts.
“It’s becoming more affordable for Filipinos to travel. Not just inbound but also outbound. Filipinos become more open to different cultures and different cuisines. They are more open to authentic flavors,” said Lee.
This move toward high-end outlets can be seen in the success of Maple, Pancake House’s high-end brand in its dining portfolio.
“Maple is doing excellent. We’ll probably open a 3rd one in Alabang to service the A+ market,” said Lorenzo.
“If Maple had a Japanese cousin we probably would come up with the a similar concept,” he added. Maple is seen to offer an alternative to the other brands in Pancake House portfolio, which at present includes American, Filipino, Japanese and French cuisine offerings, among others.
The growth of business process outsourcing (BPO) and thriving tourism destinations have also spurred this type of retail development and directed Pancake House’s growth path to cities outside of Manila.
“There are a lot of developments coming up not just within Metro Manila but moving towards the provincial outlets as well. We called them ‘new wave cities,’ which are cities that are starting to be urbanized because of the growth of BPO offices. We see a lot of movement and development in these areas. The way to go for our brands is to go with the developments so that means moving out of Metro Manila,” said Lee.