How Coffee Bean and Tea Leaf has stayed relevant in PH for 15 years

Karen Flores Layno, ABS-CBN News

Posted at Jun 13 2018 06:17 PM

MANILA – The American chain Coffee Bean and Tea Leaf (CBTL) is celebrating its 15th year in the Philippines.

And that is no small feat, considering the intense competition that has forced many food and beverage brands – both local and international – to shut their doors.

So how did they do it?

Paolo del Rosario, CBTL’s co-founder in the Philippines who also acts as vice president for marketing and business development, credits the brand’s success here to a mix of different factors – from consistently good products and service to hard work and proper timing.

During CBTL’s 15th anniversary party in Taguig, Del Rosario sat down with ABS-CBN News to share his thoughts about the initial challenge of introducing the brand to Filipinos, as well as keeping up with the constantly changing market.

Here are excerpts from our interview:

Q: How do you think the market has changed in the past 15 years in relation to your brand and products? 

A: I think the market has become a lot more sophisticated. I think people are pickier now. They are conscious about quality, even now all the way to sourcing – and these are a lot of stuff that we’ve been doing in the beginning. Now, there are a lot of the buzz words, like “farm-to-table” and all that. I think now that’s where the market’s headed, a lot of new players are coming in, and there’s also the third wave space. 

I think it’s good for us as an industry, as a whole, because it educates people. People now are looking for quality, and that’s something that we’re proud of as a company. We’re happy with the direction that the coffee market has gone in the last 15 years. 

Q: How has CBTL in the Philippines evolved to adjust to these changes?

A: Every year, we roll out at least four to five new products. What we do is actually exclusive to Asia – we plan for these things a year in advance and we basically pick what we think will work for the Philippines. There are a bunch of things rolled out at our head office, and then us, as management, we look at what we think we’ll roll out and what will be appreciated by the Filipino palate. 

For example, our current summer drinks are coconut-based. These are very tropical, very Filipino, and I think are accepted by the Filipino palate. We do these as much as we can. We try to innovate in all aspects, not just in the coffee but also in our teas, even in the way we build our stores. 

We also launched the first drive-thru of Coffee Bean and Tea Leaf in Asia... Just continuous innovation and just looking out for market trends, and making sure that we stay ahead of them.

Q: Can you describe the Filipino customers of CBTL? What are the flavors and products that they tend to look for?

A: The Philippine coffee-drinking market compared to other countries – for example, the US and Korea – we’re huge on the frozen beverages. That’s what the Filipinos love. It probably has to do with our climate.

Not to say that the espresso-based beverages don’t move, because that’s also a huge part of the business. But you can see that anything chocolate, Filipinos love. So we’ve done so many variations of it, from red velvet to cookies and cream for the ice blended lines, and we apply these to the tea lattes as well. 

And then when we have the liberty to come up with our own cake programs and all of that. So we try to come out with all those flavors and all the different aspects of the brand, not just for the beverages. But of course, the beverages are the core of our business, and we put a lot of emphasis on that.

Q: Not every brand can say that they’ve lasted 15 years in the Philippines. What do you think is it that you did right?

A: I think this segment in particular is a very tough segment. We’ve seen a lot of brands come and go. Only a few of us have continued on for 15 years, or at least a decade. 

I think it’s a bunch of different things. One is our commitment to quality – I keep talking about that, I always go back to that. That’s the core of who we are as a company. And when I say quality, we’re not just talking about our products. We’re talking about how we build our stores, our people that we hire. We continuously invest in our people and we make sure that our people have opportunities to grow in our company. They get a lot of training and guidance. 

And I think that when you take care of your people, it comes out in their work. It may sound so cliché, but it really does. As a customer, you’ll feel it when the company’s culture is solid. I think investing in our people has really helped us. 

A: It’s not just about the product. The product, obviously, you should not be shortchanging your customers. You’re selling them something that you’d know is worth what you’re selling it for. We’re confident about that… And I think it’s all of those things we do combined that’s allowed us to grow to where we are and allowed us to last for 15 years. 

Hopefully, the next 15 is even better than the first 15. It’s a different journey. It’s a very, very interesting and challenging industry that we belong in, but it’s a lot of fun.

Q: You’ve been here since Day 1. What have been your biggest challenges in operating CBTL in the Philippines?

A: I think Day 1 and the earlier challenges are, “Who’s Coffee Bean and Tea Leaf? Where are they from?” When we opened in Greenbelt 3, some of the bigger competition already had a 10-year headstart at 60 stores. There were other brands with more stores… So the challenge is introducing the brand.

When we came in, we wanted to position ourselves clearly as being different and being a brand of quality. We try to do it by building differently, by serving things differently.

Q: How exactly did you introduce the brand to Filipino consumers?

A: Back in the day, that (Internet) wasn’t huge yet… I think what helped us really was real estate, our location choices. We were very, very deliberate about how we opened our stores. We didn’t just open left and right. We’re not into franchising, it’s all company-owned… And the consistency [of our products], definitely.

Q: What’s next for CBTL here in the Philippines?

A: Hopefully we open more stores, we double our store count. Right now we have 130 in the entire Philippines. We’re in Luzon, Visayas, and Mindanao. In Luzon, we’re as far up as Pampanga and Bataan, so this year we’re planning to go further up north… We just want to make the brand accessible to as many Filipinos as possible.

Q: Any advice to Filipinos who are planning to bring in food and beverage brands from abroad?

A: It’s not easy. There’s so much competition, so make sure it’s a brand you truly believe in, it’s a brand you share values with. You have to be passionate about what you do. If you don’t love what you do, you’re not having fun at it, it’s very difficult.

I think the food industry gets a lot of press, but I think people think it’s much easier than it really is. It’s a very, very, very difficult industry to be in. It has so many moving parts, and so many things that can happen. It involves a lot of hard work.

I thought that by now we would have been able to shift gears and maybe cruise a little bit, but we find ourselves working harder than ever at 15 years. This road to 200 is different from zero to 100. You have a whole new set of challenges ahead of you.