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How a local brand competed with the big boys

Competing with a global brand made it better
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“Starbucks was the best thing that ever happened to us,” says Steve Benitez, president and CEO of Coffee Centrale Inc., the company behind Bo’s Coffee. Instead of bending over when the global giant entered the Philippine market in 1997, Bo’s Coffee improved its products, professionalized its management team, trained its people and has since remained focused on its own specialty coffee brand. From a single kiosk in 1996, it has expanded to a 48-store network of coffee shops, opened by Benitez one store at a time.

Drinking Coffee

Talking to Steve Benitez, one can’t understand how the antiquated notion that people from the province do not have what it takes to succeed in the big city began.

“It was all run by me,” says the president and CEO of Coffee Centrale Inc., the holding company for Bo’s Coffee and Bo’s Coffee Franchising Corp., now one of the country’s most popular locally grown chain of coffee shops. “It” was the six-table kiosk that was the first Bo’s Coffee shop. “That was the first store, and at one time, I did everything: I trained the servers, I bussed, I cashiered, I delivered, and I was the barista.”

Part of the first batch of winners of Entrepreneur Philippines’ Ten Outstanding Entrepreneurs, Benitez first graced the pages of the magazine in the November 2003 issue. Now, at almost 14 years since the first kiosk opened in Ayala Center in Cebu in 1996, the 44-year-old Cebuano enjoys a more active role in the creative side of the business. “Being the CEO, I now set the direction of the company, where we want to go, what kind of position we want to take it in the landscape, what we want to be five or ten years from now.”

That’s from the management side. “From the creative side, the visuals go through me, the ideas that go through research and development still go through me. I am also very much involved in marketing and anything that involves the creative side of the business.” Hands-on? Perhaps.

With 48 coffee shops by the end of the year, half of which are franchised, the growth of the Bo’s brand is obvious. But what’s behind all that growth the Cebu native is most proud of. “Now, we also have our own commissary that supplies our food such as cakes, pastries, and bread. We also have our distribution arm that supplies all of our proprietary products.” In terms of organization, “we now have a dynamic group of professionals running the show with me.” He cites an executive committee that runs the day-to-day operations of the business. “Decisions are made there, not just by me, but by a group of professionals. The organization is now more professionally set up.”

For the once Cebu-based business, moving into the Manila café scene, he admits, “was a challenge for us. But what we did was just build our brand one store at a time, training our people, and moving our products.” That, however, was the least of their problems.

A year after they opened, Seattle-based global coffee giant Starbucks entered the café scene in 1997, shaking up the competition. Benitez’s response, however, was a glass-half-full one. “What’s important is that we focused on ourselves. Whatever happens in the landscape, we observe, but we don’t just react to it, because we’re not a reactive company. We are a dynamic company.” So instead of creating something in response to the competition, Bo’s did the exact opposite: improving what they already had. “[The entrance of] Starbucks was the best thing that ever happened to us. It drove us to be better, to be global.”

While that last part is something Benitez and his team are looking into in the next five years, the focus is still on strengthening the brand in the local market. “As a result of what we’ve done for the past 14 years, I would like to believe that our position right now, as far as number of stores is concerned, we’re close to beat number two.” He adds, “Within the year, we should be number two. We are the Philippines’ own specialty coffee brand.” That’s something we can check up on after another 10 years.

Steve Benitez: The Coffee Maker
G&A Realty Building/Warehouse, 2303 Don Chino Roces Ave. Ext, Makati City 1200
(02) 894-5519

This article was originally published in the November 2010 issue of Entrepreneur Philippines.


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