Philippine food giant, Jollibee Foods, has made a significant move in the coffee franchise industry by announcing the acquisition of a 70% stake in Compose Coffee, a major player in South Korean market. This strategic decision is set to reshape the landscape of the coffee industry, with Compose Coffee being the third-largest low-cost coffee brand in South Korea, boasting 1901 franchise stores as of the end of 2022.
Before the recent acquisition by Jollibee Foods, Compose Coffee's share structure featured a diverse ownership arrangement. As of the latest data available, the company's ownership was distributed among various stakeholders, with the majority held by the founder and chairman, Yang Jae-seok, who owned 100% of the shares.
Established in Busan in 2014, Compose Coffee has positioned itself as a key player in the market by rapidly expanding its store network, leveraging competitive pricing, and even appointing BTS member V as its brand ambassador in 2022. The company's growth has been impressive, reporting a revenue of ₩88.9 billion and an operating profit of ₩36.7 billion last year, marking a 20.5% and 47% increase, respectively, from the previous year.
Under the umbrella of its parent company, JM Coffee Group, Compose Coffee has been at the forefront of the competitive coffee industry in South Korea. JM Coffee Group, with its origins dating back to 1999 in Busan, has expanded its business from coffee machine sales to coffee bean production and distribution.
Jollibee Foods, a major player in the food industry with a market capitalization of around ₩960 billion ($695 million), has been actively expanding its presence in the coffee sector. By acquiring Compose Coffee for $238 million (approximately ₩330 billion), Jollibee aims to further strengthen its position in the coffee and tea market, expecting a 2% increase in Compose Coffee's revenue and a 34% increase in store numbers following the acquisition.
Source: edaily
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