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How Magnolia Bakery ended up in Manila

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MAGNOLIA BAKERY's famous banana pudding will be available at M Bakery.

By Cathy Rose A. Garcia, Associate Editor

FROM A small corner in New York City’s West Village, Magnolia Bakery is expanding not just in the United States but around the world, including the Philippines.

Magnolia Bakery first opened in 1996, offering classic American baked goods. Its popularity soared when its cupcakes were featured on Sex and the City, and until now a “Carrie” cupcake — vanilla cake with pink buttercream and small daisy flower on top — remains on the menu.

Filipinos can soon try these cupcakes, as well as its best-selling banana pudding, when the local franchise M Bakery opens on August 22 in Bonifacio Global City.

It was a common love of banana pudding that prompted business partners Stewart Lee Ong and Candy Lu to bring Magnolia Bakery to the Philippines.

“Magnolia has always been one of my favorites. Whenever I go to New York, literally every day I would go and buy banana pudding, and then bring some home to my parents, siblings. It’s really something that I love, so I thought it would be good to bring it here. It also goes well with the Philippine culture since we end our meals with desserts and we celebrate occasions with cakes . . . It is a perfect match for Filipino culture,” Mr. Ong said in an interview on Aug. 8.




Initial talks with Magnolia Bakery started three years ago, after which Phil Jacobe Ventures Inc. was awarded the master franchise for Magnolia Bakery in the Philippines.

“I wouldn’t say it was hard, but it wasn’t easy. Magnolia Bakery is also very choosy and particular in choosing who to collaborate with in markets. It’s been a good and healthy relationship with them from the start,” the managing partner at Phil Jacobe Ventures said.

Erick Larios, director of franchise operations at Magnolia Bakery, said the US company was looking for franchise partners that share its vision, have experience in food and beverage industry, and a love and passion for the brand.

“One of the things that Stewart and his group really brought to the team is they’ve loved the brand before they were interested in the brand… We always look for a partner who has a good sense of the market and good understanding of what the (local) culture is coming to expect, to make sure it’s a good relationship and a good fit for us,” he told BusinessWorld.

The Wall Street Journal reported in May that Magnolia Bakery is targeting to add “as many as 200 franchisees across the US over the next five years.” It currently has 26 locations — nine in the United States and 17 overseas.

The Philippines will be its 18th international location, and its first in Southeast Asia.

Asked why the “Magnolia” was dropped for the bakery’s name here, Mr. Ong said they wanted to be “extra prudent” since some Filipinos may associate it with another Philippine brand with the same name.

“When we did our research, Magnolia Bakery is already popular among Filipinos, especially those who have tried it in New York . . . We felt using a single letter like M would trigger faster memory recall, as well as resonate well with Filipino millennials. Plus for Filipinos who may not be familiar with the Magnolia brand, we wanted to be extra prudent that they wouldn’t associate it with other Filipino entities,” he said.

PRICING
Unlike other bakeries that have commissaries, M Bakery makes all its products fresh-from-scratch at its kitchen on the store premises.

“Their concept is baking fresh in small batches in the bakery itself. When you bake them outright, everything is fresh and made from scratch . . . It entices customers to come in a taste the product. The aroma entices you to eat,” Ms. Lu, who is also a pastry chef, told BusinessWorld.

Ms. Lu had to go undergo training at Magnolia Bakery in New York City, while staff from New York are currently in Manila to supervise the store’s opening.

M Bakery offers a wide variety of cupcakes, cookies, cheesecakes, cakes and banana pudding.

“We went through a rigorous process of ingredient sourcing and testing. Magnolia Bakery wouldn’t allow that the taste is different from New York and other parts of the world. The banana pudding and cupcake that you have in New York will taste the same as the one in Metro Manila,” Mr. Ong said.

While the taste is the same, the prices are surprisingly a little lower. Classic cupcakes at M Bakery start at P120, while a Magnolia cupcake in the US costs around $3.95 (around P200). A large tub of banana pudding is priced roughly the same as the US at P375.

“We wanted to make sure we don’t compromise on the quality and ingredients. But we had to balance it to make sure the price is accessible for Filipinos. If we price it too high, not everyone will be able to afford it and try. It’s a good balancing act between quality and affordability,” Mr. Ong said.

Located in One Bonifacio High Street, M Bakery is expected to attract young urban professionals, moms, foodies and expats.

Mr. Ong said Bonifacio Global City is the “perfect” place to open the bakery.

“Our target market is yuppies and moms. There’s also a good expat community here, given there are international schools around and many multinationals. It’s a perfect place to set up the flagship store,” he said.

For Mr. Larios, Manila’s foodie culture is also a big factor why he believes M Bakery will be a success here.

“You can feel a trendy, ‘up-and-coming-ness’ to Manila, in the BGC area. I think this is a very good first location for us, the demographic. The products we offer, it’s a wide variety. We don’t just do cupcakes, but different categories that appeal to different taste profiles,” he said.

Even before M Bakery opens, Mr. Ong said they plan to open one or two more stores by next year.