Figaro Coffee Group ‘cautiously optimistic’ on growth plans

By Keren Concepcion G. Valmonte, Reporter 

Figaro Coffee Group, Inc. is “cautiously optimistic” about its growth plans as it prepares for a P1.77-billion initial public offering (IPO) in January.

“We’re targeting about 150 system-wide stores across all our brands by the end of next year — that’s the target, that’s our goal. We’re working towards it, but we are cautiously optimistic,” Figaro Chairman and Director Justin T. Liu told BusinessWorld in a virtual call on Monday.

“We are closely monitoring the pandemic situation, the Omicron variant, how the government will be responding, we’re also monitoring the consumer confidence,” he said.

The company is behind food brands such as Figaro Coffee, Angel’s Pizza, TFG Express, and Tien Ma’s Taiwanese Cuisine.

Figaro will be offering to the public 1.26 billion primary shares for up to P1.28 apiece, with an overallotment option comprising 126 million common shares.

The company will put a price tag on its IPO shares this Wednesday, Dec. 22.

Figaro deferred the timetable of its IPO, with an offer period now expected to run from Jan. 10 to 14. Meanwhile, it will list on the main board of the Philippine Stock Exchange on Jan. 24, 2022, instead of a New Year’s Eve debut.

Mr. Liu said the company is “not very worried” that market sentiment on recent public offerings might spill over to its own. The company expects its IPO “to be successful either way.”

“We see that the market understands our growth story and the prospectus shows the excellent performance and I’m sure a lot of people are familiar with our products, so we basically trust that the market will price it in the right manner,” Mr. Liu said.

Figaro plans to use net proceeds from the P1.77-billion IPO to put up new stores and renovate existing branches, commissary expansion, debt repayment, information technology infrastructure developments, as well as for potential acquisitions.

The company aims to open 35 new Angel’s Pizza stores within the next three years, more than the planned 18 TFG Express kiosks, six new Figaro Coffee shops, and two Tien Ma’s Taiwanese Cuisine restaurants combined.

“Angel’s Pizza really is our growth driver and the growth of Angel’s Pizza was accelerated during the pandemic because of lockdowns,” Mr. Liu said, adding that the brand benefited from its availability through delivery services.

He added: “The major factor for choosing to allot more capital to Angel’s [Pizza] really is the market demand. We see a lot of our customers [always] clamoring for us to open in their hometowns or where they live so we took this into consideration.”

Figaro launched 12 new Angel’s Pizza stores this year. The company aims to put up more stores in Metro Manila, as well as nearby provinces like Laguna, Bulacan, Cavite, and “potentially” major cities like Cebu.

Mr. Liu said the company also took into consideration the effects of the pandemic on dine-in businesses, noting that “coffee shops were really affected” because of restrictions.

Meanwhile, the TFG Express kiosks are “a play on the cloud kitchen model” located in gasoline stations. The current five outlets serve the best products from all of Figaro’s food brands.

“It costs lower to put one of those stores up and we can quickly ramp up the location base for delivery, which is connected to Grab Food so we’re able to play on the take out and also the delivery with multi-brands,” Mr. Liu said.

Figaro plans to work on its “future growth prospects,” with Mr. Liu noting that the company’s business model has been effective and resilient “whether in a pandemic or pre-pandemic times.”

One of Figaro’s advantages is having diversified sales channels, he said. The group has dine-in services, take-out and delivery systems, as well as streamlined e-commerce and logistics channels.

“Through this IPO we look to cement our brands and our company in the Philippine [food and beverage industry] for many more years to come,” Mr. Liu said.