Entrepreneur recalls challenges in starting coffee chain venture

Thursday, March 14, 2013

CEBUANO entrepreneur Steve Benitez urged aspiring young entrepreneurs to pursue their passion.

This, he said, is one of the best business practices he adopted.

He said his fondness for travel and coffee led him to establish Bo's Coffee, one of the country's fastest growing coffee chains today.

Speaking before the break-out session for Young Entrepreneurs Group in Asia-Pacific during the Confederation of Asia Pacific Chambers of Commerce and Industry (CACCI) conference yesterday, Benitez said his love for coffee started during his law school years. Coffee kept him awake while studying.

In his travels abroad, Benitez said, he looks forward to visiting coffee shops.
Inspired by his "coffee experience" abroad, Benitez thought of putting his own coffee chain so Cebuanos can get to taste coffees of various blends.

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Study

He studied coffee-making for two years and in 1996, he opened a coffee kiosk with six tables in Ayala Center Cebu.

Benitez said through his business, he wanted to showcase the country's coffee and develop the Filipino talents in the coffee industry.

But starting out the business was not easy. It took years for the business to grow.

He recalled he had a hard time inviting people to buy his coffee, which was priced at P15 to P25 during that time.

"I was giving it away for free for three months just to introduce it in the market," he said. "If it was purely for business, the shop would have closed after a few months. But since it was my passion, I never gave up," he said.

Funding

Benitez said that for six years he did not obtain a loan because the profit he earned was ploughed back to his business. He said it was only during the establishment of his flagship store that he sought funding.

He said it took him two years to expand to Manila because he wanted to strengthen the brand in Cebu first.

"The first eight stores were considered the fun stage of my journey but when I started going out of Cebu I became more serious in the business," he said.

Bo's Coffee now has 60 branches nationwide, 25 of which are franchised.

Benitez said another factor that helped him grow was putting in place the system before going full-blast with the expansion.

The company also adopted the latest technology to facilitate seamless branch transaction. Benitez made some innovations, such as the reinvention of his coffee outlets, to highlight Filipino traits.

Supply

Bo's Coffee gets its coffee beans from Cordillera, Benguet and Bukidnon.

Benitez, who is also a member of the Philippine Coffee Board, said they are now aggressive in enhancing the country's Arabica coffee to ensure a steady supply.

He said there is a gap in coffee production here with only 30,000 tons being produced this year against a 75,000-ton annual demand.

"We go around teaching the farmers techniques to enhance coffee production," he said.

Benitez is also confident that the upcoming Asean integration by 2015 would open windows for more trade opportunities in the coffee industry.

Laura del Rosario, undersecretary for Economic Diplomacy of the Department of Foreign Affairs, small and medium sized enterprises (SMEs) in the Philippines should be given priority given that they are the country’s biggest employment generator.

At present, the country's SMEs employ 60 percent of the workforce but only accounts 36 percent of the output. Del Rosario said if road infrastructure