Gardenia enters unpackaged bread market with P300-million investment

GARDENIA Bakeries Philippines Inc. has entered the unpackaged bread market, via two fast-casual bread stores, with an initial investment of P300 million for back-end production and logistical support.

“For Gardenia, the biggest investment is in the commissary, which is about P200 million, and another P100 million that will include the logistics to support the stores,” GBPI President Simplicio Umali Jr. told reporters in a press conference.

Gardenia has launched the Big Smile Bread Station brand to cater to the community-baker segment and the Bakers Maison for the higher end, artisanal segment.

Already the market leader in the packaged bread market, Gardenia is aiming for a P2-billion sales target for Bread Station and at least P3 billion for Bakers Maison, both for the next five years.

”This artisanal bread market is expected to grow very rapidly, because of the efforts of new stores being opened by foreign brands, mostly entrants from franchisees abroad, and they will increase market penetration,” Umali noted.

Gardenia has franchised the Big Smile Bread Station and Bakers Maison brands to two initial franchisees—Bread Republic Inc. and Bakery Boutique, respectively—so that Gardenia will initially run the first few stores of both brands but will be owned and managed by their partner-companies.

“They’ve acquired the rights to the initial franchise for our stores. None of the stores will be owned by Gardenia,” Umali clarified.

Bread Republic and Bakers Boutique will invest on the construction of the actual stores, themselves.

For this year, 14 Big Smile Bread stations are expected to be put up, while two to five stores will be set up for Bakers Maison.

In five years, Big Smile is envisioned to have 1,000 stores in Luzon, and another 100 in Visayas-Mindanao.

For Bakers Maison, 100 stores are seen for Metro Manila, and another 100 for Visayas-Mindanao in five years.

To prop up this expansion, Gardenia will open Big Smile and Bakers Maison for subfranchising in 2016.

The Big Smile Bread Station will have an investment cost of P1.2 million, with the franchise fee pegged at P224,000 with a renewable franchise term of five years.

The high-end Bakers Maison has various formats—with an investment cost of P7 million to P9 million for the mall-based store and P13 million to P15 million for the legacy store.

Gardenia estimates the unpackaged bread market at P10.2 billion, with the high-end segment valued at P3.5 billion, while the community-baker segment is at P6.7 billion.

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Catherine Pillas

Catherine Pillas is a graduate of Ateneo De Manila University, major in European Studies - International Relations, with minor degrees in History and English. She's been a beat reporter for 3 years now, covering the Senate beat briefly before being designated as the trade and industry reporter for BusinessMirror.
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