Jollibee Foods Corporation
Ensure stable supply and price of raw materials
Jollibee Foods Corporation (JFC) runs the largest chain of fast food restaurants in the Philippines and is reliant on a steady supply of raw materials, such as vegetables, cereals and animal produce, at significant quantities and stable prices. However, the agricultural sector in the Philippines is particularly vulnerable to such extreme weather events as typhoons, and when extreme weather reduces crop yields, the price of produce inevitably spikes – exacerbated by middlemen who hike prices exorbitantly.
To mitigate this supply chain risk, in 2009 JFC began sourcing produce directly from smallholder farmers in addition to its traditional intermediary traders. JFC invested a significant amount into partnership building and training to organize the farmers into functioning cooperatives. Buying directly from the farmers has meant that when one area of the country is producing lower yields, JFC can buy from a less affected region. Product quality is assured and prices are more stable as the negotiation relationship is directly between JFC and the farmers.
By 2015, Jollibee had helped over 900 farming families in 27 cooperatives with an increase in income of 200-500%. One-fourth of all vegetable produce sourced by JFC is now purchased directly from the farmer cooperatives.
Home page image: REUTERS/Mike Blake