Lester Yu was no stranger to the beverage business when he started Fruitas, a fruit shake store in 2002. Back in the 1990s in his 20s, Yu ventured into what was then a fad, tapioca-based coolers. That business grew to 75 stores in a couple of years but also quickly faded away.
Beverage was not Yu’s first brush with business.
Growing up in Binondo, he would help tend his mother’s jewelry store. In grade 6, he sold encyclopedia and educational materials. In high school, he sold promotional materials. In college, he joined tiangges and mounted movie premiers. He and his friends also acquired a computer shop near their school in Dela Salle University which would later become Fruitas Holdings’ supplier.
After college, Yu set out on a career in banking and at 21 became the youngest bank branch manager. That was abruptly cut when the bank he was working for was sold.
Yu’s experience in the tapioca drink business in the late 1990s made him look for a business that is long lasting. When he saw that his competitors that were selling fruit-based shakes were still around after all his stores closed, he realized there is still much potential in the market for fruit shake, and that it is a more sustainable business.
Before Fruitas, however, Yu ventured into other businesses mainly trading. He sold mobile phone cards, gold, educational toys and kitchenware and native products.
All of those stints taught Yu the skills to talk to people, negotiate with clients, deal with customers and handle employees, skills that became handy when he put up Fruitas.
Reeling from his disappointing tapioca coolers venture, Yu founded Fruitas when he saw that fruit shakes were only prevalent in high-end markets, and in places like Makati.
“That is where we saw the opportunity,” he said.
It was the perfect time since fruit shakes at that time became a big part of Yu’s diet.
Yu’s first stall was in a mall in Manila. Back then, he would just buy whatever fruits were in season and come up with combinations of fruit shakes to sell to customers.
But Yu said Fruitas was not an instant success.
“For four years, Fruitas was struggling and it only had a handful of employees. When cash flow was tight, we would sell some of the stores,” he said. Yu would later buy back those stores.
The big break came when Filipinos started to embrace healthy lifestyle. It was also at this time when the economy started improving and the spending power of Filipinos was rising.
Fruitas introduced new brands early in the game while also focused on growing the number of stores.
The group now has over 970 stores all over the country and more than 20 brands in its portfolio. Two more brands will be launched soon.
It also introduced beverages in bottled format.
Yu also saw the opportunity presented by food parks. Le Village Lifestyle Park in E.
Rodriguez and Uno Cinquenta in Maguinhawa are no ordinary food parks. They not just offer a great ambiance and a variety of food and drink choices, they are also incubators of food concepts before they are launched or expanded.
The beverage business is still the lifeblood of Fruitas Holdings with about P1.2 billion in sales in 2018. Fruitas and Buko Loco brands are the biggest contributors.
For Yu, the food business holds so much promise because these are relatively new. Two of the food brands were acquired: De Original Jamaican Pattie Shop in 2015 and Sabroso Lechon in 2018.
Yu has grown the number of Sabroso Lechon stores from two to 17 stores in just over a year.
Yu considers two critical factors in acquisitions: synergy and scalabilty.
He describes his acquisition strategy as bite-sized.
“Big companies acquire to expand. Very few have capability and resources to acquire.
Equally few are companies that come up with their own concepts,” Yu said.
He added: “Our company has the best of both worlds. We come up with concepts that we have proven (and tested) and we acquire companies. Filipinos have a lot of ideas. It’s a question of execution and implementation. We move fast in this aspect.”
“For small companies, no one acquires in this scale. We started very early. (That is part of our strategy)… Risk taking… takes different skills,” Yu added.
On a personal level, Yu recently bought an art gallery both as a patron of the arts and as a businessman.
“I’m a businessman. When I acquire something, it should add value (to me and my business) not necessarily (in terms of) profit… (but) if it could help other people,” Yu added.
Fruitas Holdings supports over 30 scholars and employs differently-abled workers.
The company is also big on community engagement, supporting suppliers of commodities from fruits to hogs, raw materials and ingredients from all over the country.
Fruitas Holdings has three commissaries in Metro Manila and other support facilities spread across the Philippines to support its operations.
Its portfolio of brands are Fruitas Fresh from Babot’s Farm, Buko Loco, Buko ni Fruitas, De Original Jamaican Pattie Shop and Juice Bar, Johnn Lemon, Juice Avenue, Black Pearl, Friends Fries, The Mango Farm, 7,107 Halo Halo Islands, Shou Hand Pulled Noodles, and Sabroso Lechon.
Fruitas recently introduced Lucky Chan, a new food kiosk concept offering Filipino rice meals in bowls. In 2018, Fruitas started the provincial expansion of its hand-pulled noodles and Chinese delicacies concept, Shou.
Every year, Fruitas targets to open 150 to 200 stores, with 20 percent of them franchises.
For Yu, those are prudent targets because he is not about to stop, eyeing more acquisitions and the introduction of more brands.
“There is no limit. We do not rest on our laurels,” he said.
For those who want to start a business, Yu has a very simple advice: maintain integrity, be focused and learn how to sacrifice. For him, the entrepreneurial spirit should stay alive and innovation should be constant.
Above all, Yu said, one must strive for excellence, citing his own company.
“We are not a big company but we strive to do things right,” Yu added.
In 2018, Fruitas Holdings reported P1.58 billion in consolidated revenues, a 37-percent increase from the P1.15 billion revenue in 2017. Fruitas Holdings has added more than 150 stores since the end of 2017.
The company is looking at a full-year consolidated revenue of P2 billion in 2019.
Fruitas is on track to hit its 1000th store mark in the coming months.