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Juice queue day

Fruitas founder explains why fruit shake kiosk a hit
/ 04:00 AM November 18, 2019
Juice queue day

Fruitas founder and CEO Lester Yu

Lester Yu once capitalized on the popularity of the pearl shake drink business in the 1990s. It was a huge success that allowed Yu to quickly expand to 75 outlets in three years.

But as soon as the craze fizzled, sales went downhill and forced Yu to close all his outlets within 12 months.

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Despite the devastating failure, Yu refused to give up. He realized that for a business to be sustainable, he needed to sell a product that was based on trends, not fads.

At that time, consumer behavior was just starting to change toward healthier drinks. Sensing the opportunity to take advantage of this emerging growth, Yu put up his first fruit shake kiosk in SM Manila and called it Fruitas.

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Today, 18 years after Fruitas was born, Yu is the king of the fresh fruit drinks in the country with almost 1,000 company-owned, multibrand outlets.

Fruitas Holdings is set to become the first food cart operator to list on the Philippine Stock Exchange on Nov. 29 with a target market value of P4.3 billion.

Here are the five business lessons every start-up can learn from the founder of Fruitas Holdings, Lester Yu:

1. Know how to find the right market

When you define your target market, you focus your resources toward a particular market segment where it has the greatest potential.

“When we started our first outlet in SM Manila, we had a hard time,” Yu says. “Our sales were poor, and the business was not so profitable. And then I noticed that most of our competitors were concentrated in Makati and Ortigas. That was when I realized why our product was not marketable and we should sell to the higher-end markets.”

2. Know how to persist and find solutions

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There is a saying that your hardest times often lead to the greatest moments of your life. When you keep going, your toughest situations will build you to become a stronger person in the end.

Juice queue day

Fruitas-owned stores and kiosks now number 900.

“During the early years when my business was not making money, I once thought that I was in the wrong business,” Yu says. “But I did not have any choice. By circumstance, I had to stick to it and live with what we had. I had to believe in our product.”

“Later on, I decided to enter franchising to expand, but the truth was, we needed money to sustain the business.”

3. Know how to grow the business for the long term

To succeed in business, you must develop a scalable model that will enable you to expand your customer base and enhance your product quality.

“One of my biggest regrets in all my business decisions was when I started franchising,” Yu says. “I realized that my business model was not sustainable if you will only grow it by franchising.

“When the business was growing, I started buying back almost all of my franchisees. When we operated our own outlets, we did not only make bigger profits, but we were also able to control the quality of our products,” he adds.

4. Know how to get ahead of the competition

Creating a marketing strategy can help you achieve your specific objective and goals in business.

“When I was starting, I did not have money for marketing,” Yu says. “The only strategy I knew then was to offer a lower price than my competitors.”

“And when the business was already earning, I tried to invest in getting endorsers to promote our brand," he says. “I was thinking if it was worth it to hire celebrities to endorse a food cart, but when I saw big successful companies getting endorsers, I said they must be doing something right so I just copied what they did.”

5. Know how to add value to your customers

When you understand your customers and know what their needs are, you can innovate new products to ensure your continued growth and profitability.

“We realized back then that we needed to innovate new products under different brands to cater to specific markets. This was how we came up with Buko ni Frutas and later on, Juice Avenue. Today, we have at least 20 brands in all our outlets,” Yu says.

“Successful people never feel they are already successful,” he adds. “If you are able to use everything in your power to help people live a better life, that to me is success.”

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