How This Businessman Managed to Turn a Profit Amid the Pandemic
Businessman and TV and film director Lester Pimentel Ong was broke and out of a job when the Asian Financial Crisis hit the Philippines in 1997. That’s when he decided to build his empire. Now, he owns 20 restaurants and 200 food stores nationwide. He is the owner of the Binondo Food Group, which is the parent company of Rice in a Box, Luna J, Kyu Kyu Ramen, and the franchises of Wangfu Chinese Café from Singapore.
Now, 20 years after founding his food empire when the world’s economy collapsed, he finds himself in an all too familiar situation, but worse. The COVID-19 pandemic devastated businesses across the world and among the hardest hit is the restaurant industry.
“Parang tumigil yung mundo pagdating ng pandemic,” said Ong, describing how the disease almost killed his businesses. To make things even worse, ABS-CBN also shut down, halting all his projects with the network.
“I’m a TV and film director. I also manage a lot of action directors and stuntmen. This business also disappeared because ABS-CBN stopped operations. Natigil lahat ng stores, natigil pa lahat ng projects.”
“Naisip ko nga, after 20 years of working so hard, akala namin naka-establish na kami ng matibay na fundamentals and we were on our way to bigger things, and then this thing happened.”
“This could be the end of us. We will be obliterated if we didn’t do anything.”
During the first weeks of the lockdown, Ong could hardly get any sleep. He was worried not only for his family, but also for his employees, who are more than 1,000 nationwide. The sudden closure of his restaurants and stores left millions of pesos’ worth of stocked goods in their inventory.
“Other than you don’t have income coming in, there was a big problem with inventories because our inventories are perishable. Pag nasira iyan at inabot ng expiry date, we would lose millions,” said Ong.
When the ECQ happened and the stores closed down, Ong truly felt a fear that he has never felt in decades.
"Naramdaman ko. Talagang naramdaman ko yung possibility na this could be the end of us. We will be obliterated if we didn’t do anything. Yung pinaghirapan namin nang 20 years, matatapos siya ngayong krisis kung hindi kami kikilos at mag-iisip ng paraan."
How Ong Solved the Problem of Perishable Goods
That’s when he decided to put his mind to work and keep the businesses afloat without laying off a single employee. It took a lot of inventiveness and sacrifice.
First, he had to solve the problem of his perishable goods. They needed to get their goods moving before they reached the expiration date or else they will lose millions of pesos. It was a race against time and an impossible gamble, but he was able to do it.
Ong and his team came up with a strategy to hit several birds with one stone.
“We created a donation campaign for the frontliners. We were able to generate donations from people. We sell the food below cost to the donors and gave them to frontliners,” he said. Ong was able to retain all his employees, provide relief for frontliners, and save their goods from expiring.
The next problem he had to solve was the mobility of his more than 1,000 employees.
“What we did is we asked for volunteers from our workforce who are willing to come to work, and many of them were willing. Many of them walked long distances or rode bicycles just to help us keep some stores running,” said Ong.
Ong is also thankful for his corporate employees who took on blue-collar jobs at the stores.
“Our team of accountants even went to the stores to become phone operators and take orders! Our chefs became riders who would deliver food to customers.”
“In 2020, your goal is to survive.”
His tech-savvy marketing team repurposed the social media pages of the businesses and turned them into order-taking platforms. The research and development team came up with a way to create a ramen kit for Kyu Kyu Ramen that is now available for takeout.
These strategies and the sacrifices of all the employees are keeping the business and their jobs alive.
Ong also thought about the situation of hundreds of his employees who are willing to go to work but couldn’t find rides. That’s when he tasked his fleet of truck drivers to transport people instead of supplies.
How Ong Kept His Employees Despite a Reduced Income
Ong had experienced the hardships of struggling because of being broke and jobless during the 1997 Asian Financial Crisis. He does not want that to happen to his employees.
“Right now, no layoffs but we are working on a reduced workforce. What we are doing is giving them rotations. Instead of firing every one of them, we give them three- to four-day workweek. On the corporate side, we work from home,” said Ong.
“Ang masakit doon, reduced talaga yung income ng lahat. Reduced ang income ng employees, pero reduced din ang income ng company. Mahirap, pero ang importante kasi ngayon, gaya ng sinabi ni Jack Ma, in 2020, your goal is to survive."
Another good thing that helped Ong’s business stay afloat is reduced rentals.
“We are very thankful to Robinsons, Ayala Malls, SM, and many of our landlords because, during the ECQ, they didn’t charge. And during the MECQ, they are charging only five percent of the gross sales,” said Ong.
“Sabi nila, for the next three months, ganyan tayo. Pinababayaan nila kami makabawi, tinutulungan talaga nila kami makabangon.”
How Ong Sees the Future of the Restaurant Industry
The new normal will mean fewer people eating out for the next 12 months, according to Ong. Restaurants that will survive are those that can adapt and deliver takeout food.
“During the ECQ, we managed to sell quite well relatively. We generated attention on social media. Post-ECQ, people would be dining more at home. In the past, delivery was something we didn’t want to pursue. But now, we are forced to do it. That’s the new normal, and will be the case for the next year or more.”
Why There Is Still Hope for the Restaurant Business
Ong admits that despite the innovations, strategies, and sacrifices that he and his employees made, there is still a sense of uncertainty in the business, but there is hope.
“Maraming pinagdaanan… after three months, we are on a survival mode. More than half of our stores are open,” said Ong.
“Sales is still down by 60 percent, but the good thing is the cost of operations is also down by that much, so we are still making a little bit of profit. Kumikita na kami ngayon! ...We know we are not out of the woods, but we will make it given enough time.”
“Ang message ko lang siguro sa mga fellow entrepreneur, imporante lang ngayon talaga, we survive this crisis. There’s still a silver lining in this situation,” said Ong.
“Ang take ko lang dito, mayroon pa ring positive things na nangyayari, hindi lahat negative. Ang importante lang talaga, mag-survive, magtipid muna, at mas maging conservative sa mga diskarte natin at lumabas sa ating mga comfort zone.”
Lester Pimentel Ong