Financial Adviser: 5 Business Lessons Everyone Can Learn Fruitas Holdings Founder Lester Yu

The king of fruit shakes has a few lessons to share.

Lester Yu was only 24 years old when he resigned from his job as a local bank branch manager to pursue his dream of launching his own business startup.

Yu put up his pearl shake drink business called Lush Coolers, which he quickly grew to 75 outlets in less than three years. But as soon as the trend faded, sales went downhill, which forced Yu to close all his outlets in one year.

Despite the devastating failure, Yu refused to give up. He learned one very important lesson that for any business to succeed, it needs to have a durable product that can stand the test of time.

During that time, Yu observed that the fruit shake business, which was dominated by two big brands, has been around for more than a decade because of the increasing health consciousness among young people.

Yu saw the opportunity of offering healthy drinks as the changing food habits and the shifting trend towards healthy way of living was expected the support the growth of fruit shake market in the future.

Sensing the opportunity to enter the market, Yu immediately put up his first outlet in SM Manila and simply called it Fruitas.

With product research and marketing innovation, Yu capitalized on the emerging trend towards healthy drinks, which allowed him to expand his outlets nationwide.

Today, 20 years later, Fruitas is now the biggest player in the fruit shake market with over 1,000 multi-branded food kiosk outlets.

In 2019, Yu listed Fruitas (PSE: FRUIT) in the Philippine Stock Exchange with total market capitalization of P3.0 billion, making Fruitas the first food cart operator to become a publicly listed company in the country’s history.


This year, Yu also listed another company, bakery chain Balai ni Fruitas (PSE: BALAI) with a total market capitalization of P819 million.

How did Yu manage to grow Fruitas to become the most dominant player in the fruit shake industry despite presence of long-established competitors?

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


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1| Know how to find the right market

When you define your target market, you should focus your resources in a particular market segment where it has greatest potential to purchase your product.

Yu was struggling with his first outlet when he first opened in SM Manila because his product and pricing did not meet his target market.

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

2| Know how to persist and find solutions

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 strong person in the end.

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Yu was determined to persevere during periods of difficulties. He stayed positive by learning from his mistakes and being a firm believer in his business.

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

“At that time, we were growing very slow. We had to save money and kept putting back our earnings back to the company. If we were able to save some funds, we would invest it in a vehicle to service our stores.

“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

In order to succeed in business, you must develop a profitable business model that will enable you to improve your market position by expanding your customer base and enhancing your product quality.

In earlier years, Yu resorted to franchising to raise funding to help support and expand his business. He later realized that he needed to operate his own outlets too in order to sustain the business in the long-term.

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


“The nature of our product is not really franchisable. Just like any business, when you have franchisees, you have to deal with people probably with different agendas, different visions, and different objectives.

“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.

“Today, out of 1,000 outlets, only 20 percent are franchised and the rest are all company-owned. We are very choosy with selecting franchisees.”

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 you have a marketing road map, you will know how to position your brand to gain a competitive edge in the market.

Yu used to think that pricing your product cheaper against your competitors was one way to compete in the market, but he later realized that adding value to the product through branding is more effective.

“When I was starting, I did not have money for marketing,” he says. “The only strategy I knew then was to offer lower prices than my competitors. Our price was cheaper by more than 60 percent, I think, and I was lucky that my competitors did not respond to match our price.

“We tried to be more academic in our marketing approach. Aside from offering a lower price, we also located our outlets in areas where we don’t have competitors. And when the business was already earning, I tried to invest in getting endorsers to promote our brand.

“At first, I thought if it was worth it to hire celebrities to endorse a food cart but when I saw big successful companies getting endorsers, I thought that 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.

Yu was a newcomer in the fruit shake market when he introduced Fruitas but he was not intimidated by the competition. Instead, he focused on going the extra mile for his customers by innovating new products and adding value in all aspects of the business.

“Actually, in the beginning, I had some insecurities because my competitors were already there in the market for a long time, but I thought that I just needed to focus on my customers,” Yu says. “I didn’t mind the competition so much.

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

“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 a life that to me is success.”


Henry Ong, RFP, is an entrepreneur, financial planning advocate and business advisor. Email Henry for business advice [email protected] or follow him on Twitter @henryong888 

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