The first few things that come to your mind when you think of the Philippines are their beautiful beaches, Filipino hospitality, and their politeness. But the country is also blessed with some delicious local delights like Adobo, Lechon, and the “infamous” Balut. According to Statista, revenue for the food market in the Philippines is expected to grow annually by 7.07%, based on compound annual growth rates (CAGR) between 2023 and 2027.
So if you are planning to start a business in the Philippines, the food business can be one of the considerations. And since the retail food business in the Philippines will continue to thrive, this industry will likely be competitive. But if you’re still keen to learn more, we’ve come up with a list of the different types of food business that you can potentially start in the Philippines. Continue reading for more deets!
1. Food truck/Food Cart Business
Food carts are one of the most common types of food business in the Philippines. You can find them easily on the sidewalks of major cities like Palayan, Davao City, and Manilla. Food carts are popular because of their flexibility where you do not need to be situated at a fixed location, and it does not require a large capital investment to start one. Food that is normally served from food carts are usually quick bites like fish balls, sandwiches, and beverages.
Pros of a food truck/food cart business
- Easy Setup: You do not require a large headcount or rent a kitchen before you can start this business. All you need is to rent or own a truck or cart to kickstart.
- Freedom: The business is not confined to one locat ion so you can plan and map out your schedule on where your food truck will be based on traffic flow of different locations in different timings.
- Lower Expense: This business has a relatively low startup cost as compared to a brick and mortar restaurant business.
- Lesser Regulations: By not starting your food business in a building, you do not need to adhere to building regulations.
Cons of a food truck/food cart business
- Strategic Spot: As the food cart business is relatively popular in the Philippines and if you plan to sell your food in an area with high traffic, you’ll most likely need to compete with the following competitors for a prime spot.
- Limited Space: Being portable would also mean everything needs to be done within the truck/cart, including cooking, which also means limited space for storage. And as a result, your food supplies might not be enough to cater for all your customers during peak hours.
- Maintenance: Just like your regular vehicle, your food truck needs to go for regular maintenance especially if you are moving around multiple spots daily. Delaying maintenance can result in greater expense when it breaks down.
- Weather: If your food truck or cart business is situated outdoors, your food business might be impacted when the weather is not in your favour such as rain.
After weighing the pros and cons of the food truck or cart business, and if this business type still excites you, you can learn more about the food cart business in the Philippines from this article to understand better about this business.
2. Coffee Stand
Selling coffee is another popular choice since most Filipinos drink it. It is estimated that 8 out of 10 adults in the Philippines are drinking an average of 2.5 cups of coffee daily. So selling coffee is an excellent food business option as it has a high demand and there are three ways to sell coffee at your stand.
- Partner with a coffee supplier
- Brew your own coffee
- Sell packets of instant coffee
How you want to sell coffee is largely determined by your skill set and the approach you take. If you are leaning towards the creative side, brewing your own coffee and selling will be the obvious choice for you, where you can build your own coffee brand and following. On the other hand, if you do not have a vast knowledge about coffee but want to start a quick selling coffee business, selling packets of instant coffee can be a good start.
Pros of a coffee stand
- Cost of Coffee is Low: You can save more if you work with a coffee supplier to provide you with coffee beans.
- Low Wastage: Coffee beans can last a long time if you store them properly.
- Minimal Equipments: The most important equipment you need for your coffee business is the coffee machine. While it can be costly to invest in one, some coffee bean suppliers are willing to loan one.
- Diversification: There is no rigidness for the coffee stand business. You can diversify it by selling pastries and cakes.
Cons of a coffee stand
- Low Turnover: There is a chance your customers will sit at your coffee stand for a long period of time, especially if Wifi is available.
- Competition: Apart from independent coffee sellers, you will also be competing with global brands like Starbucks and Coffee Bean.
- Weather: If your coffee stand is outdoors like the food cart business, the weather can be a pivotal factor on foot traffic to your store.
3. Home-based Business (Home-Cooked Food)
As Filipinos are getting more health conscious with a survey showing that 56% of respondents are claiming to maintain a healthy diet and 99% have shown interest in adopting healthier eating habits, running your food business from home is another option considering that home-cooked meals are healthier than eating out.
So there is a potential that your food business may prosper if you can cater to this rising trend of health-conscious Filipinos with your home-cooked food.
Pros of running a home-based food business
- Low Cost: You can start your food business with minimal expenses since you can use your existing cooking equipment from home.
- No Physical Store Required: You can sell your home-cooked meals online, via social media platforms or through your online store.
Cons of running a home-based food business
- Trust: Establishing trust in your home-based food business might be a challenge as potential customers might feel sceptical to try it. So you will need to spend time and money to market your business to gain some initial traction.
- Distractions: Running a food business from home comes with distractions especially if you have kids, which can affect your productivity level.
- Changes to the Kitchen: Cooking for a small family group and cooking in bulk is totally different. So there is a chance that you need to make certain changes to your kitchen to accommodate this business.
4. Food Catering Business
The food catering business is another alternative to consider. As shared in our article about food catering business in the Philippines, event catering is expected to experience continuous growth in 2023. This business type is versatile in the sense that you can either start small by targeting mini events such as birthday parties, to larger events such as conferences.
Pros of starting a food catering business
- Lower startup costs: Like the food cart business, you do not really require a large pool of overheads and rental space to run your food catering business.
- Flexible working schedule: Unlike traditional food businesses like running a restaurant where you are required to operate at a fixed timing, catering business on the other hand, does not follow a rigid schedule.
Cons of starting a food catering business
- Responsibility: You are responsible for every aspect of your catering business, from preparing for the event in both food and setup, to being a business development in prospecting for clients.
- Long working hours: While this food business type provides you with the flexibility on the schedule, since you are responsible for almost everything, longer working hours are expected.
- Slow Start: Like every other food business that is new, it may take a while to build up the trust and pace in traffic, so there is a chance of deficit in the initial months.
5. Online Food Business
Another popular option is to take your food business online. With deliveries and takeouts becoming more popular ever since the COVID-19 pandemic that resulted in more people working from home, ordering food online has somewhat become a norm. Even if you are currently operating a restaurant, selling your food online can be an additional revenue stream for your business.
There are two popular ways to sell food online, you can list your digital storefront on a third party app like Grab or you can create an online store using an ecommerce builder like Shopboxo. Do read our guide on how to sell food online if you are planning to dabble into this business type.
Pros of online food business
- Convenience: Customers can order food directly online and have it delivered to their doorstep, without having to step out of their house at all.
- Weather: Unlike food cart and coffee stand business, weather does not affect the online food business. In fact, a rainy day might boost your sales because customers are likely to order food online instead of dining out.
Cons of online food business
- Longer Wait Time: Online food businesses that require delivery can result in longer waiting time since there are certain factors to consider in the delivery process such as traffic and weather.
- Higher Cost: If you are utilising a third party app to sell your food online, there are service fees associated with the platform, as well as booking fees. So the overall cost of having the food delivered will be higher than ordering it directly from a physical store.
6. Food Blog
Slightly different from the five food business types listed above, food blog does not provide food to customers, but instead, provides food guides and reviews for readers. So if you are a foodie and enjoy writing, this business type might be ideal for you.
Pros of a Food Blog
- Side Job: You can run a food blog without having to quit your main job.
- Low investment: Other than purchasing a custom domain and subscribing to a website builder or blogging platform, there are no other costs required.
Cons of a Food Blog
- Slow Profit: You need to build your brand and following before food businesses engage you to write content for a fee.
The food market in the Philippines is expected to grow at a steady rate in the coming years, making it a potential industry to consider for starting a business. Food trucks or carts and coffee stands are a few popular options due to their flexibility and low startup costs. If starting a food business is what interests you, always weigh the pros and cons of each business type before making a decision, and also conduct your research to understand the current market and competition.