A leading food magazine recently featured Reyes Barbecue as one of its 50 Best in food products, tools, people, books and ideas.
Today, Reyes Barbecue has over 40 stores, both company owned and franchised. But did you know that Reyes Barbecue’s first store was opened at SM North Edsa and that was the “laboratory” of Reyes Barbecue founder Frank Reyes, where he developed his innovations that eventually grew his business?
The story of Reyes Barbecue and SM has many inspiring lessons for aspiring entrepreneurs.
The story started back in 1984, the year SM North Edsa opened. Frank Reyes was then managing Patio Engracia, a family business. Patio Engracia was one of the original concepts in the newly opened SM North Edsa food court. After seven years of managing a food court business, Frank Reyes resigned and set up two food court franchises on his own. In 1992, Patio Engracia management replaced the brand in the SM North Edsa food court with Aristocrat, and in 1996, the business was turned over to Reyes, who by that time had developed a sound business model for food court brands. Frank improved the operations and steered the Aristocrat branch at SM North Edsa food court to sustained sales and profitability by focusing on quality and customer service. Business was very good from 1996 to 1999.
By the year 2000, the full impact of the Asian financial crisis had been felt in the Philippine business environment. The years 2000 to 2002 were difficult for the SM North Edsa branch, as market demand was waning and the business was struggling, barely breaking even. By 2002, Frank’s Aristocrat franchise term at SM had expired and was not renewed.
It seemed that everything was caving in. But as with many success stories, crisis brings out the best in everyone — it was these crisis years that unleashed the seeds of innovation in Frank’s mind. It was during this time that, with the support of the SM North Edsa food court management which believed in Frank took a chance on his new concept. SM became the “lab” where Reyes Barbecue was born.
In August 2003, Reyes launched his new concept, one he’d nurtured for 20 years — a high-quality barbecue-focused brand with innovative taste, flavor and presentation. Reyes Barbecue was born at SM North Edsa food court!
As with any new business, the new brand struggled — sales declined by 50 percent when the store switched from Aristocrat to Reyes Barbecue. With lower demand, the branch struggled with operational issues like spoilage (with all his viands on display, the store had to throw away about half of its displayed food every day), quality (pork barbecue tends to harden if displayed too long), and serving time (traditional skewered chicken barbecue took too long to prepare in store).
But the excitement of his new “baby” inspired Frank to nurture the business. And the SM food court management team continued to support his innovations. The first few months of Reyes Barbecue saw Frank experimenting with the removal of all food displays and replacing them with new merchandising ideas; it also saw Frank inventing his unique skewering and meat layering style for pork barbecue; and lastly it saw Frank executing his most important innovation — Reyes Barbecue boneless chicken, which is the company’s flagship product today! All these innovations were the building blocks for future Reyes Barbecue branches.
It should be mentioned that when Frank was faced with lower sales for a struggling new brand, he remembered what his good friend, Louie Co, told him about Henry Sy, founder of the SM conglomerate. Sy once told Louie Co about his philosophy of making money — “Ang piso ay piso.” ( “As long as you are making even just one peso from your business, you should continue it — there is potential to make more.”) This gave Frank the encouragement to continue with business improvements at his SM North Edsa branch.
Sure enough, several months later the sales of his Reyes Barbecue store increased, reached profitability, and the brand continued to grow. It gained repeat customers, and positive acceptance of its products led to strong word-of-mouth advertising, franchise applications and more store openings in other locations.
Frank Reyes will always be grateful to the support that SM North Edsa food court extended to him from the outset. Thanks to this valuable “food lab,” the brand prospered and there is now a chain of branches for all barbecue-loving Filipinos to enjoy.