By Miguel Hanz L. Antivola
BUSINESSES of all sizes should embrace corporate social responsibility (CSR) beyond profits, according to Filipino heritage fast-food chain Binalot Fiesta Foods, Inc., highlighting its internal benefits.
Employees and franchisees experience a profound sense of purpose as they actively contribute to the community, Rommel T. Juan, Binalot chief executive officer and founder, said in an interview with BusinessWorld.
“You don’t have to be a big company to have a corporate social responsibility program,” Mr. Juan said, inviting businesses of all scales to rethink their objectives beyond profitability with CSR.
“Our people, staff, and franchisees — they feel good knowing what they’re part of,” he said about the internal benefits of CSR.
“It’s not just all about money. We’re also about helping and developing communities.”
CSR is a business model that promotes the organization’s self-regulation through social consciousness and accountability.
The House of Representatives approved a bill on its third and final reading in May, encouraging social responsibility in the private corporate sector by providing them with fiscal benefits when they engage in CSR projects and programs in communities.
This measure aims to encourage the private sector’s active participation in fostering sustainable economic development and environmental protection in the Philippines, as per the proposed legislation.
Before implementing its CSR program, Binalot used to acquire banana leaves from wet markets, which resulted in additional costs for the business.
“At the onset, it proved to be more expensive actually because styropor is cheaper,” Mr. Juan said.
“Moreover, they even add weight because it was priced per kilogram. When we open it, there are rocks or the leaves were rotten. Sometimes the leaves inside get cooked,” he added.
When Typhoon Milenyo struck Luzon and wiped out Binalot’s produce in 2006, a decade after the restaurant’s launch, Mr. Juan and his founding team had to import banana leaves all the way from Iloilo.
This move drove business costs higher and prompted them to consider a more viable alternative in the long run.
Binalot’s CSR efforts commenced when the restaurant established a partnership with Rodney Uriel, a farmer in Nagcarlan, Laguna. After the typhoon’s devastation, Binalot began sourcing its banana leaves from him.
“It caught on in the community until around 30 mothers were already helping,” Mr. Juan said. “Up to now, we’re still supporting that community in Nagcarlan, Laguna. We call it the DAHON Program, but the people in the area call it Barangay Binalot.”
From there, the DAHON (Dangal At Hanapbuhay para sa Nayon) Program has provided farmers, women, and elders in the dedicated community an alternative source of income for planting, cutting, and sanitizing the leaves.
With this, Binalot pushes 27 years in business, also gaining recognition from the United Parcel Service (UPS) and Intel-Asian Institute of Management, among other local and international award-giving bodies.
HOW IT STARTEDBefore Binalot became a name in the quick-service restaurant industry, its roots are in delivering ‘all-time Pinoy favorites’ wrapped in banana leaf, particularly in the business districts of Metro Manila.
“At that time, everything was just siopao, mami, hotdog, and hamburger — those were the only fast food options,” Mr. Juan said.
“I said, ‘Let’s introduce a Filipino fast-food.’ This was in ’96,” he added.
Starting operations in the cheapest condominium in Makati and giving out hand-drawn flyers to neighboring buildings, Mr. Juan and his founding team took orders through via phone call and sold an adobo meal for P25, eventually increasing to P28 when the word got around.
“It was a hot item right away, the new kid on the block… The idea was so novel.”
“We were called ‘the darling of the delivery industry’ by delivery pages because we were delivering so much,” he said. “We were delivering around 500 meals a day.”
While Binalot took loans from family members and opened delivery stores, mall outlets, and kiosks around the metropolitan area, it began to grow eight years after it started franchising, according to Mr. Juan.
“We grew organically, so every year we’d open one. And with whatever money we make, we’d open another one. Very, very slow growth,” he said. “But when we started franchising, expansion sped up,” he said.
MANAGEMENTWith Binalot taking more growth opportunities, such as bank loans and putting up stores and a commissary, Mr. Juan noted that financial management became a key challenge for the business.
“It was very easy to lose track of the finances,” he said. “There was a time that it really caught up with us and we had to close some stores to also streamline the manpower.”
“You need effective partnership because there are things that you need to grow na kung kukulangin ka (that if you’re lacking), you have to know to fill it in.”
He also said, “If you don’t have the know-how, you get a consultant, or you have to learn yourself or [have] a partner who knows that.”
“If you don’t have the time, you cannot replicate yourself. You must hire the right people. That is what we did. That helped us a lot in our growth.”
LOCKDOWN ADJUSTMENTSWhen the COVID-19 pandemic lockdown started, Binalot incurred another set of challenges concerning rent and lowering their overhead expenses.
According to a 2021 survey conducted by senior economist Shigehiro Shinozaki and statistician Lakshman N. Rao for the Asian Development Bank, 73.1% of local enterprises were forced to halt their operations due to strict quarantine rules.
They immediately faced delays in the delivery of products and services, and a sharp drop in the domestic demand, the study said.
“The stores that had delivery still had some income, but you still have to pay rent and talk to the landlord,” Mr. Juan said. “What happened was we really had to scale down.”
“Our commissary used to be separated from our head office. We had to join both in one facility.”
“It taught us how to tighten our belts more, to have a leaner organization. Our overhead expenses really lowered, and it helped.”
Flexible payment plans helped continue operations at a smaller scale, credited to trustworthy and empathetic business partners, according to Mr. Juan.
“We are indebted to our suppliers who did not leave us, as well as the malls that helped us with our debts.”
“The bonds of business became stronger because of COVID,” he added.
GROWTHNow that the market is reopening and shifting to post-pandemic workflows and trends, Binalot is seeing an increase in franchisee applicants — what Mr. Juan compared to the roaring 1920s.
“A lot of people are interested in franchising right now. There are a lot of applicants today,” he said. “Revenge spending is happening.”
“The challenge is still giving the best franchise package and service to these applicants… supporting them all the way.”
Coupled with stiff competition, Binalot remains confident and steadfast in its unique position of serving “heritage meals in heritage packaging,” according to Mr. Juan.
Mr. Juan noted that social media market analytics help them develop new ideas for food products — trending food you would have to go to specific areas in the country for.
“Recently, it has been exciting because of social media,” he said. “It’s easier now to track down what is trending.”