Taste of Home
Jeff Lim started out fast and hasn't looked back, building a growing chain of markets catering to expatriate Filipinos
By MICHAEL STREMFEL
While many 24-year-olds are still trying to decide which career path to take, Jeff Lim is already well along on his and sprinting.
He has built Panorama City-based Island Pacific Supermarkets into a $10 million-plus business since founding it immediately after graduating from USC in 1999 with a bachelor's degree in accounting.
"I do everything young," says Lim. "I got married and had a kid when I was 21. We only live for so long, so do as much as you can."
Lim's mission is to provide his fellow Filipino immigrants with a taste of home Filipino-branded products, a broad array of obscure tropical fruits, spices and various other foods not carried by mainstream supermarkets.
He opened the first Island Pacific market in Panorama City in March 2000, and a second one in Vallejo last November. His third store is slated to open in Union City in April, with a fourth unit coming in July or August.
"It also will be in Northern California, but I can't say where yet because we're still negotiating a lease," he said of the fourth store. After that, Lim aims to open a distribution warehouse in the Oakland area to service all three Bay Area stores. Then it's on to West Covina, National City near San Diego and elsewhere.
"My goal is to have eight supermarkets open by 2005," he said. "We're ahead of schedule."
Lim's business model is essentially the same one Roger Chen used years ago to grow City of Industry-based 99 Ranch Market into a formidable ethnic grocery chain. (99 Ranch Market's primary focus is serving Taiwanese immigrants.) "Brilliant men don't copy ideas, they steal ideas and make them their own improve on them," says Lim.
"Ethnic groceries are very big, and a lot of major chains are awakening to it, but they're not sure how to do it," said Bill Bishop, president of Willard Bishop Consulting, a consulting firm in Barrington, Ill. "It's a big entrepreneurial opportunity for those who understand it. We see ethnic grocery sales in the U.S. growing at strong double-digit rates for the foreseeable future."
Lim knows his target customer well. He was born and lived in the Philippines until 1986, after which he joined his parents in the San Gabriel Valley city of Walnut. His father was a Filipino foods importer, and his mother ran a small Filipino market in West Covina.
"When 99 Ranch opened (in West Covina), it killed my mom's business," Lim said.
But now Lim is using his familiarity with the Filipino community to carve out his own successful niche in the booming ethnic grocery business.
What Lim copied from 99 Ranch Market works like this:
-Lease out a large retail center of 30,000 to 50,000 square feet.
-Set up an ethnic supermarket in about half the space.
-Subdivide and sublease the other half to small merchants catering to the same ethnic customer base a Filipino bakery, Filipino music/video store, etc. Charge premium sublease rents, more than enough to cover the entire center's lease payment, in exchange for giving merchants access to the customers the supermarket attracts.
-Persuade foreign investors back in your homeland to finance an aggressive expansion of the chain statewide, targeting communities with large populations of the particular ethnic customer group.
In Lim's case, the investors are organized under Sapphire Reserve LLC. Lim's liaison to them is a Woodland Hills attorney named Johnita Ejercito, who did not return phone calls seeking comment.
"When other people my age were going to venture capitalists for their dot-com businesses, I was going to my own venture capitalists for my supermarket business," Lim said. "The difference is, my supermarkets are still here."
Lim says that offshore investors are motivated by two inter-related factors. First, there are far fewer solid investment opportunities in the Philippines than in the United States. Second, by investing at least $100,000 in a U.S. company, the investors become eligible for an E-1 or E-2 visa.
"Emigration from the Philippines (to the U.S.) has been tightening up, especially after Sept. 11," Lim said. "Getting a U.S. visa is like winning the lottery."
The one planned market that Lim is especially looking forward to opening is the one targeted for West Covina, where his mother's small Filipino market was put out of business by 99 Ranch Market.
"I will dedicate that to my mom, definitely," he said.
Island Pacific Supermarkets
Year Founded: 1999
Core Business: Filipino-oriented groceries.
Revenues in 2000: $7.3 million
Revenues in 2001: $11.8 million
Employees in 2000: 52
Employees in 2001: 117
Goal: To build the Island Pacific chain to eight supermarkets by 2005.
Driving Force: Filipino immigrants' appetite for low priced produce, fresh seafood, branded products and other groceries well known and widely used in the Philippines but not available at mainstream U.S. supermarkets.
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