Top 10 Online Food Business Ideas in the Philippines

If you are an aspiring entrepreneur thinking about the best online food business ideas in the Philippines, you are on the right track!

The food retail business continues to thrive in the Philippines simply because there is a steady market of consumers who love to eat out or order in. You’ll be hard pressed to find a restaurant or fast food chain inside a mall with an available table from 12:00 pm to 2:00 pm. But looks can be deceiving.

Having been involved in the retail food business for ten years I can tell you this paradox can define the industry:

A restaurant that is packed to the rafters every day does not mean it is making money.

It may look like the cash register is ringing off the hook but you’ll be surprised how much is left after all deductions have been factored in. Food cost alone can be brutal. Many fast food restaurants average 50% to 60% food cost. This is because the Philippines is a net importer of raw materials. Proprietors are also hesitant to increase menu prices in a market that are price sensitive.

Thus, assuming you sell a hamburger for 100 Pesos, 50 to 60 pesos will go to your supplier, service crew and to pay for utilities. You have 40 pesos left. Do you think it will go to your bank account? No. Because you still have to pay taxes, employee benefits, maintenance, monthly dues, and rent.

Now you know why you cannot get many food choices inside a mall. The only ones that survive are those that have multiple branches because sales volume can offset depressingly low-profit margins.

If you want to have a career in the food retail industry, open your mind and understand that it’s not just about selling food inside a mall. Food Retail is an industry that is extensive and deep in scope and magnitude. You can retail your creations or your expertise. You do not have to be a trained chef or experienced cook to be in the food retail business.

And you do not have to set up a brick-and-mortar establishment.

In fact, the best recourse is to go online where the risks can be managed; conditions are ideal for maintaining quality and business modeling is more flexible.

Related: 33 Best Online Business Ideas in the Philippines 2016

There are many other options to consider when planning an online food-related business. Here are my top 10 online food business ideas in the Philippines.

1. Food Delivery Service

Let’s start with the obvious! If you have a deep-rooted passion for food and want to share your culinary talent to the market, get your baptism in food retail via a delivery service.

Costs are lower, but you need to capitalize the business. Initial investment should cover the e-commerce website and larger scale cooking equipment.

I estimate you would need 100,000 pesos including minor leasehold improvement to capitalize the business. But you should be able to recover your investment because your margins should be better. The delivery rider can be outsourced.

Here’s a good tip: if you want to maintain quality, prepare a fixed amount of food per day. This makes it easier to plan the production schedule.

How do you pull this off? Use your website!

For example, if you are selling burgers, your Home Page copy should read, “We only cook 100 burgers for lunch. First order, first served!” Then have a countdown feature which starts at “100”.

Every order that is confirmed reduces the number of available burgers until it reaches “0.”  When the target of 100 burgers has been reached, this message will appear on the Home Page, “Sorry! Burgers are SOLD OUT! Please try again tomorrow.”

This approach not only ensures food quality but creates demand for your product and will help you reach your quota.

2. Personal Chef

As a Personal Chef, you will cater to the higher income market. They will have little aversion to the cost of your food as long as it delivers on its promise of quality. Thus, your profit margins should be good.

Usually, the moneyed class looks for healthier food options because there are hardly any proprietors in the market. These are the consumers who want to follow diet protocols or nutrition plans strictly as prescribed by their Personal Trainers or nutritionists.

Over the last few years, we’ve seen successful online proprietors who offer specialized food items that follow low carbohydrate protocols such as “The South Beach Diet” and “Paleo.”

The menu on your website should include complete nutritional information on calorie content, portion sizes and accurate macronutrient breakdown. If you are targeting the health food market, include a blog page with rich content on exercise, general wellness, and nutrition.

3. Online Cooking School

If you are a trained professional chef, you can consider offering cooking lessons online. Here are just a few ideas you can use for your website:

• Specialized online instruction:
• One-on-one
• Classroom setting
• Instructional videos:
• How to prepare everyday dishes
• How to prepare fine-dining meals
• How to plan for a party
• How to cater for a large gathering
• Featured chef/ personality
• Archive of recipes
• Cooking tips and techniques
• Blogs on food related articles

You will need to hire a few chefs to handle the specialized online instruction if the number of enrollees has become difficult to manage. You can have different rates per package:

• One-on-one: $20 per hour
• Classroom (minimum of 5 students): $5 per hour

You can also put up an e-commerce page where you sell the products and equipment you use in the videos. You can also sell merchandise such as books, t-shirts, cooking planners, chef’s hats, aprons and other items that will help develop your brand.

4. Online Food Reviewer

Aren’t we all food critics by nature? Social media has given everyone a platform to post their opinions on the best and worst restaurants in the market. On my Facebook page, I regularly come across posts from friends who regularly share their best and worst food experiences.

I tend to patronize the recommendations of those who know how to word their experiences. A post that says “Best Shawarma in Manila” isn’t going to get me riled up.

But a post that says, “Best Shawarma I ever had! Generously packed with perfectly roasted beef that is sliced only upon order; the Shawarma is so big and juicy you need both hands and a pack of napkins! Best value for money at only 100 pesos!”

An online review is like a blog; it must have sizeable content of at least 1,600 words and accompanied with high-resolution images. Contrary to popular belief, you do not have to be a cook, chef or celebrity to be a food reviewer.

To become a credible food reviewer, you should have these qualities:

• Be a good writer. Don’t write in a technical manner. Instead, be conversational.
• Be honest and fair. Don’t be swayed by popular opinion.
• Be thorough. A good food review includes feedback on ambiance, cleanliness, quality of service, presentation, observation on crowd activity, accessibility and pricing, not just food quality.
• Be professional. Even if you didn’t like the experience, tone down the emotional rhetoric and stick to the issues. This is a food review, not a rant.

Finally, be incognito. If restaurants recognize you, they will take steps to make sure your experience would be great.

If your food blog gains traction, you can generate income from ads and other placements.

5. Catering Service

Catering is one of the most efficient ways of running a food service business:

• You have enough time to plan food production properly.
• You have enough time to review the logistics.
• You only buy what you need.
• The people you hire will be contracted only for the event.
• Everything that you will use for the event (tables, chairs, décor…) will be added on to your total charges.

The net profit margins in a catering service are good. And if you network properly, you can be booked for the entire year.

Your website must be colorful and enticing to visitors. Strategically position high resolution, professionally taken food shots perhaps arranged in a slide format. It would be a very good idea to upload videos of some of the events you have catered to and if possible, include video testimonials from clients.

You may also add an explainer video to inform prospective clients the process of planning a catered event. Add a blog page where you can share your experiences and expertise with readers; have “top 10 lists,” “how to” and “best of” articles. The blog page will give readers an opportunity to get to know you better.

As for pricing, you could include a “Basic Menu Set” with a few varieties just to keep you in line with others in the industry. But your web copy should have a call-to-action for site visitors to contact you for customized menu sets.

6. Online Bakery

We used to buy our bread from the supermarket but a few months ago we came across this small, unassuming bakery in our neighborhood. We were hungry and ordered a few pieces of “Pan de Coco” and “Spanish Bread.” These were easily the best we had ever tasted!

We asked the proprietor how often he would bake his products. He said he would only bake enough for the day because his products do not contain any preservatives to make them last longer. He candidly told us they will spoil faster than store-bought bread. I’m not a baker but all I can say he makes a really good product.

Nothing tastes better than home-made bread, cake, and pastries. Personally, commercially available bread has an inconsistent taste. All you need to do is look at the uneven coloring of the buns coming out of the production line. Some of the buns are light-colored because the sugars did not settle properly before baking.

The best cakes we’ve had were ordered online. As a luxury food item, cakes are more expensive. These online bakers do not generate volume and bake only upon order. Even when they are booked for the entire year, they have limited capacity to bake just enough cakes in the day without compromising the quality.

So they tend to be more expensive than store-bought cakes but so worth the price!

An online bakery will give the market access to freshly made bread, cakes, and pastries. You have to assure customers that your products are indeed freshly baked, and you can do this by informing them of the production date.

For bread items, you can do a running balance of inventory so customers will know how much more product is left in your store. But orders for cakes will have to be made in advance.

7. Cookie Gift Packs

One of the most popular gift packs involves cookies. Just like other baked goodies, home baked cookies are the best. Commercially packaged cookies contain many artificial ingredients to make the products last longer. It will not have the same fresh taste and texture as home-baked cookies.

All cookies should be pre-booked in your website to guarantee product freshness. Schedule your production based on existing capacity. You will have limited volume per day, but you can assure customers of quality. Pricing points should include packaging material.

Your cookies will cost more than store-bought, commercially-packaged products but if baked properly will be worth the premium price.

8. Food Preserves

One of the best food festivals I’ve been to is the Cordilleras Food Exposition, which is usually held at the Festival Supermall in Alabang. The expo features many great indigenous products from the Benguet provinces.

When I’m at the expo, I enjoy trying the new varieties of wine, coffee, and sausages. Outside “Café by the Ruins” in Baguio City, this is the only place where I can buy a kilo of “Kopi Luwak” or coffee made from beans fermented in the feces of the Civet Cat.

If you have not tried “Kopi Luwak” you are missing out on a fine cup of coffee! People find it strange that I would spend on coffee that has been excreted by a cat. All I will say is you don’t need any sweetener or creamer with “Kopi Luwak.” Its taste will stand on its own.

Offering these products year-round in Manila would be great. An e-commerce website that features and retails these fantastic locally made products would give these industries much-needed exposure in the local and international markets.

In North America, some retailers of “Kopi Luwak” sell a cup for US$300. I buy a kilo for 1,000 Pesos or US$21! Can you imagine the profit potential?

9. Frozen Food/Meat Delivery

This is a great online food business idea which offers convenience and safety to consumers.

I have been to many popular supermarkets and grocery stores where meat storage leaves a lot to be desired. The raw meat is left exposed to nearly room temperature, and some products show signs of advanced decomposition. And let us not forget the presence of flies!

If you can assure the temperature, quality, packaging standards, cleanliness and timeliness of delivery, you could save people money and time with your service.

Your website should include a virtual tour of your storage facilities and meat handling capabilities. Include a video on the science behind the insulated boxes you use for delivery to guarantee freshness and quality. Provide tips on how to tell if the meat is of good quality or not.

Among the frozen food you can offer are the following:

• Raw beef, chicken, pork, fish
• Crustaceans
• French fries, onion rings
• Fruits
• Vegetables
• Dimsum
• Ready-to-eat microwaveable food

You should be able to offer competitive pricing if the items are stored in freezer units at home. A good idea would be to present a comparative market price matrix between your items over those sold in supermarkets, groceries, and wet markets.

10. Unique/ Exotic Food Gift Items

There is a saying that if you want to know the culture of people, you should eat their food. But what if instead of going to another country, you brought the food here?

In my youth, my Dad would always bring in jars of pickled herring called “Roll Mops” from his regular trips to Denmark. I did not care much about fish and the pickled herring resembled a test tube alien from “The X-Files”.

But one night, my Mom opened a jar and asked me to try one. The herring was rolled up like sushi, and you used a toothpick to get it out. My Mom told me to eat everything whole. One herring and I were hooked! It was so good!

There are many interesting food items from all over the world. Off the top of my head are the following:

• Fugu eggs; “caviar” from Japan made from the deadly Fugu fish.
• Casu Marzu; rotten, worm-infested cheese from Sardinia.
• Kopi Luwak; coffee beans fermented from the feces of the Civet cat.
• Haggis; sheep innards stuffed inside the sheep’s stomach and simmered for 3 hours. A traditional dish from Scotland.
• Blood Sausage; a specialty of England, pork innards cooked with blood and stuffed in stomach casing.
• Rocky Mountain Oysters; a specialty in the United States. Only these aren’t oysters. These are bull testicles.
• Hakarl; fermented shark meat from Iceland

These food items can stay in good edible condition for a long time. Fugu eggs, Kopi Luwak, and Hakarl are tightly packed. Haggis, blood sausage, and Rocky Mountain oysters can be frozen. And Casu Marzu tastes better as it rots!

It would be great to have an online retailer who offers these goods and delivery to your home within 24 hours. Web copy should be well-written. It must be informational but crafted for the purpose of making a sale. Include an updated balance of your stocks to create a sense of urgency among prospective buyers.

These food items are exotic and should carry a premium price. You don’t need to stock a large inventory because the margins should be quite high.

Making the leap on starting an online food business

If you have decided to go for an online food business idea, please take a few minutes to review the following section which touches on what I believe you should consider as part of the planning process:

Conduct a comprehensive project study. A good idea is different from a viable idea. A project study is not a crystal ball, but it will give you valuable reference points to determine the strengths and weaknesses of your planned venture. It will also provide an indication of the profitability and projected payout period for the business.

Invest in your e-commerce website. Yes, there are downloadable, do-it-yourself templates and plug-ins are available to give your website functionality. But this is your business; your source of income. Don’t take chances that your website will not function properly. Contract a professional website designer who can do the following for your website:

• Mobile-responsive. Your website must be accessible from mobile devices.
• Fast download speed. The ideal download speed is 6 to 10 seconds.
• Accessible by multi-browsers. The Internet isn’t just Google, Yahoo or Bing. Have your website accessible by Safari, Firefox, and other browsers as well.
• Give your visitors an easy time in navigating your website.
• Great content. The first 6 seconds of a visitor’s time in your website is critical. You must grab his or her attention as soon as possible. Content is the key.

Conduct extensive online marketing. The biggest benefit of having an online business is that you can capitalize on the power of the Internet. You have access to a global market of 3.3 Billion people at the tap of a keypad or a click of the mouse. Online marketing is cost efficient and effective. Here are a few online marketing strategies for you to consider:

• SEO. Contract the services of an SEO professional to optimize your web pages. SEO works to have your website climb the search rankings.
• Social Media. To enhance your online presence, you must be active on social media. Find three social media networks and focus your strategies there. Contract the services of a Digital Marketer if you are unsure of your strategy.
• Blog. Did you know 61% of consumers had their decisions to purchase influenced by a blog? Do not hesitate to hire a content writer to generate compelling blogs.

Register your business. People often ask me why they should register their business if they work from home. Here are my answers:

• It’s business which means it is a living, breathing entity which must be legalized to transact, procure income from the paying public and pay taxes.
• The majority of suppliers will only deal with legalized entities. Manufacturers will not connect you with their accredited wholesalers unless you can provide corporate documentation. The same goes with wholesalers.
• If you are not a legal entity, you will have weak negotiating position with good, credible suppliers.
• You will not secure friendly credit or payment terms with suppliers.
• Customers may hesitate to pay for merchandise where the payee is not a company but a person.
• Registration professionalizes your business.

Related: How to Start a Small Food Business in the Philippines

These are just ten online food business ideas in the Philippines for you to consider. I’m sure you will have others that could be better than what I have written down. The important thing is to pursue your entrepreneurial dream and make it a reality!