Luico and Susan Co are on of the wealthiest people in the Philippines. Although they're well known to be the owners of Puregold, they also own several other companies which are dominating their own product categories.
They are the exclusive distributors of Johnny Walker, and Red Bull in the Philippines. Aside from that, they also apparently own the Keepers, the largest distributor of imported spirits in the Philippines with a massive 74 percent market share.
Learn about the origins of Puregold, how it all started, the companies they own, and the complete history of the brand.
You can read about it or watch my video about PureGold on my YouTube channel.
Although Lucio and Susan Co became popularly known as the owners of Puregold, they actually started out in the oil industry first when they launched Cosco Capital in 1988.
It’s actually really difficult to get any information about the billionaire couple because they’re notoriously known to be discreet about their personal lives.
But what we do know is that, at the height of the Asian Financial Crisis in 1997, while everything was falling apart, they saw an opportunity.
Markets were crashing, and the cost of basic goods began to rise, and so they figured, what if we opened a stand-alone supermarket that didn’t have huge markups. Maybe we can profit from this while being able to help people at the same time.
We all know that during a crisis, the only businesses that thrive are the ones that actually do serve primary needs, and as we’ve all experienced during this pandemic, supermarkets are absolutely essential.
And so on December 12, 1998, the first branch of Puregold opened along Shaw Boulevard in Mandaluyong City.
Fast-forward to today, as of November 2021, Puregold now has over 489 stores nationwide. But what exactly are they doing right?
Puregold’s main selling point is its relatively low prices. It has established itself as one of the go-to supermarkets for lower-income households, which is still makes up a pretty big chunk of the Philippines.
Noticing that a lot of independent sari-sari store owners buy their inventory from them, Puregold introduced the Tindahan ni Aling Puring program where store owners get access to bigger discounts, points, and even insurance coverage. This program I think is a great move from Puregold.
Another thing they’re doing right is being able to enter cities or towns that giants like SM and Robinsons may consider as “too small.”
Like if a town is still under a certain population level, or if a town doesn’t have the spending power that’s attractive enough for SM, obviously they won’t open a store there.
But since Puregold is positioned primarily for this market, they’re usually one of the first to pop up.
I’ve seen a comment that said that, once you see a Puregold open up in a rural town, it’s seen as a signal that things are leveling up, that thing are improving.
Puregold has established a strong brand for the CDE market, but they also did want to get a hold of higher-income households.
But then, they are also aware that it is much more difficult to reposition a brand because that could ruin the appeal to its existing audience.
And that leads us to the S&R acquisition
I actually made a video about S&R. It’s a deeper dive into the science behind the store layout of S&R, and how their pizza contributed to their membership growth. If you haven’t seen it yet, go check it out, the link is in the description.
S&R was launched in the Philippines in 2001.
S&R stands for Sol and Robert Price, the father and son duo that started the US-based Price Club with a couple other founders. This is massive company okay. It went public in 1980, and in 1993, they merged with Costco to create PriceCostco. Fun fact, Sam Walton, the founder of Walmart even gives credit to Sol Price as being the father of this industry, and told him that he learned so much from the business model that Sol Price pioneered.
Eventually, the younger Price, Robert Price started a separate company called Price Enterprises, or Price Smart.
Price Smart is basically just replicating everything that Costco is doing right in the US, and implementing that strategy in other countries, especially in South America, the Carribean, and Asia.
S&R was Price Smart’s version in the Philippines.
So they launched in 2001 with branches in Manila, eventually expanding to their first branch outside Manila which was in Mandaue, Cebu. [Four years later, in 2005, Price Smart sold its shares of S&R to its minority partner - Kareila Management Corp](https://www.gmanetwork.com/news/money/companies/264108/puregold-now-owns-wholesale-grocery-kareila/story/) - owned by the Lucio Co family.
In 2012, just a year after Puregold went public, they acquired Kariela and S&R for over 16.5 billion pesos.
Now why did they do this? It actually makes complete sense because S&R serves the AB market, the higher income group, and Puregold is targeted more towards lower income groups. So it really is a perfect fit. Two strong brands for each income group.
Puregold wasn’t done with their 2012 shopping spree just yet because in the same year, they spent roughly around P900 million to acquire all 19 branches of its smaller rival Parco supermarkets.
In 2014, Lucio entered the banking industry when it acquired a 37.67 stake in the Philippine Bank of Communications or PBCom. The deal was reportedly valued at around P5.98 billion pesos, and it brought Lucio Co’s stake to around 49.99% of PBCom.
I’m not actually that familiar with PBCom, they don’t have that many branches and they don’t seem to run any ads. But apparently, it’s been around since 1939.
It started out as the Chinese Bank of Communications since it was owned by foreign Chinese owners.
As of September 2021, PBCom ranks as the 19th biggest bank in the Philippines in terms of assets, and has over 93 branches all over the country.
In the same year, in 2014, Lucio Co brought Lawson’s to the Philippines. This move actually makes a lot of sense considering that they’re in the supermarket business. They’ve already got S&R for the AB market, Puregold for CDE, might as well complete it by having a player in the fast-rising convenience store game.
Lawson is one of the top three biggest convenience store brands in Japan. Just next to leader 7-Eleven, and Family Mart.
It’s been reported that Puregold put in around 500 million pesos in growing Lawson to compete with 7-Eleven, but in 2018, Puregold decided to pull the plug and sell its 70% stake back to its Japanese partner Lawson Inc.
One thing that I wasn’t aware of was how big of a player the Co family is in the liquor business.
They’re apparently the distributor in the Philippines for leading imported brands such as Johnny Walker, Jose Cuervo, Jim Beam, Jinro, Absolut, Bailey’s, Red Bull, and Perrier.
All are pretty much the leading brands in their categories.
So in 2013, they acquired Da Vinci Capital - a publicly listed company. Lucio Co’s plan was to turn this into a holding company for their future companies. The Co family’s wine and liquor businesses, namely: Montosco Inc, Meritus Prime Distributions Inc, and Premier Wine and Spirits, Inc. all then became subsidiaries under Da Vinci Capital, which was then renamed in 2021 into The Keepers Holdings.
The Keepers is currently the largest distributor of imported spirits in the Philippines with a commanding 74 percent market share based on volume and 66.9 percent based on retail sales value in 2020.
Now on top of all these companies that the Co family owns, is Cosco Capital, their main holding company.
Under Cosco, are their subsidiaries in the real estate industry. Their flagship company is Ellimac Prime Holdings, which builds community malls, and commercial retail properties.
Nation Realty, their mall development arm. They’re the ones who developed the 999 Shopping mall in Binondo, I’m sure you guys have seen or have been to that mall.
Fertuna Holdings, which, together with Ayala Land, built Harbor Point in the Subic Bay Freeport Zone.
As I said earlier, Lucio and Susan Co originally started out in the oil industry, and so under Cosco is Alcorn Petroleum and Minerals Corporation - they’re involved in the exploration and development in oil and mining, particularly in Palawan.
In specialty retail, they own Office Warehouse, a chain of stores focused on selling office and school supplies.
And of course, we have The Keepers Inc, in their liquor arm, and Puregold and S&R in retail.
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