Serg’s Chocolates: a case in business risk-taking


By the SERDEF Media Bureau

Entrepreneurship is associated with taking risks in order to gain rewards in terms of material profit and personal fulfillment.

The risks abound and may faze the faint-hearted.  The dominant fear is, of course, the possibility failure plus its many consequences – losing one’s shirt, being mocked by friends and acquaintances, damage to one’s health, well-being and self-esteem.    The demands of the business can also be daunting as it entails hard work and 24/7 commitment.

There are also factors in the bigger economic environment hard to predict even by the most well-thought out business plan.  For example, the plunge of sugar prices in the world market wreaked havoc on the local sugar industry in the 1960s.  Of more recent vintage is the Asian Financial crisis of the 1990s which shook up Asian economies as their currencies took a blow and profitability of their businesses went down.

The case story of Serg’s Chocolates, which used to be a well-known and well-loved chocolate brand in the Philippines,  illustrates some of the risks entrepreneurs face especially from the macro environment.

Serg’s was firmly entrenched in the market from the sixties to the eighties.  It was successfully revived in the 1990s.  Today, however, it has all but faded not only from the store shelves but   also from public memory.

Mia Marcy explains the rise and fall and rise and fall again of the erstwhile thriving chocolate company in the article “Whatever Happened to Serg’s Chocolates.”

The confluence of disparate factors contributes towards the death of companies that one might assume were too big or too entrenched in the market, Marci says.  Serg’s Chocolates is one example.

Serg’s Chocolates was originally conceived in 1954 by Anton Goquilay as Serg’s Products Inc, in honor of his son, Sergio. “Almost as soon as they launched their brand in the fifties, they became that era’s darlings. Their candy bars were an instant best seller, able to go head-to-head with the international variants being sold in the country then. It stayed strong for the next two decades after its inception. In the eighties, however, things started to take a turn for the worse.”

At the height of socio-political and economic unrest during  the Marcos Administration, the Goquiolay family migrated to the United States. In the transition from the Marcos to the Aquino Administration, the company was absorbed by the government under the Asset Privatization program. Serg’s disappeared from store shelves all over the country.

In the intervening years that followed the Goquiolay family’s migration, the young boy that the company was named after grew up. After a stint as a professor in marketing in a US university, he found the courage to return to the Philippines in the early nineties and start over. His first move was to take back control of his family’s company. Sergio Goquiolay flew back to Manila to reclaim his family’s company, succeeding in putting Serg’s Chocolates back in the limelight.

With the reins of Serg’s Products Inc. back in his hands, Sergio Goquiolay gave the company a much-needed rebranding and started making chocolates again. In almost no time at all, the brand found its way back to store shelves and inside Filipino’s hearts. Even amidst tough competition from multinational companies, Serg’s clawed its way back into relevance. By the mid-nineties, the company was geared to expand its operations and ready to start exporting to neighboring Asian countries.

In 1997, the Asian financial crisis happened.  It plunged Serg’s into debt, despite consistently strong sales.  The company had taken on loans in dollars to finance its expansion, and suffered massive losses from the peso devaluation of the time. Sales were still good, but not nearly enough to pay back its loans. That, coupled with some labor disputes inside the Serg factory, plunged the company deeper into trouble.

With its numbers in the red, the company decided to cut its losses. In 2001, Serg’s Products Inc. filed for bankruptcy. That same year, Sergio Goquiolay passed away.

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