How long-time friendship evolved into a $10m food venture for the heartlands

Coffee Hive started in a dingy 500sqft space but has since grown into a multi-brand company with overseas prospects.

On a typical lunch day in Singapore, your average office worker smack in the middle of the CBD would need to either endure the heat and crowds in a coffee shop or shell out $20 for a quick meal in a chic restaurant. That is until a group of four long-time friends came up with a concept of an airconditioned store with a kopi house setup that sells evergreen favourites. They named the store Coffee Hive, inspired by busy bees gathering in a comfortable place.

What started as an $80,000 investment and a single store has since grown into a $10m company with over 10 outlets across three different brands. In an interview with Singapore Business Review, Anthony Chan, one of Coffee Hive’s co-founders, shared how they carved out their business from a small, dingy 500sqft place in the old Afro Asia building.

“There was barely enough electrical and water supply to prepare our food and wash the dishes. But luckily, our customers loved our food and our customers increased everyday. By the first month, we had lines forming out the door. From then on, we knew that we had a winning formula and we looked to expand to other locations, overcoming our initial difficulties,” Chan said.

According to Chan, Coffee Hive stood out against other kopi houses because of the family-like environment inside the premises and their restaurant base. “We have built a restaurant base and we are no longer just a kopi place but an eatery where every dish has been carefully crafted to provide restaurant quality cuisine at affordable prices,” he said.

In the past year, Coffee Hive revamped its menu to include all sets with a drink to make it easier to order, and introduced new items every quarter such as Lemongrass Chicken, Assam Laksa, and Chili Crab Laksa.

Coffee Hive has also successfully expanded its customer base from an office crowd to people in the heartlands. “Our customers are mainly repeat customers, and they always ask us for special discounts. Therefore, we started our loyalty program to reward and to keep our loyal customers informed of our promotions,” Chan added.

Expanding to the heartlands also meant boosting their outlet count. “For each location we selected, we probably shortlisted over 10 locations over 6 months before we decided on the location,” Chan shared.

Building Wok Master

After the success of Coffee Hive’s concept, its co-founders added five new brands under their management, namely Kopi Korner, Kopi Hive, Coffee Bee, Wok Master, and Wok Palace. Wok Master, which is a contemporary take on the Hokkien concept of Zi Char, now has three outlets.

“Wok Master’s concept is to bring Zi Char to an air conditioned restaurant environment but we felt we could make Chinese food more interesting with a combination of western flavors and cooking techniques with better presentation,” Chan said.

Another of their offshoot brands, Wok Palace, has a store in Fusionopolis and was built as the higher end version of Wok Master. “It would both challenge our chefs as well as expose them to a different culinary level. From the business perspective, the location at Fusionopolis was strategic as the strong office crowd needed a place to host their visitors as well as company functions. It was an ideal place to launch our new brand,” Chan said.

Wok Palace offers creations such as Braised Beef Cheek with Organic Kale and Scallop Roll, which combine traditional Chinese and Western preparation techniques. “We also focus on presentation as the millennials are interested in how the food looks besides the taste,” Chan added.

Wok Master and Wok Palace are chef-heavy concepts and are still being expanded to include two to three outlets to be opened next year. “We are thankful that we have received good feedback and we have been invited to many locations but we are more cautious and selective on our outlet expansion.” Chan said.

Challenges and expansion plans

Since launching their first outlet, the founders said that they have learned a lot not only from their customers but also from their staff. “We have a guiding philosophy, that is ‘Treat people with heart.’ I always say that we are not in the food business, but we are in the people business. All our food is prepared by our people, and all our customers are served by our people,” Chan said.

Finding the correct staff was their main challenge in growing their brand. “When the government is trying to encourage businesses to be more manpower-lean, we managed to lessen the problem by focusing on providing a family environment for our staff. We have achieved a turnover rate much lower than the average.”

There is no better research than a feedback from a customer, he said, as they continually tweaked and tested their food to improve quality and taste. Chan and his partners are “confident” that they have the “winning formula” in expanding their franchise.

Currently, Coffee Hive’s founders are looking to spread out their markets and are scouring potential partners in Indonesia, the Philippines, and Vietnam. “In the next few years, we will build on the foundation of the concepts that we have to expand our footprint both locally and overseas.”

Another expansion focus is on their products. “We are packaging our products so that people can enjoy our food at any place and at any time. We are also able to let our products be available to overseas customers,” Chan said.
 

Visit Singapore Business Review website for other stories.

Your rating: MagBe