/ Guide to disrupting food & beverage

1
What’s in this guide?
Introduction / 2
Old Challenges, New Solutions / 6
New Skills Needed to Succeed / 26
The Last Course / 29
Working Capital for F&B / 31
Help Wanted / 34
Tasty Tips from the Pros / 37

It is tough being a food and beverage player in Singapore these days.

If the new competitors popping up were not enough to give sleepless
nights, F&B businesses probably spend their days worrying about why
nobody is answering their staff wanted ads, or wondering when the
landlord is going to bump up the rent, again.

Introduction / 1
An Overview of the Singapore F&B scene
While most local SMEs suffer from these symptoms, those in the F&B sector have been
hit particularly hard due to their insatiable appetite for both front-end and backend staff
to support their operations, as well as the need for choice locations to attract traffic.
Despite these daunting obstacles, new cafes, eateries and nightspots continue to
sprout across the island, even as others exit under the weight of high costs and intense
competition.
Singaporeans’ passion for starting businesses related to food, it appears, is as strong
as their love for consuming it. A survey conducted by Sydney-based research firm BIS
Shrapnel showed that the average Singaporean spends $1,900 a year at hawker centres,
restaurants, and cafes.
At the same time, the consumer food service sector in Singapore was valued at  S$6.1
billion in 2014, a figure that is estimated to rise to  S$7.2 billion by 2018,  according to
market intelligence firm Euromonitor International.

Chart 1: Consumer Foodservice Industry Value and Forecast

Source: Euromonitor, DBS Bank estimates

A closer look at these restaurants reveals that cafes and bars make up the largest segment
of physical establishments (excluding street stalls and kiosks) (Chart 2).

Chart 2: Consumer Foodservice Outlets, Breakdown by Category

Source: Euromonitor, DBS Bank estimates

2 / Introduction
And the appetite for setting up an F&B outlet has not waned. Over the past four years,
the industry has expanded significantly, as the total value and number of establishments
grew 19 per cent and 10 per cent, respectively.
Our analysis of Singstats data shows that the food service industry remains profitable
despite increases in turnover and expenditures.
Based on Euromonitor forecasts for 2014-2018, the industry is expected to grow at a 4.4
per cent compound annual growth rate (CAGR) along with a decline in margins from 6.4
per cent to 5.2 per cent. In the same period, expect a slower expansion in the number of
food outlets to 1.2 per cent CAGR, and a marginal rise in ticket size at 1.6 per cent CAGR
(table 1).

Table 1: Forecasted Growth Rate for Consumer Foodservice Industry in Singapore

% Growth CAGR 2010-2014 CAGR 2014-2018

Food service value 4.5% 4.4%
Food service transaction value 1.1% 1.6%
Food service outlets 2.5% 1.2%
Source: Euromonitor, DBS Bank

Hard numbers aside, the F&B scene here has also grown in sophistication. Customers
demand not only high quality fare, but also food that is healthier and sourced from
sustainable sources. Industry players have responded, bringing in a host of concepts
catering for increasingly varied tastes.
One trend is the rise of foodservice outlets outside the CBD. People living in the
suburbs now have a myriad of dining options, as independent cafes, bars and restaurants
(both local and international) ride on upcoming residential developments as well as the
previous success of cafe and bar players, and move into these areas.
The health trend is likely to continue too, as more foodservice players take on government
subsidies such as the Healthier Dining Grant. The grant provides subsidies for healthy
menu offerings, and has now been extended from hawker centres to restaurants.
Coupled with rising costs, it is no surprise this health trend has had an impact on fast food
outlets. According to Singstat, they have about 1.7 per cent margins, making them the
least profitable players. This is not likely to change as profitability is expected to slip even
further over the next four years.
More and more tech-savvy consumers mean a number of critical implications for
foodservice players. Players may lose out if they do not use social media to reach
consumers. Singaporeans actively seek out dining spots online and do not mind forking
out more for unique selling points, such as special ingredients and celebrity chefs. F&B
businesses should differentiate their dining experiences – in terms of decor, ambience
and menu offerings – as well as establish an online presence.
Industry players are leaning towards digital too, and are reaping the benefits of going
online. For one, the home delivery and takeaway segment recorded the fastest growth,
at 12.3 per cent CAGR from 2010 to 2014, according to Euromonitor, propelled by third-
party online food delivery platforms, such as Foodpanda.

Introduction / 3
Disrupting the Status Quo
Yet, dig a little deeper and the picture is far from encouraging. While operating receipts
for F&B businesses were up 4.7 per cent in 2013, their operating surplus slipped 1.7 per
cent over the same period, Singstat data showed.
While consumer foodservice remains profitable, margins are likely to be compressed
as revenues fail to keep up with expenditures such as labour, rental and raw materials.
Indeed, these three items make up around 77 per cent of total business costs on average,
according to Singstats: purchases stand at 31 per cent, wages at 29 per cent, and rental
at 17 per cent.

“increases
From our view, competition will stiffen due to
in the number
of players and malls, as well as rising cost
pressures for labour, rental and raw materials. ”
– Andy Sim, Senior Vice President of DBS Group Research.

This view is in line with a DBS BusinessClass survey conducted in April 2015 with F&B
operators, who cited lack of manpower and labour costs as their biggest obstacles to
growth.
Already, the casualties are piling up. Almost half of the 369 cafes, coffee houses and snack
bars that registered their businesses in 2011 had pulled down the shutters by last year,
data from the Accounting and Corporate Regulatory Authority showed.
The good news is that a new generation of F&B startups are turning to disruptive solutions
to overcome the challenges facing them.
Leveraging an explosion of exciting innovation in the global food industry, as well as
tapping on a growing number of local solutions providers, these businesses are fighting
back.
Disruptive technologies such as artificial intelligence, data analytics, nutrigenetics,
aeroponics and drones are starting to make their mark on the sector globally. Imagine
an app that uses big data to generate powerful insights for companies regarding time
of consumption, or a platform with over 1 million recipes adapted to specific taste and
nutritional preferences.
These developments have made the food industry sexy again, and put it on the radar of
global investors. Indeed, F&B companies around the world attracted US$1.1 billion in
venture capital in the first half of 2014, up from US$1.6 billion for the entire year of 2013,
according to Dow Jones VentureSource.
Some of these ground breaking solutions are starting to pop up at eateries, cafes and
nightspots across Singapore’s vibrant F&B scene. Operators like Timbre are already
exploring drones at its outlets to boost productivity, while others are crafting out-of-the-
box business models to keep a lid on costs or stand out in a standing-room-only market.

4 / Introduction
Yet, at this point, these firms are the exceptions rather than the norm in Singapore.
Findings from the DBS BusinessClass survey showed that almost all businesses were
actively using social media to boost productivity, but not much else.
Encouragingly, many do say that they are considering the use of robotics and other
automation technologies, a sign that these solutions could become commonplace here in
the coming years.

A Guide for startups

This report aims to help F&B startups and their owners navigate today’s challenging
business landscape. Using case studies of of F&B businesses in Singapore, it will shine a
light on the issues facing the sector as a whole, and more importantly, explore the various
disruptive solutions that are being employed to help operators here thrive.
It also gives an overview of the technologies emerging globally to help businesses stay on
top of the trends that could soon affect them, as well as some handy tips on what it takes
to be a successful F&B entrepreneur in today’s fast-evolving environment.
It is probably one of the toughest times to be an F&B player in Singapore, but it is also one
of the most exciting. Problems such as a tight labour supply and rising costs is spurring
innovation in the sector, and in the process redefining what it means to be a food and
beverage business.
It is hoped the hearty content presented here can be used to help F&B businesses (and
taken without a pinch of salt). Bon appetit!

Introduction / 5
Old Challenges,
New Solutions
6 / Guide to disrupting food & beverage
Challenge #1: Manpower crunch
F&B entrepreneurs are turning to digital technology and robotics to
tackle the problem of a tight labour supply in the service industry.

Tighter manpower policies aim to cut down on companies’ reliance on foreign labour and
to improve productivity. But it also means that the F&B sector, which is hugely dependent
on service staff, is struggling with a manpower crunch and rising labour costs.
The Straits Times reported that job vacancies in the accommodation and food services
sector grew 55 per cent from 5,010 as at Sept 30, 2011, to 7,740 as at Sept 30 last year. Of
these vacancies, some 1,800 waiters, 850 food service counter assistants and 840 cooks
were needed, but most of these jobs had been listed for at least six months.
In turn, this has stifled business and entrepreneurship in the industry. Restaurants such
as Kilo and Wild Rocket have been forced to turn away diners because they lack the
manpower to serve them.
Others are seeking their fortunes overseas instead of locally, because of the severe
manpower shortage and other high business costs. In 2013, the TungLok Group closed
outlets to focus on the operations of its other restaurants, its catering arm and its plan
for overseas expansion.
Last year, the Les Amis Group said that it had no plans to open further outlets here, aside
from three restaurants that were previously committed. Instead, it has set about opening
six restaurants across Southeast Asia.
A recent DBS BusinessClass survey showed that 70% of the respondents in F&B business
thought that Singapore’s manpower shortage was the biggest challenge facing the
industry.
But while the manpower challenge may look dire, the situation is not desperate if
businesses are bold and are unafraid to tackle it head on.

Old Challenges, New Solutions / 7

The shift away from fine dining towards casual and smaller, more intimate restaurants,
which are easier to staff, has also been partly due to the severe manpower shortage and
high labour costs.

Drones to the rescue

One crucial tactic is to make better use of technology. From point-of-sales to the back
kitchen, more high-tech solutions are coming up that promise to help businesses use less
labour, boost productivity, save money, and improve efficiency.
Think of digital apps that replace waiters and receptionists taking orders or reservations,
even before they get to the restaurant. Or, flying drones and automated kitchens that
replace manual labour with robotic runners, waiters and cooks.
And it seems that the future is already here. Bar and restaurant chain Timbre Group was
one of the first dining outlets in Singapore that allowed customers to order food from
iPad menus from every single table.

Photo credit:
Infinium Robotics

It may now be the first to use autonomous flying drones. If current tests go well, these
drone runners will take flight at Timbre outlets by the end of the year, says its managing
director Edward Chia.
A meeting with Singapore-based start-up Infinium Robotics CEO Woon Junyang allayed
Chia’s concerns about trays spilling and he realised that using drones in a restaurant was
not a far-fetched fantasy.
Chia said: “When you see it for yourself, then you have more confidence that this is
something that could work. That is why we just took a leap of faith and tried to work it out.
“We are not afraid to be a first adopter. We are not afraid to adopt new ideas. Even with
our iPad menus, we were the first clients too, then other people in the industry started
latching on. Sometimes, it is the first adopter that is crucial, and we performed that role
for the iPad vendors. Hopefully we can do that for (Infinium).”

8 / Old Challenges, New Solutions

While a few issues still need to be resolved, such as loud flying sounds and better landing
accuracy, Chia and Woon are confident that the drone waiters will be a welcome disruption
to the F&B service industry. Indeed, Woon himself estimates that Infinium will be building
1,000 drones for the F&B industry in Singapore as well as overseas by next year.
Chia’s main concern is buy-in from customers and staff, saying it took about six months
for customers to get used to e-menus: “It takes a lot to change human behaviour even if
people know it is more convenient. It takes a huge psychological leap for people to change
their behaviour.”
He expects a similar “wait and see” period for the drone runners. The group aims to have
a total of 40 drones: eight airborne drones flying food and drinks from the kitchen to the
service station in each of its five outlets. Each drone is built with anti-collision infrared
sensors and swarming capabilities. Estimated costs for the project are in the low seven
figures.
While the price may be high for some in the industry, the benefits in resolving a manpower
crunch are clear, said Woon. “What we hope to do is to reduce the need to run about for
the waiters, so (restaurants) can focus on higher value tasks such as front-line service.”
Agreeing, Chia said: “It all goes back to the lack of manpower, which is why we are heavily
investing in things like drones and apps to try and enhance the customer experience.”
So, as the technology is already being fine-tuned, it is likely that affordability and
availability issues will be resolved with time. In any case, budding F&B entrepreneurs
should keep an eye on the future and be ready for when the drones come in.

Mobile first
Mobile technologies that streamline operations – from managing inventory to compiling
payment data – can also allow for better manpower and productivity gains.
For instance, integrated platforms like Mobikon collect data from restaurants, and allow
them to juggle reservations, manage customer loyalty programmes, run campaigns and
channel real-time transactional data straight to their accounting software.
Local tech company TabSquare has four different mobile solutions for F&B businesses.
The SkipQue app, for instance, lets restaurants build their own custom app so they can
easily offer customers mobile and online ordering, payments and loyalty programmes.

Its e-Menu solutions for the iPad offer food

and wine menus that are fully integrated with
kitchen and point-of-sale systems. So customer
orders are sent directly to the kitchen and the
bills are printed out.
The third solution is eWaiter, a digital platform
that allows restaurants to get their customers’
history, orders, and order status. Kitchen
staff can look at the order status, then inform
servers and diners when the dishes are ready
to be served.

Photo credit: TabSquare

Old Challenges, New Solutions / 9

Finally, its eKiosk is a self-order kiosk, better suited for quick service players such as fast
food outlets and cafes. It lets customers browse menus, place their orders as well as pay
the bill.
Frunk, another startup in Singapore, allows customers to view the restaurant’s menu
on their smartphones and decide what they want to order while they are on the road or
waiting in line at the restaurant.
Once seated, all they need to do is simply tap their phones on a specially enabled tabletop
sticker for verification, and their orders are electronically transmitted to the kitchen.
These stickers make use of Apple’s iBeacon technology, which is an indoor proximity
system that allows actions to be performed from a smartphone.
Frunk hopes that its low-cost solution is one useful and smart way to resolve the ongoing
manpower shortage.

Cooking central
Food caterers have an impressive profitability of an estimated 20.1 per cent, compared
to 6.4 per cent for other industry players. This is due to the significant rental cost savings
through centralised kitchen operations and the absence of physical outlets.
Chart 3: Top 4 Business Costs and Margins in Consumer Foodservice, 2013

Source: Singstats, DBS Bank

Other F&B businesses in Singapore have also turned to central kitchens – armed with
cooking robots and machines that can stir fry noodles or create desserts – in part to
resolve their labour woes.
Investing in robotic and automated cooking equipment makes sense especially for larger
companies, such as Select Group, TungLok or BreadTalk. It can help companies grow and
maximise their capabilities, without needing to deal with the manpower crunch.
Char-Grill Bar, for instance, set up a centralised kitchen to boost efficiency, cut down on
the group’s labour requirements as well as to ensure consistency of food quality across all
its 23 outlets.
Though the solution “was forced out” of Char-Grill Bar, owner Fong Chee Cheong has
seen obvious productivity improvements. Training time of staff has been cut down,
processes have been simplified and the transfer of knowledge to its franchises has been
made easier.

10 / Old Challenges, New Solutions

WHAT WE CAN LEARN
F RO M
The group’s central kitchen consists of four 2,000 square feet units in Bedok, with many
CHAR-GRILL BAR
of the food preparation processes now automated.

S E TTING UP A C E N T R AL KI T C H E N

Houses large
equipment &
CENTRAL
handles major
food processes. KITCHEN

40% 60% 70% 30%

DINING KITCHEN DINING KITCHEN

Less space for other More kitchen space required More space for Less complex
uses like dining for more complext equipment other uses like dining kitchen requirements
and processes at the stall.

E FFEC TI VE REC RU I TM E N T S T R AT E G Y

5 MONTHS OF TRAINING
For an experienced chef to
manage kitchen and the store

SHORTER TRAINING PERIOD

CHEAPER LABOR
15 DAYS OF TRAINING EASIER TO FIND STAFF
for a kitchen helper, thanks to support
given by the central kitchen processes

S C AL I NG THE B U S I N E S S WI T H FR AN C H I S E

VARYING QUALITY Franchise Franchise Franchise

at different stores
Flagship
STORE
A
Franchise

CENTRAL
Flagship
KITCHEN
STORE
B Scaling
Franchise Franchise Franchise
Requirements:
High cost to
STORE replecate outlets
C
Individual outlets
Less cost intensive
vary in standards
Central kitchen allows franchisees to
consistently produce quality products

Old Challenges, New Solutions / 11

Kitchens of the future
More cooks are already depending on tablets or smartphones to help them in the kitchen
for shopping lists and recipes online. For restaurant owners, smart kitchens can cut down
on waste, resulting in cost savings. Connected refrigerators can inform chefs via their
smartphones of the items already stocked on the shelves, so they will not order excess
items.
No need to throw old food out either – some fridges can now show the expiration
dates. Other appliances such as the portable Penguin Organic Food Safety Checker,
shown earlier this year at the Consumer Electronics Show (CES), tests food for traces of
pesticides and antibiotics within minutes.
Plus, a smart kitchen can mean a safer work kitchen and better peace of mind. Appliance
makers are engineering connected appliances to be shut off remotely, to prevent stove
fires.
Or who needs a sous chef when one can have Panasonic’s kitchen of the future? The
Japanese brand showed off its vision for the future of cooking at this year’s CES with self-
stirring pots for curries, soups and stews, along with an induction range that will not burn
fingers as well as a camera-enabled oven, fridge and dishwasher that are monitored from
a connected tablet.

12 / Old Challenges, New Solutions

Want more inspiration?
Here are other smart kitchen ideas to chew on:

Cinder To be released in 2016, the Cinder Sensing Cooker can cook food remotely
via a smartphone or tablet. Just tap on the app, pick the food and cooking
Sensing method, and Cinder’s smart, cast-iron cooking plates will start searing the
Cooker food evenly.

Meld Meld Knob + Clip which combines a Bluetooth thermometer that is clipped
on to the pot, along with an automated knob that replaces one of the existing
Knob + gas cooker dials. Together with a mobile app, the system automatically and
accurately adjusts the cooker’s temperature, resulting in perfectly cooked
Clip meals.

World’s Eduardo Garcia, the world’s first bionic chef, is the epitome of wearable
tech. The man, who lost his left arm in a hiking accident in 2011, now has a
first prosthetic left arm so advanced, he can still work full time as a private chef
and food company owner.
Bionic It allows his skin and muscles to “respond” to software, so that he can grip in
chef 25 different ways and continue to slice and dice vegetables or fry up steaks.
Last year, he switched from his five-fingered bionic hand to a lightweight and
durable bionic hook, which still allows him to cook; the hook is detachable
so that he can even fit in a spoon or whisk if he has to.
While Eduardo continues to fulfill his childhood dream of being a chef, his
real vision, however, is to create the perfect wearable prosthetic for the
kitchen, with truly high-tech features such as built-in knife sharpeners,
screens that display bacteria warnings and temperature sensors.

Old Challenges, New Solutions / 13

Challenge #2: High Rental Costs
Solution: Cutting Out the Middle Man
Faced with high rental costs, F&B players are turning to creative
ways of getting their food and drink to their customers

Photo credit:
The Coffee Bandits

Paying the rent is probably one of the least-liked tasks of any entrepreneur. That probably
goes double for those in the F&B sector in Singapore, where sky-high property values and
fierce competition for prime real estate is taking its toll on the bottom line.
While the growth in retail rental rates have eased in recent quarters as new supply comes
online and tenants resist further hikes, this is likely to be offset by new entrants into the
market.
A report by real estate consultancy Colliers International noted that in Q1 2015, “the F&B
scene continued to be abuzz with activities, with new restaurants and eateries opening
both in conventional malls and non-mall locations – such as shophouses, commercial
spaces within HDB estates and the ancillary retail space of commercial buildings.”
Finding the right location has long been a key competitive advantage for any F&B
business, particularly those at the premium end of the market. Not being in the right place
can adversely affect traffic into the establishment and impact revenues, even as steep
rental costs squeeze margins.
While delivery services have long brought food and drink to the customer’s doorstep,
these have largely been an extension of traditional brick-and-mortar businesses, or
limited to a handful of fast-food operators.

14 / Old Challenges, New Solutions

Newer players in Singapore are throwing out the rulebook when it comes to distribution,
and utilising business models that are bringing high-end fare such as premium oysters,
exclusive French wine and gourmet coffee to customers, without having to deal with
landlords or contractors.
Here is a closer look at one local start-up, The Coffee Bandits, who had to navigate a
regulatory maze to start their food truck business.

Case study
The Coffee Bandits
When corporate warriors Jessica Chow and Cheryl Ong became mothers a few
years ago, they used it as an opportunity to take a step away from the rat race and
indulge in their twin passions of food and entrepreneurship.
They partnered up to form The Coffee Bandits, which had a simple premise: to
bring good coffee to places in Singapore that do not have it. So, they decided to
start a food truck business, which was still a new concept in Singapore.
They believed that a food truck would allow them to reach markets brimming with
eager consumers but with little competition, even as they avoided the hassle, and
costs, of a physical location. And it gave them the flexibility to switch locations to
capitalise on changing market dynamics.
However, getting their idea off the ground proved to be a much tougher proposition
than they first envisioned. As the concept of a food truck was new here, many of the
local government agencies were not equipped with the guidelines to regulate it.
What ensued was a nine-month game of pinball with government agencies to get all
the necessary licences and permits in place.
“There were a lot of grey areas about who should be overseeing what. So there
were many chicken and egg situations. But we eventually got it done,” said Chow.
The next challenge was getting their truck fitted out for an F&B operation. With no
benchmark to follow, the entrepreneurs designed the interiors of the vehicle based
on what they thought would work. Not surprisingly, there was much trial and error
before they struck the right formula.
The Coffee Bandits finally hit the road in September last year, visiting industrial
and business parks in far-flung areas such as Seletar Aeropark, Jurong West and
Jurong Island. Business has been brisk since day one, as customers flocked to their
menu of premium cafe fare – such as the popular pulled pork sandwich – and, of
course, good steaming cups of coffee. The team keeps their customers aware of
their locations through social media.
With their mobility and self-contained kitchens, The Coffee Bandits food truck has
also proven popular for private events, and they have seen increasing demand from
that segment of the market.

Old Challenges, New Solutions / 15

While there have been the inevitable hiccups like broken generators and the
perennial problem of finding staff, the adventurous pair behind The Coffee Bandits
proves that taking a gamble on an innovative, if largely untested, business model
can pay off in many ways.
“The food truck model gives us many advantages. Being mobile, we don’t have to
wait two years to review where we want to be,” said Ong.
“There are only a few food trucks in Singapore now, and we think there is plenty of
room for more. We would be happy to help anyone who wants to do a food truck.”
Like Cheryl and Jessica, other enterprising entrepreneurs are experimenting with
mobile models of distributing their food. The Oyster Cart, for instance, serves up
its premium offerings of freshly shucked oysters on a mobile cart. The founders
started by customising a cart bought from Ikea for their very specific needs.
The company is now working on supplying regular oyster nights for two
establishments.

Photo credits: The Oyster Cart

16 / Old Challenges, New Solutions

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18 / Old Challenges, New Solutions
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Old Challenges, New Solutions / 19
Challenge #3: Securing Food Supply
A BRAVE NEW MENU
New solutions to growing food shortages around the world could
have big implications for the F&B sector.

Photo credit: Engineering Computer Service(s)

Even as many F&B businesses battle with soaring costs and hard to come by employees,
more progressive players are looking further up the value chain at new food sources
coming down stream.
This has become increasingly urgent as the world faces critical food shortages in the
future. Research shows that by 2050, the world is predicted to require 85 per cent more
staple food crops than were produced in 2013. Meanwhile, demand for meat is expected
to increase by more than two-thirds and current production methods are not sustainable,
according to the Food and Agriculture Organization of the United Nations.
F&B players must therefore consider alternative sources of food to manage rising costs as
a result of shortages, and to maintain the quality of their offerings.
This is especially pertinent to larger operators whose growing footprint requires a
growing supply of quality raw materials to ensure that quality remains consistent across
their various outlets.
Sakae Sushi founder and chairman Douglas Foo, for instance, has stepped back from the
day-to-day running of his international, 200 plus-outlet Sushi restaurant chain to focus
on a few key strategic areas – one of them involves securing a long-term supply of fresh
seafood that is a core ingredient of the brand’s offerings.
In an interview with The Business Times last year, the entrepreneur revealed that he
scours the world looking for new food resources to support the planned growth of the
brand globally, or in his own words, to “future proof” his business. Sakae Sushi’s 40-odd
outlets in Singapore alone consume around 30 to 40 tonnes of salmon a month, he reveals.

20 / Old Challenges, New Solutions

As the competition to secure limited food supply continues, advances in technology have
resulted in a host of ground breaking solutions – from beef grown in a lab to using big data
analytics to create new types of food. These have many implications on the way people
eat, and will also impact the operations for F&B operators, whether in terms of lower cost,
more consistent quality or a menu catering to consumers who value sustainability. Some
of these innovations also address rising demand for healthier food options and concerns
over the carbon footprint of what they consume.
These are innovations still in their infancy, and would probably take some time before
they reach the tables of diners in Singapore. Yet, as the pace of technology advancement
continues to quicken (who would have imagined seeing drone waiters here just a year
ago?) it could come sooner than expected.
Here are some of the more exciting developments happening around the world that are
set to change the industry in profound ways.

Victimless Beef – The $300,000 Burger

In-vitro meat is created by harvesting muscle cells from a living cow, which scientists then
feed and nurture so they multiply to create muscle tissue, which is the main component
of the meat that people eat. It is biologically the same as the meat tissue that comes from
a cow, according to the team at Maastricht University that is doing research in this area.
(http://culturedbeef.net/home/)

The cells grow into strands that are combined to create the meat. In 2013, Professor Mark
Post of Maastricht University unveiled the world’s first in-vitro burger made up of around
20,000 such strands. The burger was made with a little egg powder and breadcrumbs and
a few other common burger ingredients.
While the cost of that first burger cost a whopping US$325,000, Prof Post recently told
ABC News that it is possible to produce lab-grown beef for as little as US$80 a kilogram
today, and that it will be priced competitively to the real thing within a few years. He noted
that one could produce 10,000 kilograms of meat from a small piece of muscle.
University of Oxford research also suggested that producing in-vitro beef could use as
much as 99 per cent less space than what is needed for current livestock farming methods.

Old Challenges, New Solutions / 21

Also known as cultured beef and victimless meat, supporters say that it is less objectionable
than eating traditional meat because it does not involve killing and reduces the risk of animal
cruelty.
Some argue, however, against eating any kind of food that has not developed naturally. In a
Food Forward Trends Report last year, public relations agency Weber Shandwick found that
74 per cent of the 750 Singaporeans surveyed are not comfortable eating meat grown out in
a lab.

Salmon on Steroids
While genetically modified (GM) crops have been around for over two decades, the world is
still waiting for the first GM livestock to be approved. Hopes are high among advocates of the
controversial food type that this could finally happen this year.
GM Atlantic salmon has been developed by US company AquaBounty, and is currently
awaiting approval by US regulators – a wait that has lasted 20 years. The company submitted
its application to market the salmon way back in 1995, but it was not until 2012 that the US
Food and Drug Administration (FDA) issued a Finding of No Significant Impact – the last hurdle
before approval.
AquaBounty Scientists took a growth hormone regulating gene from a Pacific Chinook salmon
and inserted it into an Atlantic salmon. The resulting fish grows all year round, rather than
just during spring and summer. It also grows to market size in 16 to 18 months, rather than
the usual three years. This accelerated growth means shorter production cycles, resulting in a
more efficient use of feed.
“The impact on global food production is potentially enormous,” said Ron Scottish, AquaBounty’s
chief executive, in a recent interview with BBC. “It is identical to all other Atlantic salmon: it
looks the same, it tastes the same. The only thing it does different is grow faster.”
But GM food remains a contentious issue. In April this year, U.S.-based Mexican food chain
Chipotle announced that it would no longer serve food with genetically modified organisms.

Big Data for New Foods

A San Francisco tech startup called Hampton Creek is applying the science of big data analytics
to new kinds of food.
The firm is building a massive database of all known plant proteins (which could eventually
reach up to 18 billion in number) that can be used to model the creation of new foods. Biologists
at the company have already catalogued and analysed about 4,000 plant proteins, running
about 30 biological tests on each of them.
Using the data, the scientists can predict how others will interact and identify combinations
that are likely to produce enjoyable foods. The company has already produced a “reasonable
facsimile” of the chicken egg, using proteins from the Canadian yellow pea and an American
variety of sorghum.
“With this egg we’ve made a better mayo and a better cookie,” wrote the company’s vice
president of data Dan Zigmond, in a recent article for Wired.com.
“The idea is to create new food sources for an expanding global population—sources that are
cheaper, safer, and healthier than what we have today.”

22 / Old Challenges, New Solutions

Challenge #4: Growing a customer base
Solution: Building up a digital app-etite
Do not get left behind in the mobile revolution. Food apps can
help to boost business – and its bottom line.
When hunger strikes, what do average Singaporeans do? Whip out their
smartphones to check on the latest and best food offerings, of course.
From leaving reviews on social media (HungryGoWhere, Makansutra, Burpple and
soshiok) and tracking their calories (MyFitnessPal, iDAT) to online food ordering
(foodpanda, Oddle) and making real-time reservations (Chope.sg), there is a whole
gamut of mobile apps out there for foodies to tap on and play with.
The numbers prove it: According to digital marketing agency We Are Social, more
than 85 per cent of people in Singapore are active users of mobile social media.
Another survey by Deloitte’s Global Technology, Media and Telecommunications
division showed that Singapore also ranked the highest for smartphone penetration
globally, with nine out of 10 having access to a smartphone.
With Singapore’s digitally savvy population, F&B players should seriously consider
riding this mobile wave if they do not want to be left behind. And that means doing
more than simply engaging diners on social media to build up a customer base. So
how can small and medium-sized enterprises in the F&B industry work these food
apps to their advantage?

Pushing for the upsell & cross-sell

First, these apps – whether on smartphones or on tablets – can help businesses
increase cross-sell revenue via mobile order-ahead apps and interactive menus.
For instance, American quick-service chains like Taco Bell, Pizza Hut and Chipotle
are now using order-ahead apps to boost their order sales, attract customers, and
increase brand loyalty.
Early indications, as reported by Business Insider, are that these mobile apps can
drive revenues, as they appear more effective than human staff in upselling add-
ons (“Would you like fries to go with that?”) and increasing average order values
(“Yes, please!”).
As for interactive tablet menus, the restaurants of celebrity chef Gordon Ramsay
even have electronic wine lists that one can search for ratings, suitable pairings,
and recommendations.
So, it pays to have glossy, well-taken photos of food and drink, nutritional
information and other details constantly available on the table. Diners will be
more inclined to order items with a simple tap on the screen – no need to wait for
a waiter.
The result of this upselling is higher revenues for some eateries that use these
digitised menus, something an ordinary menu printed on paper would not be able
to achieve. Indeed, these systems claim to lift sales by 10 to 15 per cent. As one
CEO of a restaurant consulting firm told Reuters: “The machine never forgets to
upsell.”

Old Challenges, New Solutions / 23

The rewards of reservation apps
Reservation apps have their own reward systems to entice customers and keep them
hooked on the app. As TechInAsia reported, South-east Asian apps such as Dineout
from the Philippines and MakanLuar from Indonesia offer free perks and points, which
can be converted into gift certificates or redeemed for meals.
The online reservation platform Dineout, for instance, does not just allow customers
to book a table on their smartphones or recommend a restaurant based on their
cravings or location. Its customer reward system gives users freebies, such as drinks
to restaurant discounts; it also lets them earn points, which are converted into gift
certificates, when they make a reservation. Dineout also has a reservation management
system for restaurants too, allowing them to confirm reservations and generate market
trend reports.
Similarly, MakanLuar offers a loyalty programme for diners, who chalk up points that
can be later converted into cash and deducted from their bill. Like Dineout, MakanLuar
also gives users freebies such as desserts and drinks. It has even tied up with GrabTaxi
to offer discounted rides to the restaurants. The app also offers backend data solutions
for restaurants, such as tracking customer order histories and food preferences.

Payment integration
On the back office front, integrated business-to-business platforms like Mobikon collect
data from restaurants, and allow them to juggle reservations, manage customer loyalty
programmes, run campaigns and even channel real-time transactional data straight to
their accounting software.
Easing payment friction is a key benefit for many players in the US because of the
increasing popularity of mobile payment platforms like Apple Pay and Google Wallet,
which are convenient and easy to use. Smartphone and smart watch users link up their
credit or debit card to these payment features, then pay for items with a simple tap of
their gadget on the register.
This growing phenomenon explains why a number of new American startups are
focusing on mobile dining payments. They are now creating apps that allow diners to
pay for their meals with their smartphones – not with cash or card, or even a tap at the
register.
This “Uber-isation” of restaurant payments, named after the popular ride-sharing
service, makes getting the bill a whole lot easier for diners. These apps also allow
for better customer relationship management, including collection and analysis of
customer data as well as customer loyalty programmes.
PaidEasy, a new app using Apple’s iBeacon technology that is in Beta testing in New
York, lets customers pay for meals with the app as well as gives additional security
by encrypting their credit card so their details remain private. The app integrates
seamlessly with a merchant’s existing point-of-sale system, and does not require
additional steps or hardware.
Pay with OpenTable is a more established player in the mobile dining payment scene.
The app now aims to be a one-stop shop of sorts for restaurants with its integrated
functionality, letting diners book a reservation and pay for their meals within the app.
The service is due to be available throughout the US by the end of the year.

24 / Old Challenges, New Solutions

Case study Case study
Premise Nara Logics
Imagine tracking food items at grocery stores A bunch of neuroscientists from MIT have created
and markets in Singapore, and even around an artificial intelligence “brain-like” system for
the world. One would be able to verify a hunting down restaurants and other businesses.
product’s availability and price, and adjust
Instead of using the usual tedious online searches,
them accordingly. Or even understand how
the folks at Nara Logics employ a cloud-based
a competitor prices the dishes served at his
neural network to “deep-dive” into the Internet.
restaurant.
Data is analysed from the different relationships
This large-scale tracking of food staples and between restaurants, cooks, chefs, diners, and
other items is what San Francisco-based data other sources.
technology startup Premise offers. It creates
Here is how it works: Nara gathers web data
software and mobile apps that can track
from restaurant listings to blog posts, indexes
business and economic trends in real time using
that information, then recommends a slew of
thousands of online and on-the-ground sources.
recommended venues. All this is based on a
It pays ordinary citizens to keep track of these customer’s food preferences, his likes and dislikes.
products, by snapping photos and keying in data In effect, it is building a massive, dedicated web
such as date, location and price. The data is then that is tailored to his interests and tastes.
classified and analysed, with actionable insights
For F&B owners, Nara clearly shows that it pays
created.
to have an active presence online. The more
Already, it is working with multinational visible a business’s presence, the better it seems
companies as well as governments to trace food its results will appear in the Nara system.
prices – it is tracking more than 25 food staples
in 25 cities across India, China, Brazil and other
countries, according to TechCrunch. Case study
The hope is that the data will allow for a more Path Talk
meaningful understanding of food pricing and Soon, customers will not need to call the grocery
availability. For companies, it also allows for store to check if white asparagus is in season or if a
better branding strategies when targeting particular brand of oyster sauce is on the shelves.
customers. Other business-to-business mobile With Path Talk, they can now SMS their query to
solutions include those that free up manpower a store, instead of dialling its number.
and boost customer satisfaction, such as self-
A standalone smartphone app, Path Talk lets
service restaurant reservations and queuing
them text message all types of businesses, from
systems.
supermarkets to coffee chains. Path Talk call
Ticktok’s automated queuing and reservation centre employees will then note their request, call
platform lets customers join a restaurant’s the store and reply to their SMS within minutes.
queue. When their table is ready, all you need
The feature is known as place messaging, and
to do is “ping” them on the dashboard on your
Path Talk is already becoming popular in the US
tablet and the customer responds on their
and Indonesia. It is a boon for busy customers
mobile phone. Said to process more than
who do not have the time nor the energy to wait
136,000 diners a month in Singapore, Ticktok
on hold while their request is being attended to.
also allows you to drive repeat customers back
to your restaurant.

Old Challenges, New Solutions / 25

New Skills needed to Succeed

THE F&B ENTREPRENEUR

OF THE FUTURE
With technological advancements and changing consumer habits,
the knowledge and skills needed to run a successful F&B business is
changing rapidly. Here is what it could look like in a few years’ time.

26 / Guide to disrupting food & beverage

I, Robot
The restaurateur of tomorrow has to be comfortable dealing with
staff of the robotic kind, as automation takes over more functions in
the front and backend of F&B establishments.
Drone wait staff and tablet-based ordering is just the start; if self-
service billing technology starts appearing in establishments, an
entirely server-free restaurant could be just around the corner.
Ramping up automation by using smart kitchens and a wired-up
restaurant allows a business to boost productivity, while technology
can also generate new revenue streams such as delivery services.

Know the customer – really, really well

To stay ahead of the competition, entrepreneurs will need to leverage
the copious amounts of data flowing through their various social
media platforms from their customers.
As data analytics tools become cheaper, businesses can gather
customer feedback and sentiment on everything from new dishes to
service experiences – and react almost instantaneously. That steak
tartare entree not going down well with diners? There is no need
to see customers dry up before changing it to something else more
palatable.
Amazon is already using power predictive tools to deliver items to
people’s doorsteps before they have bought them. One day, a diner’s
favourite bottle of Pinot Noir could be already decanted when he
reaches his table.

Show a softer side

With persistent labour shortages, hanging on to good staff has
become an imperative for entrepreneurs. That means shedding a
Gordon Ramsey style of tough management and going for a more
touchy-feely approach when dealing with the Gen Z types who will be
entering the work force in droves over the next decade. EQ trumps
IQ when it comes to dealing with the next generation of workers.

Channel surfing
In the retail world, the online and physical worlds are colliding as
e-commerce players add a physical presence to offer a true multi-
channel experience to their customers. Likewise, F&B players must
be omnipresent to their customers, whether they are online using
an app to decide what to eat next, or across a variety of physical
platforms – whether it is from a food truck, delivered to their
doorsteps or at temporary pop-up location.
With competition for prime real estate unlikely to ease up anytime
soon, being fleet-footed will be a major advantage.

The F&B Entrepreneur of the Future / 27

Eat Responsibly
Sustainability is becoming increasingly important to consumers
around the world. Some will only eat the meat of animals that were
not cruelly treated, while others insist that their coffee is made from
beans bought from countries that have not been exploited.
Showing green credentials is no longer a trendy nice-to-have, but
rather a winning hand in a market that values eco-friendly practices.

28 / The F&B Entrepreneur of the Future

Guide to disrupting food & beverage / 29
The picture for the F&B sector in Singapore may appear a little grim at the moment, but
the current situation of rising costs and stiff competition presents a rare opportunity for
industry players to build a more resilient business for the future.
Government assistance schemes and different forms of bank financing can assist SMEs
tide through the tough times. DBS’s working capital advisory solutions, for instance, can
help businesses unlock valuable cash by assessing and optimising their cash conversion
cycle – where and when does it have cash outflows, cash returns, and areas of strengths
and risks.
In the long run, however, it is the robustness of a firm’s business model that will ensure its
sustainability.
As such, moves to boost productivity, introduce new modes of operations and technology,
and secure alternative food sources will prove to be the difference between success
and failure. Only by disrupting the status quo can businesses thrive in this challenging
environment.

According to Mr Lim Chu Chong,

Regional Head of DBS SME
Banking:

“in The ability to adapt

the face of multiple
business challenges
in a fast-changing
environment must be
the long-term goal, even
as financing helps to
facilitate growth. ”
It appears that local business owners are starting to take note of this. A survey conducted
by DP Information showed that SMEs have embraced the need to restructure; With
slightly more than half saying their main strategy going forward is to rethink their
business model. An increasing number of businesses surveyed are also seeking to improve
productivity through technology and innovation.
Yet, much more can be done to jolt SMEs here into action. This is where events like
Disrupt @ The Bay can play an important role in raising awareness of important trends
in the industry and offering participants an opportunity to meet entrepreneurs that have
successfully disrupted their industries.
“We will bring in innovations from robotics and drones to 3D food printing, that will help
industry players boost their efficiency and inspire new thinking in business models,” said
Mr Lim.
Disrupt @ The Bay is the first in a series of similar events that will explore the dynamics
of various sectors in Singapore. It is hoped that it will inspire industry players to think
differently about the challenges they face, and develop new innovative solutions to
persistent problems.

30 / The Last Course

RESERVE

ONLINE/MOBILE
RESERVATION
AND ORDERS

WORKING CAPITAL
FOR F&B
Guide to disrupting food & beverage / 31
What is working capital and why is its management critical
to new F&B businesses? Are there any best practices in
optimising working capital?
Stanley Tan, Head of the Working Capital Team in DBS Bank, answers
these questions.
1/ For new F&B businesses, could you explain what working
capital is, and why its management is important?
Working Capital involves financing the day-to-day operations for a business. It
is linked to the company’s business model and supply chain. In the F&B space,
they are two broad business models: Retail (selling to consumers), and B2B
(business-to-business).
For F&B retail, working capital would include payments received from
customers, the amount of inventory/food ingredients it keeps on hand, as well
as its payment cycle to suppliers.
For B2B, this includes payments from buyers (e.g., restaurants), inventory (e.g.,
food ingredients to manufacture packaged foods), and payments to suppliers.
Working capital management is critical as it is linked to liquidity/cash flow.
Businesses need to ensure there is sufficient cash for operations; for new
businesses in particular, there is a need to ensure sufficient cash reserves to
tide through the start-up period.

2/ What best practices are there to optimise working capital?

Working capital management involves a holistic assessment of the cash
conversion cycle – where/when do I have cash outflows, where/when do I get
cash returns, and where my areas of strengths and risks are.
Best practices are built upon this assessment. For example, a restaurant
operator could choose to differentiate itself on the quality of its food
ingredients. It might invest working capital into the on-site food production
process (for freshness) and deemphasise other aspects, like full-table service.
This then translates into how it manages its suppliers, for e.g., between food
ingredient suppliers (critical) and non-food equipment suppliers (less critical).
The emergence of the “fast casual” sector is linked to this - “Fast casual”
combines casual dining and fast food convenience. This has led to successful

32 / Working Capital for F&B

companies such as Chipotle, Shake Shack and Panera in the US.
For food producers/manufacturers, working capital best practices are often “ Working capital
management involves
linked to optimising the production process (e.g., reducing working capital
tied up through extended inventory days and inefficient production means)
a holistic assessment
and how it manages its distribution channels - where/how does it sell and on of the cash conversion
what terms. cycle. Restaurant owner
might invest working
3/ How have the skyrocketing operations costs over the recent capital into the on-
years in Singapore affected the working capital of small F&B site food production
businesses? Do you have any management advice for them? process (for freshness)
Singapore F&B retailers have been hit, particularly by the limited supply and and deemphasise other
high cost of manpower. Assuming labour continues to be scarce/expensive, aspects, like full-table
one should review the business model and determine where/how best to
compete. For example, food delivery services are emerging, whereby food
service. ”
Stanley Tan,
is pre-ordered online, prepared off-site, and then delivered to office/high- Head of the Working Capital
Team in DBS Bank.
density areas for pick-up. The labour needs are vastly different from that of a
physical food retailer.

4/ Is there a rule of thumb on how much of a cash buffer, for

example x months of working capital requirements, that you
typically advise a F&B company to put aside before thinking
about investing excess cash in other higher-return assets?
There is no magic number – it depends on the business model. That said, 3-6
months is a rough guide for a stable business (longer if the business is just
starting up). If a company is looking to deploy excess cash, it could also ensure
incremental yield without sacrificing too much liquidity, for e.g., by setting up
a ladder of fixed deposits.

5/ At what point should an F&B business start to consider

outsourcing receivables?
Receivables outsourcing or financing is largely for B2B companies and is
suitable for a company looking to optimise or free up cash flow. This could
be for a variety of reasons: to fund investment (e.g., machinery), expansion
or simply to focus management resources on other operational matters.
The business should have a loyal customer base, ideally with regular/repeat
customers.

6/ What financial instruments would you recommend for small

F&B businesses looking to manage their working capital?
Robust cash management systems would be strongly recommended. In
particular, internet and mobile banking services which provide convenience
and security and the ability to track/review payments. For B2B companies,
proactive management of Accounts Receivable and Accounts Payable
Days are effective means to manage working capital. Beyond these, certain
solutions like Accounts Receivable Financing can also help free up working
capital and allow for funds to be redeployed. Ultimately, these instruments
should enable business owners and staff to focus on the businesses by
running/optimising their operations and supply chains.

Working Capital for F&B / 33

34 / Guide to disrupting food & beverage
I/ Talent Development
The Chefmanship Academy
This institute set up by Unilever Food Solutions and the Restaurant Association of
Singapore provides training to budding entrepreneurs on the various aspects of running
an F&B business.
The programme covers 165 topics across 12 modules, combining real-world insights with
industry research to offer hands-on learning experiences. The modules are presented
through interactive workshops, seminars and online learning. Modules cover topics such
as maximising efficiency and profits, menu planning and food safety.

ACE-NUS
Businesses looking for formal training in entrepreneurship or scouting for apprentices
can turn to this new tie-up between the Action Community for Entrepreneurship (ACE)
and the National University of Singapore (NUS) Business School.
Unveiled in April, this two-year initiative aims to conduct research on issues facing
startups and facilitate apprenticeship opportunities for university students. ACE and NUS
will also jointly host a range of master classes on entrepreneurship, and hold conferences
between industry leaders and members of academia. ACE is a private-led entity run by
entrepreneurs and investors.

II/ Technology Adoption

A*Star and Singapore Productivity Centre (SPC)
Government agency A*Star and SPC recently launched a two-year programme to help
businesses in the food, hotel and retail sectors become more efficient through the
adoption of technology. SPC will identify industry-wide productivity gaps that can be
addressed with technology, while A*Star will match companies with suitable solutions.
Some of the operational areas that can be improved with technology under this scheme
include management, customer service and human resource development.

III/ Overseas Expansion

International Enterprise (IE) Singapore
For those ready to venture abroad, IE Singapore’s Market Readiness Grant funds up to 70
per cent of the costs of eligible activities – including market set-up and market promotion
– capped at S$20,000 per company per fiscal year.
The agency also supports SMEs by providing networking opportunities, overseas market
knowledge and assistance with assessing market attractiveness and risks.

Help Wanted / 35
IV/ Design Innovation
DesignSingapore Council
Good design can be a key competitive advantage in a crowded market. The Design
Innovation Assistance (DIA) scheme aims to support Singapore enterprises in adopting
design for service innovation.
This initiative by DesignSingapore Council aims to enhance business competitiveness as
well as create differentiated experiences, better products and brand retention.

V/ Government Subsidies
The Singapore Government offers many forms of technical and financial assistance
schemes through various agencies, many of which can be applied to the F&B sector.

SPRING Singapore
The lead agency for supporting local enterprises rolled out about 12,000 projects in 2014
to help SMEs deal with rising business costs and labour constraints.
SPRING Singapore offers a multitude of assistance schemes including the Capability
Development Grant, which can provide subsides up to 70 per cent of cost when applied
to 10 areas, including brand development, service excellence and human capital
development.

Inland Revenue Authority of Singapore (IRAS)

Dispensed by IRAS, the Productivity and Innovation Credit scheme (PIC) provides
subsidies and cash back rebates for investing in productive or innovative business
activities. An automated noodle-making machine, for instance, would qualify under PIC.

VI/ Financing for Start-ups

Ranging from working capital and venture debt financing to raising funds through the
capital markets, DBS offers a range of financing solutions for SMEs that is complementary
to government funding and equity financing.
The bank’s working capital advisory team, for instance, has helped many of its SME
customers unlock cash through better working capital practices, and in the process lower
their funding costs.
DBS also recently introduced Venture Debt, a first-of-its-kind product that aims to help
start-ups navigate their next stage of growth.

36 / Help Wanted
Edward Chia,
Co-Founder & Managing Director,
Timbre Group

Cynthia Chua,
Founder of the Spa Esprit Group, which owns
several Food and Beverage outlets such as
Skinny Pizza, 40 Hands Cafe and House

Andre Chiang,
Chef-Owner of Restaurant ANDRE

Dennis Foo,
Former CEO of Nightlife and F&B
Conglomerate St James Holdings

Vincent Tan,
Managing Director of Singapore-listed food
service provider Select Group

TASTY TIPS FROM THE PROS

The best tips and lessons learnt from those who have already made it in F&B
Guide to disrupting food & beverage / 37
Edward Chia, Co-Founder & Managing Director, Timbre Group,
which now has a diversified portfolio that includes five live music
restaurants and bars, a pizza restaurant and delivery service, and
two music academies.
1/ Be open
“Sometimes, Singaporeans think ‘will a technology be safe? Will the drone crash? Is it too
noisy?’. When I speak to other people, they say, ‘oh man, this is cool! how is it going to
be done? When will it launch?’. One has to be open-minded. If you are not, you tend to
shoot down ideas ideas before they are even really talked through. I am not saying, let’s
be reckless and just do anything we want to do or be too idealistic. But do be open.”

2/ Give Everything
“Once we decide to do something, then we make sure to put our heart and soul into
developing something. Often enough, it takes a lot of willpower to see through new
technologies, systems or ideas, because there are always going to be unforeseen obstacles
or roadblocks.”

3)/…But do not be afraid to call it a day if needed

“Sometimes, we do give up. Sometimes, for projects where we try our very best and they
just don’t work out the way we want, then let’s just stop. We are there wasting more time
and resources. But sometimes, if it feels like you know it is going to work out, let’s just
press on. It all comes down to circumstance, and doing our own evaluation.”

Cynthia Chua, Founder of the Spa Esprit Group, which owns

several Food and Beverage outlets such as Skinny Pizza, 40 Hands
Cafe and House.
1/ Inspiration is everywhere
“Everything you see can be adapted... I can’t draw or paint, but I can express my creativity
in business. I’m good at seeing opportunities, putting things together, and getting people
together. And I move very quickly… (But) just because I love something doesn’t mean I
want to start a business in it. It’s easy to start something, but you must remember that
your resources are finite.”

2/ Think through decisions carefully

“Today, I consider more factors. Do I really feel passionately about it? And what are the
practical aspects involved, such as getting the right target market? Yes, you might like
to educate the people with new concepts, but can your store squat there through that
period, with the rent, and become commercially viable?”

3/ Hire a great team

“You need people to run the business for you, because at any one time, there could be a
hundred problems that come with it. You have to take stock, and find the right people...
My standards are very high, and I will always push you to do better.”

38 / Tasty Tips from the Pros

Andre Chiang, Chef-Owner of Restaurant ANDRE
1/ Singapore’s F&B scene is mature and international
“Singapore’s culinary market is very mature and international. When it comes to
restaurants, people are not into fame chasing, brand names, or ‘marketing’. It creates a
equal platform for every restaurateur or chef, and that is how Restaurant ANDRE got
appreciated and embraced by many international and local communities.”  

2/ The business is an endurance race

“I believe the next five years will test the endurance of all restaurants, new and old, for
those will be replaced by better ones, and push the good ones to get even better. In the
next five years, the culinary scene will get even more mature than it is today.”

3/ People want quality

“Sometimes, people always tell me that the market is very ‘price-driven’, but for me that
was six years ago when I first arrived in Singapore. Now, people are concerned about the
quality, and are appreciative about the chef’s effort and great quality produce. I believe in
five more years, the market will get even more mature and ‘quality-driven’, which is what
Restaurant ANDRE always stands for.”

Dennis Foo, Former CEO of Nightlife and F&B Conglomerate

St James Holdings
1/ Persevere
“In Chinese, the phrase ‘jian chi’ (perseverance and determination) describes everything
that any entrepreneur must have. Its connotations are endless. Words like the following
are but a part of it: persistence, perseverance, fortitude, resolute, hold firm, determination,
grit and even guts.”  

2/ Choose a partner wisely

“My biggest lesson learnt is that in order to trust someone, we must make sure that
someone is really tested especially when we are going into partnership. So choose your
partners carefully.”  

Guide to disrupting food & beverage / 39

Vincent Tan, Managing Director of Singapore-listed food service
provider Select Group
1/ Getting ideas for productivity
“The hike in our productivity journey took off during a Japan Learning Trip that the senior
management team participated in 2009. We were inspired that a single restaurant could
be managed well with just two to three staff deployed, even during peak period, which
is a rare feat in Singapore. Since then, we started actively looking into our processes for
opportunities for productivity improvement and sourcing for technological solutions
(IT and kitchen automation) to decrease the labour intensiveness of our operations and
business processes.  Even now, we obtain many of our productivity ideas from trade
shows and other market players overseas in countries such as Japan, Taiwan and Europe.”

2/ Always on the lookout for improvement

“We are constantly looking into our processes and sourcing for technological methods to
improve our productivity. We engage polytechnic students embarking on their internships
and final year projects to study our processes using analytical techniques gleaned in their
course of study, and together with our Productivity team, identify gaps for improvements
and implement suitable solutions to help our operations.”

3/ Getting staff buy-in

“Any implementation of technology or process redesign involves changes in operations
and daily activities of staff. Staff are used to their traditional methods of doing things, and
do not see that the benefits of the change would eventually outweigh the costs when the
initiative is first being implemented. Hence, we try to increase buy-in through quarterly
sharing sessions about productivity to all operation managers, conduct in-house training,
introductory demonstrations and standard operating procedures to facilitate the
induction of the change, and even implement incentive systems if necessary.”

40 / Tasty Tips from the Pros

41
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