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Beyond Asia, BreadTalk has sights set on Europe and US
HENRY Chu, the chief executive officer of Singapore's BreadTalk Group, is more than confident of where he wants to steer the SGX-listed company over the next five to 10 years.
Under his watch, he hopes to achieve a S$1 billion market capitalisation (it is currently trending at around the S$500 million mark, having peaked at just over S$700 million in July), and improve the net profit of the different business units.
He's also eager to grow Bread-Talk's footprint around the world - it is already present in 19 territories - and cement its reputation as an international player in the ever-competitive food and beverage (F&B) industry.
Crucially, however, Mr Chu is cognisant that as the company spreads its wings across Asia and beyond, it needs to work even harder to preserve the BreadTalk identity.
"We started off with the bakery business. The fact that we are growing other brands is because the market wants changes. We are trying to find a balance between the bakery business and our other businesses, and give what the consumers want," he says in an exclusive interview with The Business Times in London.
"As we grow our stores and volume, as well as the net profit and market cap, we will be able to give a lot more back to our team," he adds, referring to the 7,000 employees on the payroll today.
"Everyone is aware that F&B is a tough business, it's penny profits. So in order to be able to reward the team more, we have to make more."
Mr Chu was in the British capital with BreadTalk's founder and chairman George Quek last Wednesday for the official opening of the first Din Tai Fung restaurant in Europe.
BreadTalk - through its indirect wholly-owned subsidiary Taster Food UK Limited - has an agreement with the franchise owner of the Din Tai Fung brand to operate the popular Taiwanese restaurant brand in the UK.
This interview took place soon after some 250 guests dined for the first time at the spacious two-storey restaurant in Covent Garden, where they feasted on the chain's signature dishes including xiao long bao (steamed pork dumplings), prawn and egg fried rice, and steamed chicken soup.
Another Din Tai Fung restaurant is on track to open its doors in London sometime in the middle of 2019, at the new Centre Point skyscraper in the heart of the city.
While London is the first stop for Din Tai Fung in Europe, Mr Chu says the plan is to venture outside the capital and eventually to other parts of the continent.
When asked to elaborate, he doesn't have a specific city to disclose, but he does let on that countries such as Italy, France and Germany are possible destinations.
Besides Din Tai Fung, Mr Chu says he is keen to introduce some of BreadTalk's other brands in the UK.
"We need to find the brand that's suitable for the palate (in London). One that we think will do well is our food court operations, and of course, our bakery," he says.
"We also have our joint venture brands - Song Fa Bak Kut Teh, TaiGai, Nayuki and others - where I also feel there are opportunities. A lot depends on how well we do Din Tai Fung. London is a 13-hour flight from Singapore, and I need to be sure before I bring another brand into this part of the world."
The BreadTalk Group is synonymous with many household names in the F&B sector - its portfolio includes its bakeries of the same name, Bread Society, Food Republic and Toast Box.
Mr Chu, who rejoined BreadTalk in 2016 as group managing director and was promoted to CEO in July last year, has been jetting around the world to identify new F&B concepts and potential partnership opportunities.
"Where we are right now, we are definitely hungry to grow. We're looking at markets within Asia, as well as Europe and the United States," he says.
"We're trying to find that balance in terms of time zone difference and travel distance, and more importantly, we need to have a good team in place before we venture beyond where we are today."
The first of two Food Republic food courts will open in the Cambodian capital of Phnom Penh later this month, which will be the seventh market for this brand.
There are BreadTalk bakeries across Asean in countries like Vietnam, Myanmar, Thailand and Malaysia.
Last year, BreadTalk entered into a joint venture with Japanese trading firm Shinmei Corporation, a partnership that Mr Chu hails for allowing his company to centralise and strengthen its procurement network.
The partnership with Shenzhen Pindao Food & Beverage Management is also bearing fruit, he notes. Two popular Chinese specialty tea brands have opened in Singapore - TaiGai at Nex, and Nayuki at VivoCity.
One challenging market on BreadTalk's radar is the US, and Mr Chu says breaking into the world's largest economy will be a real "needle-mover".
His team has visited the US many times already, and done their market research in places like New York, Texas and Los Angeles.
"The US is a big country, there's spending power, it's easy to do business there, so we see it as an opportunity. We're already very well-represented in Asia, so for us to move to the next level, we have to venture into areas we've not been to," says Mr Chu.
"For the US, we just need to decide how we want to operate it, be it through a joint venture partner, a franchise or other means, in order to make this business successful."