Huggs Coffee carves new path with first outlet in residential estate

AFTER 13 years in the Central Business District (CBD), homegrown coffee chain Huggs Coffee is expanding into the neighbourhood with a brand new look.

Opening this Friday, its newest and 20th outlet at Thomson Plaza marks the company's first foray into the suburbs.

Equipped with private pods and an amphitheatre-like seating, the new store seeks to woo customers working from home with its new branding as a "community-lifestyle integrated cafe", said Lee Haoming, managing director of Huggs Coffee. (see amendment note)

Envisioned as a space for patrons to work, play and host events, the new store will also feature a member's lounge with noise-cancelling headphones available for users to borrow.

The opening is a timely and coincidental one given work-from-home has become the default again as Singapore returns to Phase 2 of its Covid-19 measures.

"If people are not coming to the business parks and business districts, (then) we are going to them," said Mr Lee, "We want to create a second home for them."

Mining opportunities in a crisis

The venture into a new territory, Mr Lee added, comes as part of the company's plans to "stay relevant in the current situation".

He decided that changes were necessary after seeing 90 per cent of its revenue vanish overnight when the country kicked into circuit breaker mode last year.

Huggs lost most of its footfall from the business district as workers could not return to the office.

Though the crowd eventually returned as social distancing measures were eased, new problems presented itself in the form of higher costs - particularly in manpower, freight and shipping costs, which rose about 30 per cent.

However, Huggs was determined to keep the business afloat, despite the mounting difficulties it faced and the challenging business outlook that crippled many small businesses.

"With Covid-19 resetting most people's lives... it (actually) gave us a more levelled playing field," said Mr Lee, who added he did not want to wait until the pandemic is over before taking the next step, "We just said that, 'You know what, we got to try.'"

Taking the plunge

Traditionally a brick-and-mortar coffee chain, the company has since expanded online to launch its own reward system, with an e-catalogue on the way.

In total, the company had spent more than S$1.5 million for its revamp. This includes the opening of the upcoming Thomson Plaza outlet; as well as another one at Maxwell Road in the third quarter of the year, which will house an urban farm to fulfil its farm-to-table concept.

To fund its expansion, the company had tapped its past reserves, utilised grants from Enterprise Singapore and also taken out loans.

But Mr Lee believes that changes are necessary, given how consumers' needs and preferences have changed.

"It's about innovation for us, about enhancing productivity as well as customer service and experience because consumer behaviour has changed a lot since Covid-19."

The company is moving forward with digitalisation plans, with a new AI-enabled roastery for its new headquarters in Tai Seng, which is to be operationally ready in August 2021.

The new machine, which is able to chart coffee notes and acidity as graphs and charts, will enhance and improve efficiency for the company's research and development efforts when roasting its coffee beans, said Mr Lee, who is also the co-founder of pop-up market concept Artbox Singapore.

Huggs' appetite for growth does not stop here. Founded by Ron Choo in 2008, it also has its sights set on overseas markets, particularly China, Thailand and Malaysia. Its outlet in Kuala Lumpur International Airport however, is taking a backseat due to restrictions from the Malaysian government as the country continues its battle with Covid-19.

"The vision has always been to be a global brand... to inspire and uplift the (coffee) culture, even if it's just one cup, one community or one experience at a time," said Mr Lee, who currently manages Huggs Coffee with business operations director Ben Choo, who is a second-generation leader in the business. (see amendment note)

"It's not easy to do a business, but it's not impossible. If you do it with the right partners and collectively think out of the box, you just might be able to go through with it."

Amendment note: An earlier version of this article mentioned that Thomson Plaza was Huggs Coffee's flagship. It is in fact not the flagship store.

Amendment note: Lee Haoming is the co-founder of Artbox Singapore, not Artbox Asia. Ben Choo is the business operations director of Huggs Coffee, not general manager.