Moving hawkers up the food chain

IN SINGAPORE'S competitive hawker trade, where the unsuccessful throw in the towel and close down within a few years – months, even, names like Fei Siong, Liao Fan Hawker Chan and Li Xin Teochew Fishball Noodles stand out. Among the 13,882 licensed hawkers here, according to official statistics in 2019, few have lasted as long or done as well as those heritage brands. Li Xin, for instance, has been in business since around 1968, when it was just a pushcart stall.

But what's also notable about those famous names is how they have become chains or part of big businesses. Li Xin has 15 outlets across Singapore today. Gao Ji Food, which started out selling Koo Kee Yong Tow Foo Mee, has 63 food stalls and restaurants in Singapore and overseas.

Is this the way forward to ensure the survival of the hawker culture in Singapore, as the image of the individual, independent hawker fades away without any succession plans?

There are undoubtably advantages to commercialising and expanding the business of selling comfort, everyday food. The first is the idea of exploiting economies of scale to lower the increasing costs - rent, manpower and food - that hawkers face today.

Collin Ho, who grew Western food chain Collin's from a coffeeshop stall, attests to this: "I used to buy ingredients for two to three stalls only, and the supplier would send the items to the individual stall. That was more expensive than bulk purchase."

In contrast, Collin's is now able to serve premium food, such as New Zealand king salmon and black Angus beef, while continuing to keep prices affordable for customers.

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Another benefit is, of course, being able to grow the brand and continue the legacy. For instance, should Michelin-starred hawker Chan Hon Meng, who is 55 now, retire from helming Liao Fan Hawker Chan one day, the soya sauce chicken rice franchise will still continue in the hands of Hersing Culinary, the business that bought the Liao Fan brand after Mr Chan was awarded his Michelin star.

Yet there are reasons why seasoned hawkers drawn to the idea of commercialisation also hesitate to jump into it. Much of it has to do with maintaining the quality of the food and finding the right partner with the operating experience and financial strength.

"We see that some brands that tried to franchise failed because they couldn't control the quality. They didn't have the operating experience," says Melvin Chew, second-generation hawker of Jin Ji Teochew Braised Duck & Kway Chap.

"And if they fail, the focus won't be on the person who took their branding - it will be on them. They won't say the franchisees failed, they will say Jin Ji failed. It will leave a bad mark."

Some consumers also have the mindset that the taste will go south when they see that a single stall hawker has expanded, Mr Chew notes.

Kay Lee Roast Meat Joint is an oft-cited case of commercialisation gone wrong. In 2014, the founders sold their business for S$4 million to electronics firm Aztech Group, which had reportedly made plans to roll out at least 10 restaurants. However, the brand now has only its original stall.

As a chain or big business, there will also be new issues and costs to grapple with, such as hiring staff, managing the supply chain and licensing. "The recipe is the smallest and easiest part of the expansion plan," says Makansutra founder KF Seetoh.

Indeed, Mr Ho, whose Collin's chain hit an annual revenue of S$25 million in 2019, recounts: "There was a year we opened three to four outlets in one go, which needed a lot of concentration. There were no holidays."

There's also the ugly side of growing a chain from a family business. Take the ongoing court tussle over Eng's wonton mee noodle business between the children of the man who founded the business and a business partner.

Alan Goh, who built F&B group Katrina from a nasi padang stall in a foodcourt, puts it this way: "An individual running your own stall and running a chain are different things. The first is like rowing a boat, where you're in control. The second is like running a ship, where you have so many other considerations. The purpose and vision are different."

The prospects of commercialisation have also drawn young entrants, keen to follow in the money-making footsteps of Fei Siong and Hawker Chan, to the industry.

The Tan brothers behind Fei Siong recently made the headlines for turning the fishball noodle hawker business, started by one of them, into a food empire which made nearly S$150 million in revenue in 2019.

But whether this will truly help to preserve the hawker culture is a question.

"You'll realise that when young people go into the hawker trade, they want to do something that can be easily duplicated, like fishball noodle or bak chor mee which can all be prepared in a central kitchen... you won't see them want to do char kway teow," says Jin Ji's Mr Chew, who is also a mentor in the government's hawker development programme. The Business Times talks to three famous hawkers to find out why and how they expanded.

Li Xin Teochew Fishball Noodles First expansion attempt ended in four months

Li Xin Teochew Fishball Noodles, which started out of a pushcart in 1968, has 15 outlets across Singapore today. But Eddie Lim's first attempt to expand his father's business ended as quickly as it started.

This was in 2006, when Mr Lim, then in his mid-30s, had taken a break from work and was helping out at his parents' stall in Toa Payoh. His friends had gone to try the food and suggested he do it full-time.

Although he had "never wanted to be a hawker" after seeing how difficult it was for his parents, Mr Lim saw the potential. "My parents built up such a loyal customer base over the years that even before they lift up the shutters, customers are already waiting outside," he says.

He soon opened an outlet, only to shut it four months later to cut his losses. "Helping him, seeing it is one thing. When you do it full time, everything on your own, it's very challenging."

A few years later, Food Republic approached Li Xin to open in its foodcourt at ION Orchard. Seeing that it was a good location, Mr Lim decided to quit his job as a car dealer and rope in his cousin to give expansion another try. His father also closed his stall for nearly a year to teach them his trade secrets.

The first day was a disaster, Mr Lim recounts. Li Xin's fishballs had been made by his father, using estimation, for many years. So when the fishballs were made in a new environment, using new machines and ingredients and in a different temperature, they could not set.

Mr Lim says it took them about a week to eliminate all the issues. He also started documenting everything, from the ingredients to the methods.

Li Xin opened more outlets over the years. When the brand had its fourth outlet, the cousins also invested S$400,000 to buy and convert a factory space into a central kitchen, to support the expanded operations.

Still, being a chain brings about a different set of problems. One of the biggest challenges, and which remains today, is maintaining the food consistency and quality.

Says Mr Lim, now 51: "I know whether I have a good product or not. But can I maintain the consistency so that I do justice to the brand even if I grow to 10, 15 outlets? I'm doing OK, but it can be better."

He adds that it can be frustrating to receive feedback on customers on Li Xin's food. "How come 10 years in the trade and I still didn't get it right? Is the customer being critical or saying something true? If so, how can we make our product more consistent and get less feedback?"

Automation will be the way to survive, Mr Lim says, especially as hawkers and food establishments are also facing a labour crunch. It will be his focus this year, and Li Xin has already prototyped and trialled a sauce dispensing machine at an outlet. He is also in talks with Enterprise Singapore for funding support.

Overall, Mr Lim is also open to partnerships, but he currently does not intend to sell the business.

In 2017, at the last minute, he backed out of a deal to sell Li Xin's chain of Teochew fishball noodle stalls and related food manufacturing business to catering company Neo Group. "It's like realising that this is not the right life partner just before you get married," Mr Lim says.

He also realised that there is more he wants to achieve for the brand. "To cash out and walk away is very tempting, but I find that a lot more can be done," he says. "If the right partner comes along, we could work together, but I won't sell the whole business."

Liao Fan Hawker Chan A second wind at 51

At an age when some people may be making plans for retirement, Mr Chan instead pursued an opportunity to turn his hawker stall into an international chain.

In 2016, he had received multiple offers to buy his recipe for soya sauce chicken rice or do business, after his hawker stall in Chinatown, Liao Fan Hong Kong Soya Sauce Chicken Rice & Noodle, was awarded a Michelin star.

Mr Chan, then 51, eventually signed a deal with Hersing Culinary, seeing how it had successfully taken Hong Kong's Tim Ho Wan regional. The other suitors did not seem to have as much experience in overseas expansion, he says.

Liao Fan was rebranded to the more catchy Hawker Chan; Mr Chan also travelled overseas with Hersing to market the brand. By 2019, the brand had 25 outlets in Singapore and overseas, which turned over S$27 million in total.

Asked if he was concerned that age would take its toll, Mr Chan, now 55, tells BT in Mandarin that on the contrary, he is not as tired as when he was a hawker by himself, as there is a partner helping him.

Regardless, he was keen to take the plunge as he had never tried to grow the brand, least of all with a big company. The partnership has also given him the experience of being a "small boss".

"It would be one of my life's highlights, so why not give it a try? It would be a waste if I didn't," says Mr Chan, who left his home in Ipoh when he was a teenager in search of work in Singapore.

However, he has a word of caution for aspiring hawkers attracted by the prospect of making it big like Hawker Chan and its peers. "If you want to earn this kind of money, you must first ask yourself, how much are you willing to toil?"

When he first started hawking in Chinatown, Mr Chan was not sure if customers would take to his soya sauce chicken, developed from his experience working in Chinese restaurants and foodcourts. So, he priced his food cheaply - S$2 for chicken rice, S$2.50 for noodles - to draw customers.

He also worked long hours, from 5am to 5pm daily, while enduring insults, complaints and difficult requests from customers.

When business picked up, he struggled to recruit helpers. At his peak, before receiving the Michelin star, Mr Chan says he was earning six times the pay of a hotel chef. "But if I continued, I would have ended up in hospital."

These days, Mr Chan tackles different issues in the running of his chain, with his job mainly about quality control.

One practice that he has maintained is that of making sure that the chickens are only sold on the same day that they were cooked, at every outlet. The limited quantities mean that some outlets may sell out before the closing time, resulting in unhappy customers. But "I would rather not earn the money than sacrifice the quality", Mr Chan says.

Becoming a chain has also not spared the brand from crisis. Hawker Chan's sales continue to be affected by the lack of tourists amid the coronavirus pandemic, and safe distancing measures to curb the spread of the virus here.

Some foreign chefs also returned to their home countries during the pandemic, and have not been able to come back, resulting in a shortage of manpower.

As a result, Hawker Chan will continue expanding here this year, but on a smaller scale and with a shift towards foodcourts, where there is more foot traffic and seating space, says Mr Chan. It opened a stall at the Kopitiam foodcourt in Tampines Mall last November.

Gao Ji Food 67 years in the business and going

The key to Gao Ji Food having survived nearly seven decades is adaptability and persistence, says managing director Chong Yik Hwee.

Indeed, the Gao Ji today, with 56 outlets in Singapore and seven overseas spanning various food brands, is a vastly different animal than the Koo Kee Yong Tow Foo Mee hawker business Mr Chong, 67, inherited from his father in 1968.

And even now, "the question is, how can we use 2021 as a chance to reinvent the business," says Mr Chong, whose company recorded S$27 million in revenue in 2019. This year, as the coronavirus pandemic goes on, he has told his management team to make the company leaner, by shedding underperforming businesses and streamlining operations.

Gao Ji is also venturing into e-commerce by selling its ready-made yong tau foo online, to target the people working and cooking at home. Meanwhile, Mr Chong is keeping his eye out for good locations in shopping malls.

"So in 2021, I think let's not worry, still can make money," he says in Mandarin. "But all this also relies on us having a good management team. I can come up with the ideas, but I would need the team to execute them."

Koo Kee was first called Tong Kee, named after Mr Chong's father who started out in Chinatown in 1954, the year Mr Chong was born. At 12, Mr Chong started picking up the skills of making Hakka yong tau foo from his father.

In 1965, Mr Chong's father was hospitalised for exhaustion and died on Aug 9, the day Singapore became an independent nation. Mr Chong's mother continued the business; Mr Chong quit school in 1968 to work with her. He says his mother did not like the sound of Tong Kee and suggested they change the name to Koo Kee.

In the '80s, Mr Chong started to explore the idea of franchising. Koo Kee was doing well and would draw queues wherever they opened. "With the franchise, I bought a condominium, then I bought a Mercedes. I thought to myself, this is not bad," he quips.

At the end of the '80s, when more shopping malls and retail spaces were built, he decided to stop franchising the business and open stalls in foodcourts and coffeeshops himself. Gao Ji was formally set up in 1994, along with a central kitchen. Then during the Sars crisis of 2003, Mr Chong spied an opportunity for Gao Ji to enter the restaurant segment, even as he had to sell one of his properties to pay his employees' salaries. Chefs were willing to work for lower pay and landlords offered lower rents, so Gao Ji opened a few restaurants here.

Gao Ji later set its sights overseas, and expanded into Beijing and Jakarta in 2015 and 2017, with the support of a management team that Mr Chong recruited in 2013. "I listened to the government's call for us to expand as Singapore is too small a market, but I never had to use their grants," he says.

Mr Chong and his company are still going strong. During the interview, Mr Chong says this a few times: "Every 10 years or so, you might hit an obstacle that you feel you cannot overcome. You just have to find ways to solve the problem, and to change with the times."

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