THE BREAD WINNER
Henry Chu has found a winning recipe to build the business of BreadTalk beyond bakeries. By Tanyatorn Tongwaranan
Nothing beats the smell of freshly baked bread from the oven. The heavenly aroma evokes pleasant childhood memories as it wafts through the kitchen air. It’s only a matter of time before you say, “Oh my God! That smells so good!” Anyone who has strolled past one of the hundreds of BreadTalk shops throughout the region knows the sensation. The Singapore-listed company had its beginnings as a boutique bakery in the Bugis Junction district of the city-state back in 2000. It boasted soothing oak wood decor, contrasted with a glassed-in kitchen where customers could see bread and pastries being baked fresh every hour.
The basic formula remains unchanged, but BreadTalk has since grown into a food and beverage conglomerate that also offers numerous other brands in nearly 1,000 outlets in all shapes and sizes in 17 countries, with a global staff of 7,000.
Headquartered in Singapore and China, BreadTalk Group Ltd was founded by chairman George Quek, who has 30 years of extensive experience in the F&B industry. CEO Henry Chu, who has more than 20 years of experience in (F&B) and retail as well as a financial background, has presided over an impressive period of expansion recently.
Mr Chu is preparing to step down at the end of this year — he has cited “personal and health reasons” — but when Asia Focus caught up with him recently in Bangkok, he spoke enthusiastically about the outlook for the business.
Mr Chu joined BreadTalk as group managing director before taking over as group CEO less than a year later to oversee global operations. He had previously served as CEO of BreadTalk’s bakery division from 2010-12.
Under Mr Chu’s leadership, the food empire has entered partnerships with notable brands such as the Taiwanese bakery Wu Pao Chun and Song Fa Bak Kut Teh, the much-loved and Michelin-starred herbal pork soup legend in Singapore. He has also led the group to expand into new markets, including London and Cambodia.
“On taking the position, one of the biggest messages that I sent to the company was about to change. It was change or die, I told them that we must change today or BreadTalk may eventually disappear,” the 49-year-old CEO says during a visit to the new Song Fa restaurant in CentralWorld in the heart of buzzing Bangkok.
“In the past, BreadTalk only had limited brands,” he says as he hands over his business card and flips it to the reverse side, pointing at the 10 logos.
“If you look at my business card, in the past it was just the bakery. But over the last two and a half years we created a new division called ‘4orth Division’, which encompasses food concepts and both self-owned and franchised brands, bringing in Din Tai Fong, Food Republic, S Ramen, Song Fa, Nayuki, TaiGai and Wu Pao Chun,” he explains.
With close to 1,000 retail stores spread across 17 countries, BreadTalk Group’s brand portfolio now comprises directly owned brands such as BreadTalk, Toast Box, Food Republic, Bread Society, Thye Moh Chan and The Icing Room, and partner brands such as Din Tai Fung, Nayuki, TaiGai, S Ramen, Song Fa Bak Kut Teh and Wu Pao Chun Bakery.
Revenue is generated by four business divisions: Bakery (47%), Restaurants (25%), Food Atrium (26%) and 4orth Division (2%).
The Bakery division consists of BreadTalk, Bread Society, The Icing Room and Thye Moh Chan with the total of 863 outlets, generating approximately 50% of group revenue. Food Republic comes under the company’s Food Atrium division with a total of 60 outlets, generating about 25%. Din Tai Fung comes under the Restaurant division with a total of 28 outlets, generating 25%. Lastly, the 4orth Division generates approximately 2% of revenue from 12 outlets.
“Consumers today are changing,” says Mr Chu. “I travel a lot and I see interesting brands that I think are relevant to us. When I travel, I pay attention to all the trends around me. I look at their business models and I look at long queues because when a business has a long waiting queue, they must be good at something.
“I will join the queue, taste the product and if I realise that the product is good, I look around, assess the market and see whether there are any similar concepts. Then when I find it is a match, I will meet up with the potential partners.”
Mr Chu elaborates further on the process that went into the group’s latest taste tie-up. “Before we signed Song Fa, I tasted all the
bak kut teh in Singapore and decided that Song Fa had the best quality,” he says. “When we met with them, I shared with them what the group is doing and what we could potentially do together to help each other.
“There’s a lot of convincing. So with every brand I can spend easily nine months or six months because we can’t push too hard — we need to let them think about it and then we follow up. That’s what I have been doing over the last two and a half years.”
In the first half of this year, Song Fa Bak Kut Teh operations in Beijing, Guangzhou and Bangkok delivered S$13.2 million in revenue compared with S$5.7 million in the same period last year.
Going forward, Mr Chu will continue to focus his resources on the expansion of key markets while continuing the effort to turn around the bakery business. The food atrium division will deepen its penetration in Mainland China, Hong Kong, Taiwan and Cambodia, while the restaurant division will be cautiously adding to its presence in Singapore and Thailand while managing profitability in the United Kingdom.
BORN FIGHTER
Mr Chu started his career early in life and has acquired extensive experience in the food and beverage and retail businesses over more than 25 years in many locations.
The middle child of three brothers, he started working when he was 12 years old, helping his uncle with his business. When he turned 14, which was the legal age to start working in the service industry in Singapore at the time, he started with Burger King, and later moved to Starbucks and Delifrance.
“We came from a very poor family. I had to work part-time during school holidays just to make money for the family,” he says, adding that during his youth, he would be taking orders and flipping burgers for a few dollars an hour.
He stayed in the F&B business, partly because he “loves to eat”, and he worked his way up reaching a managerial position by the time he as 27. He said there was no special trick to climbing the ladder.
“It’s definitely working hard and this is still important today. Working hard means I put a lot of focus into learning what I’m taught and at the same time I try my best to excel at my position,” he says.
By way of example, he says, when he was at Burger King crew, “I wanted to be Crew of the Month and I wanted to keep getting Crew of the Month to become Crew of the Year. After that, I could be a production leader, team leader and later be considered for a supervisory role.
“Basically I set myself targets. I tell myself how and when I need to be in the next position. I’m always planing for the future. That’s how I rose through the ranks,” he says.
In his 30s, he embarked on various successful overseas postings including operational director at Starbucks Thailand and Starbucks China.
In 2005, Mr Chu made a shift away from F&B after being recruited by Shell as a general manager for retail sales and operations and Shell Eastern Petroleum in Singapore, where he met Tan Sri Mokhzani Bin Mahathir, whom he describes as his best mentor and supervisor.
“He has always been a fantastic leader. As a non-engineer, scientist or chemist working in an energy company is different. He is very encouraging and I was given the opportunity to learn, grow and be promoted,” he said.
At BreadTalk, he tries to emulate this concept and ensure that his staff are provided with the opportunity to learn, develop and grow. “Developing them is very important and at the same time, it’s very important to provide them a chance to go up the ladder — just like what I was given.”
When I travel, I pay attention to all the trends around me. I look at their business models and I look at long queues because when a business has a long waiting queue, they must be good at something
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