Zen reshuffles expansion to focus on seven brands
Zen Corporation, the operator of Zen and Aka Japanese restaurants, has revised its food expansion plan, part of a recent effort to overcome the impact from the coronavirus pandemic.
Boonyong Tansakul, the company’s chief executive, said the company will focus on seven core food brands that are projected to have growth potential and have survived the pandemic unscathed.
They are Zen, Aka, On the Table, Tummour, Khiang, Din’s and Lao Yuan. The company operates 13 food brands.
According to Mr Boonyong, the company will no longer open new branches for its second-tier food brands such as Jaew Hon, Pho and Musha. These brands will be sold via cloud kitchens, he said.
Zen has 30 cloud kitchens in Bangkok and aims to have 60 by the end of this year.
Each cloud kitchen will offer at least two food brands under its portfolio, depending on location.
The company is also ceasing operations of Foo Flavour, its own brand, just one year after establishment. The space taken by Foo Flavour restaurant at The EmQuartier was replaced with a mini On the Table restaurant, while that at CentralPlaza Ladprao will be replaced with a Din’s branch.
In addition, Zen has restructured its management, appointing two chief commercial officers to handle Thai food and Japanese food for cost management efficiency.
Previously there were 13 separate management teams overseeing each food brand.
The new structure helps reduce costs for raw material purchases and sales promotions.
Mr Boonyong said Zen reduced its investment budget by half to 100 million baht this year, with the majority of the budget allotted to develop IT systems and renovate existing stores.
“As customer traffic at restaurants is no longer the same, new restaurant spaces will be reduced to 150 square metres from 200 sq m,” he said.
Mr Boonyong said Zen’s overall sales have gradually increased by 10-15% for every phase the government has relaxed lockdown measures.
The company expects sales to recover to 90-95% of pre-pandemic levels in the fourth quarter this year.
Zen projects sales will contract by 15% this year, beating an earlier projection of a 30% fall.
He also forecast the value of Thailand’s 400-billion-baht food business to fall by 10% this year.
“We are not particularly worried about a second wave of outbreaks because Thais have prepared themselves quite well,” Mr Boonyong said.