Ya Kun's tradition in transition

Ya Kun's tradition in transition
Adrin Loi, Executive Chairman, Ya Kun International Pte Ltd.
PHOTO: The Business Times

As the weekend rolls around at long last, imagine if you will, the leisurely breakfast you will have. You might get some crusty bread topped with a lustrous green spread, alongside some runny eggs that wobble just so. These, you will wash down with a nice, strong brew. Now, at this point, the sort of breakfast that you picture says a fair bit about Ya Kun Kaya Toast's future.

While an older crowd might imagine the venerable trio of kaya toast, soft-boiled eggs and kopi, there is a good chance that millennials are fantasising about smashed avocado on rye bread, poached eggs and a latte instead. Today, Adrin Loi, the youngest son of Ya Kun's founder, is the man facing down the trendy tidal wave of buckwheat pancakes, quinoa bowls and cold-drip yuzu coffee.

In an age of Instagrammable food and changing consumption patterns, the 61-year-old executive chairman of Ya Kun International is not blinking.

He believes that while young people may turn to Western concepts of brunch as an occasional treat, they eventually return to their roots when they get older.

"I'm not so worried about this trend, because this is the path of young people.

I'll give you an example: once in a while, we will eat in a restaurant, but on normal days, we have to eat ordinary things.

There will come a time when the student starts working, have their own families, then they will learn to cut costs," he says.

There might be more competition on the breakfast front today, but Ya Kun's top line continues to grow, thanks to people who want to keep eating "ordinary things".

From 2010 to 2016, its revenue has increased by about 10 per cent to 15 per cent on a yearly basis.

At the same time, Mr Loi is looking to pass the baton to his son, Jesher Loi.

Having joined the business in 2011, the younger Mr Loi is currently the company's director of branding and market development.

"The plan is for him to assume the executive role in five years' time," says the elder Mr Loi.

In a separate chat with The Business Times Weekend, the younger Mr Loi says that he feels "blessed" to be in such a position. But he knows that the path forward will not be easy.

"I feel the weight of what lies ahead. That will be my responsibility. In the last five years, I see the role it plays in people's lives. We are more than just a coffee provider - we are a memory creator."

The challenges he faces will be different compared to those faced by the generations before him, but like his father, he is optimistic about the company's ability to keep up with the times, find its niche and grow its pie.

The Ya Kun story

The business was started by Mr Adrin Loi's father, the late Loi Ah Koon, who had left one island - Hainan Island - for another - Singapore - in 1926.

After learning the tricks of the trade as an assistant at a Hainanese coffee stall, he went into business for himself with two fellow Chinese immigrants, starting up a coffee stall at Telok Ayer Basin.

The partnership did not work out, but he decided to press on alone, serving coffee, tea, eggs and kaya toast - the same staples that present-day Ya Kun is known for. It later moved to one of the stalls at Lau Pa Sat, where it was open for business 24 hours a day.

Mr Loi explains that in his father's time, the real business came in around midnight. The stall was located near the stock exchange, and brokers and traders who dealt with different timezones would walk over to grab a bite there.

There were also those who drove down to Lau Pa Sat for supper after a late night out, Mr Loi remembers.

"My dad and mum worked overnight when I was quite young."

He remembers, too, how his father would often sleep over at the wooden table in their Lau Pa Sat stall so that he would be the first person up to serve customers, and also to make sure that no one would damage the stall.

Despite the toil and long hours, Mr Loi's father continued to dedicate his life to his trade, only stopping in 1998 because of health.

Mr Loi says: "I thought to myself at that time, this brand that my dad built is quite amazing.

Because of this simple business, he raised eight children with proper education, with no shortage or need."

It was also in 1998 that he and his older brother, Algie, decided to take over the coffee stall. As Lau Pa Sat was being revamped then, the brothers decided to move the stall to a "small, simple shop" at Far East Square.

Mr Loi says: "My brother had been helping my dad for many years; it's a breeze for him to continue doing it. So I said I will help think (about business strategy)."

At the time, Mr Loi had an 80 per cent stake in the business, while his brother took 20 per cent by mutual agreement. Today, Mr Loi declines to give an exact number, but owns the majority of the shares.

But while they had some experience making coffee and toast from their days of helping out at their father's stall, they knew little about actually running a business.

Thankfully, the rest of his siblings and their partners threw their weight behind the duo, and helped them when they first started.

Reflecting on that period of time, Mr Loi is visibly moved. "It was quite challenging in the beginning, but it was also a blessing. Even though I am the youngest, none of my siblings have ever showed any animosity towards me running the business. In fact, they gave their moral support."

It helped too that the brand bore their father's name, so all of them were working for a common purpose, says Mr Loi.

Within two weeks of opening, the "small, simple shop" at Far East Square had broken even and queues snaked out its doors.

Read also: Actor Chow Yun-fat spotted at Ya Kun kaya toast outlet in Singapore

Growing fast and furious

At that point, the Lois made several decisions that would shape Ya Kun's future.

The first was to concentrate on their core products and make them well. While there have been new additions to the menu, the focus has always been on their signature items, which are known for being remarkably consistent throughout their outlets.

The second was to grow the business quickly.

"One of the fastest ways of building a business is to make it popular. We were thinking at that time: do we want fortune or do we want fame? So we decided on fame, because of my dad's name."

They decided to capitalise on Ya Kun's rising popularity, and soon, they started another outlet at Tanjong Pagar. From there, their fortunes soared. To date, the brand has more than 50 outlets in Singapore, with one-third of them being franchisees.

Their franchise model soon led to the first overseas Ya Kun outlet in Indonesia, in 2002. Now, Ya Kun has a presence in eight countries, with more than 50 overseas stores.

Some of their overseas franchisees, Mr Loi adds, have been with them for more than 10 years. And some locations such as Indonesia, China and South Korea have been performing "exceptionally well".

During the interview in late-December, the company was in the final stages of talks for outlets in Japan. According to Mr Loi, there have also been enquiries from Malaysia, Australia and the US, which the company is considering.

Asked if a public listing is in the horizon, he says: "Not right now. We see a lot of companies going for IPO, but in the end, they end up delisting. We'll just do what we do. When the time comes, we'll see."

Having built a brand overseas means that Ya Kun is also popular with tourists. In fact, busloads of them are dropped off at their flagship Far East Square outlet to sample Ya Kun's famed kaya toast, eggs, coffee and tea.

Bottles of their kaya also fly off the shelves - up to 1,000 a month - as gifts or for the tourists' own consumption when they get home.

Despite the rapid growth, Mr Loi is mindful of the need to grow the business sustainably.

When he and his brother took on the business, they tried not to borrow from any banks, he says. Whatever that was earned was ploughed back to grow the business.

"Our philosophy was a bit different. We grew at a pace we were comfortable with to prevent headaches. If you start borrowing from banks, the motivation for you to gain more to pay it back will be stronger," he says.

The test of time

Today, almost two decades since the second generation took over, Ya Kun has become somewhat of a Singapore institution.

Depending on a stall's location, you can either spot workers queuing for their post-lunch dose of caffeine or retirees leisurely munching on toast and sipping tea.

Ya Kun deliberately keeps its prices mid-range - more expensive than typical kopitiams, but cheaper than Western coffee houses - so that it can reach the masses on a daily basis.

Even as Mr Loi is intent on having Ya Kun withstand the test of time, the chain has felt its inevitable passage. Moving into the mainstream mall space, for example, required some changes to Ya Kun's operating model.

For one thing, the charcoal traditionally used to grill their toast could not be used anymore, and electric grills have to be used instead. Secondly, as rent was higher, additional items had to be added to the menu to sustain the business.

"We came up with a variety - kaya balls, steamed kaya bread, French toast, cheesy French toast, cheese dips, crackers - all based on toast. We try to have a variety to cater to everyone's needs," says Mr Loi.

At the same time, Mr Loi's siblings have also either retired or help out on an ad-hoc basis, so they have turned to professional management to run the business while his son, Jesher, is being groomed to take over.

But even with succession plans in place, an internationally recognised brand and a faithful following, Ya Kun is not immune to the headwinds of the F&B trade.

Not only does it grapple with the usual woes of rent, manpower and material costs, it also has to deal with the fickle nature of consumer tastes and competitors.

Starting a kaya toast coffee stall had not required particularly high start-up costs in the past, which proved a double-edged sword for Ya Kun.

While it boosted their expansion plans, it also meant that barriers to entry were low.

Ya Kun might have pioneered the mid-tier kaya toast joint concept, but these days, similar concepts specialising in kaya toast are a dime a dozen. Even when Ya Kun expanded to shopping malls from shophouses, their competitors followed suit.

Mr Loi notes, too, that business conditions are very challenging and discouragement sometimes sets in.

While he is certain that kaya toast and kopi will have a future as they are part of the local heritage, the competition will be very great.

Despite this, Mr Loi has an unwavering belief that as long as they focus on getting their fundamentals and values right, the rest will fall into place.

"We have no fear about it. I always tell my staff if there is no challenge, there is no motivation. We just maintain our core products, get the service right, and we can be excellent in whatever we do."

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LONG before Adrin Loi, the executive chairman of Ya Kun International, joined the business, its renowned kaya was handmade by his mother Neam Kia Shai.

She had perfected the recipe for kaya, a local spread made of eggs, pandan and coconut, to go with their crispy, charcoal-grilled toast.

Even after she passed on in 1989, the recipe was retained by family members. Today, it is produced in their kaya factory.

Their bread is from a traditional, more manpower-heavy bakery where some processes are still done by hand.

Their coffee used to be roasted by the founder, the late Loi Ah Koon. Coffee beans were the typical Robusta variety, which were roasted together with Planta-brand margarine and sugar at the back of the stall.

Today, due to the sheer volume of caffeine needed in Singapore, the coffee beans are roasted by a supplier.

Then, there is the matter of Ya Kun's famed soft-boiled eggs. Anyone who has tried them would have been struck by their globular perfection.

In any given serving, two extraordinarily large yolks are enveloped by egg white that is barely set, just past the point of translucence.

There are whole forum pages online dedicated to the matter of reproducing "Ya Kun eggs".

When pressed for the secret of their consistently produced soft-boiled eggs, Mr Loi says that it's just a matter of the getting high-quality eggs, the right water temperature and the right timing.

While there are machines in the market that make soft-boiled eggs, he says this method "doesn't do so well".

In Ya Kun, there's a standard operating procedure for making the eggs which workers are taught.

Mr Loi adds: "During training, we lose 80 to 100 eggs, but it's okay. It's part of their training. We train until they're perfect."

To spread their eggs around in different baskets, so to speak, their eggs come from both local and Malaysian sources.

Unlike many other places, Ya Kun breaks open the eggs for customers to show them that the eggs are cooked perfectly.

"If they are not to your liking or expectations, we can replace them for you, no questions asked," says Mr Loi.

In any given serving, two extraordinarily large yolks are enveloped by egg white that is barely set, just past the point of translucence.

There are whole forum pages online dedicated to the matter of reproducing "Ya Kun eggs".

vshiao@sph.com.sg


This article was first published on Feb 18, 2017.
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