What's eating the F&B industry?

What's eating the F&B industry?

Singapore's vibrant dining scene is always in a state of flux, but of late, it has been going through a shake-up.

There have been restaurant openings and closures, and splitting of partnerships within food and beverage groups.

Some restaurants are changing concepts and revamping spaces to offer something new, while others are tweaking and making variations to their menus, all in a bid to stay relevant to diners and keep abreast of the competition.

Indeed, competition is rife if figures are anything to go by. Last year, between January and November, there was a nett increase of 140 restaurants in Singapore, according to figures from the Accounting and Corporate Regulatory Authority, after taking into account the total number of openings and closures.

In terms of just openings, about 575 restaurants were set up in the same period last year, translating to about 52 restaurant openings a month.

Concept revamps and changing with the times

Restaurateurs say they revamp their eateries to keep diners coming back, or do away with concepts that do not work.

When they notice that palates are changing, they also adapt to keep their restaurants on diners' radars.

Take, for instance, Modern Asian Diner, better known as MAD at The GrandStand in Bukit Timah, opened by TungLok Group in collaboration with singer-songwriter Dick Lee. It will be transforming from an Asian tapas restaurant into one focusing on seafood and serving cocktails. The revamp, which will include the installation of live seafood tanks and redecorating, will take place by the end of this week.

Mr Andrew Tjioe, 55, executive chairman of TungLok, says: "We are tweaking the concept to make it more of a dining destination. It will be fun and interesting."

He adds that the space, at 8,000 sq ft, is too large and did not create the right vibe.

"Restaurants are in the business of making money and every business has to be profitable," he adds, when asked if the restaurant was undergoing a change because it was underperforming.

MAD recently opened an offshoot in Jakarta and Mr Tjioe says he may reopen it here, given the right space and location.

Other food and beverage outlets that have undergone changes recently include Burger Shack, a burger joint in Bukit Timah; Keong Saik Snacks in Keong Saik Road; and Commune Bistro at Phoenix Park.

Two weeks ago, Burger Shack transformed into Little Hiro, a HawaiianJapanese grill offering burgers, grilled items and teppanyaki rice bowls; while Keong Saik Snacks has a new concept and is now called The Study.

Little Hiro's owner, Mr Ian Kwok, 29, who wanted to share the HawaiianJapanese flavours and cuisine he discovered on a trip to Hawaii last year, says: "Burger Shack had been open for 4 1/2 years and I thought it was a good time to reward my customers for being with us and to show them we were willing to do something different."

Keong Saik Snacks, which opened 1 1/2 years ago and started out serving gourmet snacks such as hot dogs, changed its name and concept earlier this year.

A spokesman for the Unlisted Collection, which manages the restaurant, says the food offerings had evolved into more "contemporary British bistro fare" and changing the name seemed only fitting as the restaurant no longer served snacks.

The white interior has been painted dark grey and some of the chairs have been changed to make way for The Study, whose name also complements the bar next door, The Library, which is also owned by the same group.

Commune Bistro has changed its menu and has gone from being a cafe-restaurant that had Indo-Chinese influences to a more Western-centric one. It has also rolled out catering services and calorie-counted meal deliveries, given the shift towards healthier dining, and will be launching an online ordering site in the next two weeks.

Other concept changes include modern European restaurant Pamplemousse Bistro and Bar in Dempsey Hill, which shed its pompous and upscale atmosphere to make way for Pidgin, which offers more casual, Asian-influenced food, last year.

On closing Pamplemousse, its chefowner Adrian Ling says diners did not understand his original concept, so he decided to make the restaurant more casual and showcase South-east Asian flavours.

Consolidating and adapting to new trends

More shake-ups in the F&B scene include two that were announced two weeks ago.

The first was the departure of Sebastian Ng, chef and co-owner of 12-year-old Restaurant Ember at Hotel 1929 in Keong Saik Road, who will be leaving to set up a casual eatery. His partner for the new venture will be hotelier-restaurateur Loh Lik Peng, with whom he had set up Ember.

The second shock to the industry was the split between Deliciae Hospitality Management's founder Olivier Bendel and former Tokyo-based three-Michelin-starred chef Bruno Menard.

Both chef Ng and chef Menard leave their companies at the end of next month.

Mr Loh, 41, says: "There's a movement towards casual dining, but it's not that fine dining is dead, even though we have seen casualties such as Guy Savoy. Established ones such as Iggy's, Restaurant Andre and Jaan are doing well. However, to open one now might be tough as you can't get the qualified manpower you need."

Indeed, the shift towards more casual restaurants has plenty to do with the rising cost of manpower and labour shortage the industry is facing due to a reduction in the foreign worker quota and increase in foreign worker levies, in addition to changing consumers' dining preferences.

Mr Loh adds that the group is focusing on its smaller restaurants with counter concepts, such as Market Grill, Esquina and Burnt Ends. He says: "We're not dumbing down the food or going into fast concepts. We're concentrating on these restaurants because they are easier to staff. If you don't get it right early on, you won't survive in the current market."

As for the Deliciae group, Mr Bendel is looking to grow its three key brands - French steak and frites restaurant L'Entrecote, Spanish tapas bar Sabio and gourmet burger restaurant &Made.

His collaboration with chef Menard started two years ago, when they worked together to open &Made at Pacific Plaza and French brasserie La Cantine at Asia Square.

The future of La Cantine remains uncertain as its Asia Square location is "challenging" and has only good lunch traffic, Mr Bendel says.

New developments for the group include the opening of L'Entrecote in Bangkok in the coming months. Next week, it will also open Pisco South American Kitchen & Bar, in partnership with Resorts World Sentosa.

The 75-seat casual restaurant-bar, headed by the group's executive group chef Damien le Bihan, will feature traditional South American dishes as well as pisco (popular grape brandy commonly produced in Chile and Peru). The average bill a person is about $50.

Mr Bendel, 43, says: "Restaurants are going back to authenticity, with a focus on small and casual restaurants that are less expensive, and doing something specific which is easier to operate. Even three- Michelin-starred chefs are doing casual concepts."

As for chef Menard, 51, who has plans to become a Singapore permanent resident, he is looking to set up a 12-seat eatery, what he calls an "incubation centre for local talent", to include not only food, but also to showcase photography and artists.

Closures and contributing factors

Closures of late have been due to a combination of factors including passing food fads, a lack of funds, manpower shortages and rising rentals.

Chef Issachar Lee, 38, closed his Spanish restaurant Kaixo in Tanjong Pagar Road yesterday. Manpower woes aside, his three business partners have also pulled out, leaving him with no choice but to cease operations.

He says: "I'll stick to European cuisine, since I'm trained in that. But I'm not sure if I'll still do a tapas bar, even though we had good feedback and regular customers. The trend was much bigger two years ago but the number of diners has decreased.

"Also, with my partners wanting out, unless I have an investor, I don't have enough funds to continue."

Les Amis Group's high-end French restaurant Au Jardin at the Singapore Botanic Gardens, will be closing when its lease ends later this month. It opened in 1998.

The group's spokesman, Mr Raymond Lim, 36, says: "The cost structure for running casual dining is lower. Fine dining is like a pyramid, the higher you go, the smaller the market. The trend is still on the hipster joints that keep popping up, so we will stick to replicating our successful concepts this year."

Tweaking of menus

In a competitive dining environment, keeping a pulse on what diners want is imperative, restaurateurs say.

The Les Amis Group conducts meetings once every quarter to discuss menu revamps. Its latest menu update is at its Vietnamese noodle bar chain Nam Nam, which features new flavours for the banh mi and noodle selection.

Mr Lim says: "Diners want something that is constantly evolving, fast and value for money. Even though we have long queues at Nam Nam and don't have to change anything, we still need to evolve."

Restaurateurs say it is important to accept feedback and implement ways to try and accommodate diners, especially when business is not brisk.

For instance, Mr Yuan Oeij, 44, chairman of the Prive group, which owns Wolf in Gemmill Lane, realised he needed to tweak his restaurant's nose-to-tail dining concept as it was not resonating with diners - it was "performing below expectations".

He says: "We realised soon after opening that people saw us as a restaurant that served only 'funny' parts of animals and that it was only for the adventurous. So people who were not used to offal served in a Western context did not think about trying Wolf. People forget that nose- to-tail consists of nose, body and tail."

The restaurant's pork chop, Iberico pork ribs and pork belly found favour with diners, so it decided to expand its menu to become more pork-centric, as well as offer other non-offal items, from steaks to seafood to poultry, to appeal to a wider cross- section of diners.

Bincho, a four-month-old yakitori bar in Tiong Bahru, opened by the Unlisted Collection, also had to expand its chicken- centric yakitori selection to cater to the tastes of more diners. Earlier this year, it introduced beef and vegetable options.

Tweaking menus, says Ms Cynthia Chua, 43, founder and managing director of The Spa Esprit Group, which is behind eateries such as Argentinian restaurant Bochinche, Tiong Bahru Bakery and Skinny Pizza, is very important because one needs to take action if something does not work. "Sometimes you think something will take off, but it doesn't and you can't be afraid to change things to get things right."

When she opened Common Man Coffee Roasters in Martin Road last year, for example, she thought petite cakes would bode well with diners, mirroring a trend in cities such as Melbourne, but Singapore diners still preferred large, hearty slices of cake.

Ms Eve Felder, managing director of The Culinary Institute of America, Singapore, says: "There are concepts and cuisines that might not work. Restaurant operators have to be very aware of what will differentiate their concept from others and attract a clientele. They need to do their market research prior to jumping into the very challenging world of business.

"Having different concepts allows them to maintain a robust business portfolio."

Looking into expansion overseas

The high costs of running businesses here due to increasing rentals and higher manpower costs, compounded by a shortage of labour in the F&B sector, are driving many home-grown restaurants to look for opportunities overseas.

Aside from the Les Amis Group's new barbecue bar which will open at Shaw Centre in the coming months, and two more Nam Nam Noodle bars here, all of which the group had committed to last year, it has otherwise no intention of expanding locally, Mr Lim says.

Overseas, it will open a Japanese and a Chinese restaurant in Ho Chi Minh City; three restaurants under one roof in Yangon; and its first franchise for Bistro Du Vin in Manila. All openings take place this year.

Ms Chua adds that it is also becoming "harder to operate food businesses here".

Her sentiments are echoed by some restaurateurs who say that profit margins for F&B businesses have decreased from more than 20 per cent to about 10 per cent over the last two years due to rising costs. The time it takes to break even, restaurateurs add, has also increased. Whereas it may have taken three to six months in the past, depending on the start-up capital, now, it may take in excess of a year to recoup the initial outlay.

Ms Chua adds: "There is no point in putting the same amount of energy into a concept here when we are being squeezed by manpower shortages and high costs."

She may be looking to take her food ideas overseas and cites cities such as Bangkok and Bali that are hungry for new ideas.

Survivng the times

Restaurateurs foresee that growth in the number of new restaurants will slow down.

Those who are desperately trying to stay afloat by offering discounts will affect the market by creating a price war among restaurants. But restaurants with good concepts, good value and good food will weed out the competition.

Mr Tjioe, who is also the president of the Restaurant Association of Singapore, says: "Dining patterns change and people tend to dine out more. There are more choices in the market, but diners have only so much money that they can afford to spend."

In the end, he adds, it will be a case of "only the fittest survive".

Ms Chua says: "These days, it isn't just a restaurateur's issue, whether he or she can survive. It is a national issue, because if restaurants can't survive, it is ultimately the consumers who lose out."

rltan@sph.com.sg
euniceq@sph.com.sg


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