SINGAPORE: Andy Hoon has Singapore’s ‘kopitiam king’ as his dad, but the ambitious 34-year-old would rather strike out on his own selling Philly cheesesteaks at Yellow Submarines and bubble tea at Ochado.
For Andy Hoon, expanding the family’s kopitiam business apparently was not enough. The 34-year-old co-founded the local fast-food chain Yellow Submarines on his own dime in 2013. That is because he does not want to be seen as just a rich man’s son, riding on his father’s coat-tails.
“I wanted to step out of my father’s shadow,” says the second eldest son of the family. “He has achieved success in his kopitiam or traditional coffee shop business, so whatever my siblings and I do, we will always be in his shadow. That is why I wanted to do something to prove myself,” says Andy.
Although Andy continues to help his family expand the Kim San Leng kopitiam chain, which now numbers 35 outlets on the island, he got his younger brother Alfred to help him set up Yellow Submarines. He also founded bubble tea chain Ochado in 2010, which now has more than 65 branches in Brunei, Indonesia, Cambodia, the Philippines, Malaysia and Singapore. And he plans to open a tea boutique next year, selling an assortment of Asian teas.
“I am adventurous. I must do something or I get restless. And I think the key reason why I’m doing this is because I hope to be successful,” he says. “But not on my father’s strength.”
For his wife Titin Suntianto, the reason was slightly different. “I have all along yearned to do my own business — that was before I got married and had kids. After almost 10 years of marriage and four children, I needed to get out to the workforce. And I wanted to open a café initially,” she says.
Yellow Submarines is best known for its Philadelphia cheesesteaks with a twist. “We added some Asian flavours to our cheesesteaks. The original ones from Philadephia are much larger and saltier,” Andy says. On the local food review site HungryGoWhere, the cheesesteaks have raked up a 78% approval rating.
Instead of beef patties, the fast-food chain uses quality cuts, such as sirloin beef, for its cheesesteaks. Against a backdrop of bright yellow walls and white tiles, the Yellow Submarines outlets also sell tuna and chicken submarine sandwiches, cheese fries, burgers, nuggets and chicken cutlets. New items, such as oregano-baked chicken and mango chutney infused chicken sandwiches, are offered on the menu from time to time. The latest addition is Coney Island hot dog.
Stepping into the unknown
As a teenager, Andy waited tables, made coffee and manned the cash register at his father’s kopitiams. After university, he joined the family business full-time and began sourcing new outlets and stalls to expand the kopitiam chain. However, he wanted to try his hand at the fast-food business.
That is because he thinks there are too many cafés in Singapore, and the business depends too much on a particular chef, which is not sustainable.
So, he talked Titin into starting a fast-food chain instead. “The fast-food business, unlike cafés, is fast moving, has less competition and focuses on volume,” he explains.
Unskilled and untrained in culinary art, Andy and Titin spent nine months in their home kitchen experimenting with various types of cheese before opening the first Yellow Submarines.
“Do you know how heavy I became in that nine months? I went from about 70kg to 84kg sampling my own creations,” he says.
Meanwhile, the rest of the time was spent checking out bakeries around the island to find the right crusty bread to go with his cheese formula. These ranged from swanky ones in modern malls to old-school cakeshops in the HDB heartlands.
Andy also enlisted the help of Eric Teo, local celebrity chef and former executive chef at Mandarin Oriental, to design Yellow Submarines’ initial 10-item menu.
The fast-food business
Singapore’s fast-food industry is thriving with almost 500 outlets generating about $1 billion in annual revenue, and the sector has been growing some 6% annually in the last five years, says Zafar Momin, managing director and head of Southeast Asia at LEK Consulting, a business consulting firm.
“There are lots of quick-service restaurants popping up in the CBD area where increasingly people grab salads, sandwiches and other takeaways, and eat at their desks,” he says.
However, international players such as McDonald’s, KFC and Burger King still dominate the market. Texas Fried Chicken, for instance, left Singapore in the 1980s only to make a comeback in 2010. Delifrance has also expanded its number of outlets aggressively. But not all make it though: A&W, Taco Bell and Wendy’s have closed their operations here.
The first few months of 2013 were rough for Yellow Submarines, admits Andy. “Many people didn’t know what cheesesteaks were. We only made a few hundred dollars a day when our monthly rental was $24,000.”
The duo doubled down on their marketing effort. They came up with a video that branded Yellow Submarines as the exclusive place for Philadelphia cheesesteaks in Singapore, engaged bloggers to promote their shop and put up advertisements in magazines that target the younger crowd, such as 8 Days.
Slowly but steadily, the business picked up. Monthly revenue soon grew to $250,000 to $300,000. Today, young working adults and students make up the bulk of Yellow Submarines’ customers. Last year, a second store opened in Bugis.
“Constant marketing efforts are needed to grow the business,” says Momin. “Launching new menus regularly will also help attract new customers and sustain existing ones.”
Besides marketing, Andy is particularly proud of Yellow Submarines’ unique kitchen model, which has helped him keep the costs down.
“We had people queueing up to the lamp post outside the shop during the fasting month,” says Titin. “And we only needed two boys in the kitchen to complete about 200 orders a night.”
The kitchen spans about 300 sq ft and is divided into three stations. “We redesigned the kitchen so that the crew can do up to 1.5 times the work without too much extra effort on their part,” she explains, adding that they were influenced by the techniques used by fast-food chains in Taiwan and Japan. Yellow Submarines’ combi oven that does multiple tasks at one go also cuts its manpower needs by almost half.
Yellow Submarines’ labour costs take up 10% to 12% of its total revenue, which are 10% to 20% less compared with those of a typical F&B outlet.
But the fast-food chain pays slightly higher wages than the average fast-food joint. According to Titin, Yellow Submarines pays about $100 to $200 more for the extra work done. The two shops have 14 staff, including part-timers.
Dad, the kopitiam king
Andy’s father, Hoon Thing Leong, made the headlines when he bought over a coffee shop on Bishan Street 13 for $3.52 million back in 1990.
Critics bet his business would fold up in half a year, but he proved them wrong. The coffee shop thrived and is worth $35 million today.
In the 1960s, Hoon dropped out of secondary school to work at his father’s Jalan Besar coffee shop. For the next 50 years, Hoon went on an acquisition spree, buying one kopitiam after another.
He also pioneered new practices in the coffee shop trade, such as television advertising and installing time-saving automatic shutters to close his shops quickly, and even managed to persuade hawker masters, such as Bugis Street’s Mung Kee Chicken Rice, to set up stall at his shop.
The elder Hoon was also a fighter. When gangsters preyed on his coffee shops, he learned martial arts to defend his staff.
When Hoon first heard Andy wanted to venture outside the kopitiam empire he had painstakingly built, he was not too pleased. “He believed I should concentrate on the family business,” Andy recalls. “He probably wondered how much I could make with bubble tea and fast food.”
In his younger days, Hoon tried to venture out of his kopitiam business but with little success. He struggled with a noodle-making factory for five years and operated restaurants that never took off. His magazine publishing and construction businesses also never turned a profit.
Hoon ended up selling two of his shophouses to cover the $3 million in losses. “They weren’t my forte,” he says in Mandarin, shrugging his shoulders.
But his failures never deterred Andy from trying out on his own. In 2010, he set up Ochado on Yishun Avenue 5 with $60,000 in savings. But within two months, the business fell apart as the supplier he trusted did not deliver on the products he was initially promised.
However, Andy found a new supplier and reopened the business the following month. While Ochado is not that popular locally, it quickly grew into a successful franchise in Indonesia, the Philippines and Malaysia. It is also particularly popular in Brunei where it has four shops, each selling 500 cups a day.
In 2013, Andy used $450,000 that mostly came from the profit he made from Ochado to start Yellow Submarines. Alongside Alfred, they plan to franchise Yellow Submarines to China in a year’s time.
“I think my father is quite proud of what I have achieved,” Andy says with a smile.
When asked, Hoon says, “At the end of the day, his interest is what matters. You can’t hold him back. You ask people about Kim San Leng and they know what you are talking about. But Yellow Submarines is still young and it is some time before it can match big household names such as Kentucky and McDonald’s.”
Managing a family business
Not every business can last for generations, especially in the F&B industry. Take Kay Lee Roast Meat, which was put up for sale for $3.5 million by the Kong family in 2012. The Kongs cited a lack of interest from their two children to take over the business. Aztech Group has since bought over the business.
“The reality is that if you keep telling your children the kopitiam work is tough and whine about all kinds of problems at work, you turn them away and they will never want to take after you,” says Hoon.
Throughout Andy’s life, his father has only exhibited passion for his work, no matter how challenging times were. Hoon says, “When I opened my first coffee shop, I went from customer to customer to make sure they finish the drinks I made — that is the kind of excitement I show my children.”
But more importantly, he wants his children to carry on the business values that Kim San Leng was built on.
“Whatever business you do, you need to hold on to your values. Don’t make decision that only you win and others do not. Always try to achieve a win-win situation. And don’t be arrogant, otherwise people would stop supporting you,” he says.
When Singapore was hit by SARS in 2003, the Mung Kee Chicken Rice stall only sold two chickens a day. The old lady manning the stall was devastated. Hoon waived her rent for two months to help her get through the difficult times.
His work ethics and generous spirit have encouraged all five of his children to stay with the family business. Today, Andy and Alfred split their time between Kim San Leng and Yellow Submarines.
But with two generations working side by side, it is inevitable that there are occasions when they disagree with one another.
A few years ago, Andy wanted to modernise their Yishun canteen, but his father felt his designs were impractical. It turned out his father was right. “If you’re too modern, the older folks may shy away from patronising your shops,” Hoon says.
But Hoon has also learned from his children. Their new coffee shops use 3D signboards to create a different ambience at night. And like Yellow Submarines, the coffee shops in industrial estates have adopted a self-service model, cutting the number of workers needed in a shop to six from 15.
Passing on the beacon
Andy hopes that his children would take over the multi-generational business from him someday. Today, Andy still manages all his father’s west-side kopitiams, on top of his other ventures.
“For me, I believe you need a root to succeed in life,” says Hoon. “This business is my family’s root. It gives my family a shared goal, a common language that we can talk about every day.”
Today, Andy and his father still make regular trips overseas to visit other coffee shops to study their business model together.
Andy and Titin also bring their children — aged between two and seven — to Kim San Leng outlets and Yellow Submarines almost every weekend.
“[This is] so that they know what their parents do for a living and what our family is all about,” Titin says.
This article appeared in the Enterprise of Issue 690 (Aug 17) of The Edge Singapore.