Challenges in the F&B scene in South East Asia

The role of consultant is more than just designing the facility and specifying the right equipment, but also using our expertise to help our clients to look in-depth into feasibility and operations, which ensure efficient and practical workflow at the backend of the kitchen. Dealing with the South East Asian food and beverage sector has its own challenges. Firstly, there’s culture and economic diversity, hence owners need to have strong business models that hit their target market, rather than trying to please all segments. Secondly, majority of these countries are still developing, therefore operational cost and spending power could be a challenge. Thirdly, we see migration of foreign workers from village to city for work. These workers are less skilful and needs training. Lastly, the weather is hot and humid, which food sustainability could be a challenge. Hence consultant plays a crucial role in helping the business owners to thrive in their business and able to provide solutions by considering the above challenges.

Understanding The Asian Market
Knowing the market is crucial- as the success of your business revolves in culture behaviour, restaurant’s concept and a strong business model that is able to sustain and compete.

Asian customers can be demanding and have high expectations when it comes to dining in a restaurant as it seems to be a luxury rather than a norm. It is common to have full time housewives or servants to do the cooking, hence eating out is a weekend outing for most families or individuals. Therefore, the culture mentality is to get the best deal from the amount they spent- there is an expectation for excellent service, timely delivery of food and yet at a reasonable pricing.

Strong business model
Having a strong business identity is crucial in the Asian market. Which segment of the customers you are targeting? The upper or the lower class? Do you want to keep its food authenticity or localized the flavour to suits mass market? – these are questions that needs to be considered as it drives individual’s business model and concept. As a Thai restaurant-owner, delivering quality and authenticity is a priority- therefore my business model is not focus on localising Thai food to meet mass demands, but to educate my customers by offering authenticity in their dining experience. We hire professional chefs from Thailand who have the knowledge and expertise to deliver the cuisines. The downside is- hiring expats chef is costly and we need to find ways to reduce cost. Kitchen consultant will then give advices on recommending machines, workflow and layout that ensures a cost-efficient way to keep cost low and yet still deliver the quality.

Hiring Foreign Workers
In South East Asia, Malaysia and Singapore in particular, owners are having difficulties in managing manpower due to high operational cost and the migration of skilled talents. Foreign workers are more willing to work in this business rather than the local educated talents. To solve this issue, consultants either cut operational cost by introducing more machines or they work closely with owners to strengthen its human resource department by ensuring high motivation levels among workers and minimise turnover rate. Some of the solutions implemented includes sharing the business’ vision, awarding or recognizing staffs’ efforts and also organize trainings to upgrade their skills.  As many foreign workers left their family back home, homesick is a common issue. It is important to establish a good relationship with them which supports them morally and mentally. This will ensure better staff satisfaction and retention in the company, which means better service and food quality in the long run.

Inventory Management and Climate
A big challenge in managing profit lies on its food inventory- having the right amount of food as it is easily perishable in the humid and hot climate in South East Asia. With rising ingredient costs, inventory management is an integral component of the restaurant’s operations as it helps to prevent unnecessary wastage and maintain a healthy profit margin.

The success of a food and beverage business lies on the expertise of the consultant and business owners’ ability to manage the above factors. The business must operate on a strong model, having the ability to adapt and stay relevant to its culture. Understanding the market and putting careful considerations from culture mentality to even climate, will help every owner to succeed. Nevertheless, the people involved is still the backbone of the business. If we can manage a good and healthy working environment, it will attract great talents and create good ambience which heightened the quality and quantity of the business eventually.

Brandon Kua, FCSI
Founder and Managing Partner Citrus Consult Malaysia and Innovative Project Solutions Pte Ltd Singapore