Commentary: F&B businesses cannot rely on fads to thrive

Commentary: F&B businesses cannot rely on fads to thrive

4Fingers CEO Steen Puggaard highlights the challenges in the food and beverage industry and argues for the need to think beyond food to stay in business.

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4Fingers is looking to expand to markets in Malaysia, Europe and the US over the next f. (Photo: Jalelah Abu Baker)

SINGAPORE: Businesses in the food and beverage industry need to think beyond “just” food, to think and act in business terms as brands that disrupt and challenge the status quo, as part of a movement for better food.

In the F&B industry, many restaurants and cafes come and go. About 28 per cent of F&B outlets in Singapore close within a year of opening.

Sometimes, it boils down to whether a restaurant has a strong, realistic financial position and is able to weather the initial phase of building up a customer base. Indeed, Singapore remains one of the most expensive countries to be in - high rental, manpower shortages, coupled with the trend of declining footfall in malls as well as the growth of home delivery, are challenging F&B businesses.

Often, however, F&B outlets open and close in quick succession because they started by hooking onto a new consumer craze but were unable to sustain interest once that fad passed.

People pass closed shops at a section of a mall in Singapore
People pass closed shops at a section of a mall in Singapore. (File photo: Reuters/Edgar Su)


At 4Fingers, some say we are a passing Korean fried chicken fad. True, we use a traditional Korean cooking recipe, but we borrow ingredients liberally from other Asian cuisines.

Businesses like us must know that fads like K-pop come and go. So we have intentionally avoided positioning 4Fingers as a Korean food concept. Rather, we are a brand with a great experience around some amazing crispy fried chicken, taking inspiration from various Asian flavours. For example, our katsu chicken sandwich combines Chinese mantou buns with kimchi coleslaw.

Businesses like ours are surely aware that consumers are increasingly experiencing brand fatigue and are on the lookout for new, better options. People are not looking for another cookie-cutter fried chicken joint. There is a demand for honest, good food, so F&B outlets like ours must pay close attention to ingredients.

4 fingers wings batter
Each piece of chicken is battered individually using 4Fingers' proprietary sauce. (Photo: Jalelah Abu Baker)

We also engage in causes that we think our customers can relate to, which has built high brand awareness. These include: Sending national rower Saiyidah Aisyah to the Olympics in Rio and supporting local artist Sam Loh who decorated one of our stores that just opened in Melbourne in June.

We have reached 85 per cent brand awareness in Singapore in the 18 to 39-year-old segment, second only to McDonald’s. I like to think this is truly amazing awareness and reach for a homegrown brand that has 12 outlets here.


We are also more than aware of manpower shortage problems in the food services industry and the high cost of labour. But surely, in the F&B industry so dependent on our frontline staff to deliver the customer experience, we must treat all our staff as who they truly are: Fellow human beings.

When it comes to salaries, F&B outlets should always ask ourselves – what is the amount we can afford, rather than how much we can get away with paying. So we offer our part-timers shorter shifts with an hourly rate of S$11 which is higher than what the market pays for similar jobs. Many really like that because it gives them an opportunity to make a decent income while having time for studies or other part-time jobs.

Obviously, F&B businesses will be keenly aware of costs structures and the importance of sustaining a profitable business. To us, however, it is all about getting our priorities right and striking a balance.

We feel vindicated because we have found that our employees are happier, as compared to the industry as a whole. By offering an attractive incentive programme as well as flexible hours with higher salaries, it seems we have in return happier staff, higher productivity and better service to our customers.


Even then, it is still not enough for F&B outlets to get branding and manpower policy right. We need to think about the future of F&B and how consumers want to dine. So at 4Fingers, we are also looking at new productive business formats in line with the Food Services Industry Transformation Map. We need to match customers’ preferences and deliver fried chicken to them in the way they want, to ensure our long-term business growth.

4Fingers store
4Fingers has opened the first of three stores in Australia and is currently looking at potential sites in Los Angeles, says CEO Steen Puggard. (Photo: 4Fingers)

For example, we have developed an app that lets customers order and pay online. The app uses customers’ phones to replace the buzzers that we are currently using in our stores. People can then order before they even get to the store and arrive in time to pick up their orders.

We can then redeploy staff currently only handling cashiering to spend more time interacting with customers. This is important because customer service excellence is an integral part of providing an overall great F&B experience.

We will also make use of online orders and payment modules in our cash registers by letting our customers order and pay for home delivery online, from the comfort of their couch at home. We need to respond to a fast-growing demand for food delivery and the ability to order whenever, wherever, or risk being sidelined.

Most of our younger customers have been exposed to such disruptive technology, and we feel confident rolling out these new functions. It is a fast-growing space in their demographic, but we also think that some of our older customers may be receptive.

We are growing 4Fingers to become a formidable F&B business that keeps up with what our customers want so that we are not just a quick-service restaurant brand. This may seem like a lot of effort just to keep up, but what choice do F&B outlets have?

After all, hailing from a country where people take their food seriously, 4Fingers and the F&B industry in Singapore as a whole, have the potential to set the global standards for good food and dining. And we should meet such expectations.

Steen Puggaard is CEO of 4Fingers.

This is the fifth commentary in Channel NewsAsia's series exploring the impending transformation in key industries in Singapore.

Read the first commentary in the series on how hotels are adopting robots here.

Read the second commentary on the transformation in food manufacturing here.

Read the third commentary on the challenges to retail, especially from e-commerce here.

Read the fourth commentary on the urgency for the manufacturing sector to embrace automation here.

Source: CNA/sl