Last updated on October 20th, 2015 at 10:50 pm
By Daniel Goh
If you’ve been religiously following the news in Singapore’s hawker food scene, probably the most shocking news in recent weeks was that young graduate hawker Tan Jun Yuan, who runs a Bak Kut Teh stall in a Toa Payoh coffeeshop, threw in his Good Morning towel just five months into the trade.
Jun Yuan, who had burst into the scene with great fanfare last September after leaving his job as a product manager to become a hawker, shockingly announced the closure of his business at the end of last month citing, amongst other things, the labour crunch. He had explained that it had been difficult finding staff, and one that had even pilfered from his takings. In one of the interviews with independent media Jun Yuan also mentioned that he went as far as to put down a deposit for a second outlet, but without being able to hire to help man the additional branch, he had to shelf those plans.
Indeed, his announcement was met with consternation and even Makansutra’s KF Seetoh in a Facebook post lamented the loss of Jun Yuan from the hawker trade, pointing out that this is likely to accelerate the degeneration of our local food culture.
The Kitchen At The Centre Of It All.
Interestingly, Jun Yuan also mentioned that at some point, for his business to truly work, they would need to expand to four to five outlets, and with a central kitchen supplying them. He said this when he posted his stall’s impending closure:
“You may or may not know that our model has always been premised on having more outlets.”
What’s more interesting than what he said, was what he didn’t say. Consider this - Jun Yuan is a first-class honours graduate in Management from the University of Manchester. One can safely assume that he has some idea of how to put together a business plan, forecast for various case scenarios and run some numbers to arrive at the conclusion that for a food business in Singapore to succeed and thrive, one needs scale. A scale that requires at least four to five different branches - a number of profit centres that help support one cost centre (the central kitchen) - in order to generate a healthy cash flow.
This is, if one reads between the lines, quite revealing. It shows two things:
- Most food businesses in Singapore, in order to survive and thrive, require sufficient capital to provide the runway so that they can build the kind of scale required, and that’s likely to be to the tune of millions; and
- That commercial rentals have skyrocketed beyond a tipping point such that most food businesses, even those that run hawker stalls, require the facilities of a central kitchen somewhere else - usually located in industrial estates with far cheaper rents - in order to manage costs.
Central kitchens are fantastic facilities in that they can generate a large quantity of food in very short amount of time at possibly lower prices due to economies of scale, streamlining of duplicated functions and higher automation. But many food businesses - aside from catering services or large-scale food service businesses such as hotels - previously never needed to use central kitchens because it has always been that what was produced onsite is sufficient to cater for the required number of customers to help keep the business afloat. The fact that central kitchens are now a key factor in determining whether a food business can take off only means that existing kitchen facilities within each establishment may be insufficient to produce enough food quickly to supply the larger number of customers needed to sustain the business. This is worrying.
Make no bones about it - this means that there’s even less breathing room for small, independent food businesses in Singapore, moving forward. And that their chances of success have just shrunk to an even more diminutive number.
Perhaps this is one of the reasons why you see that every time a new mall opens in Singapore, the usual suspects when it comes to F&B options always appear - they’re the ones with sufficient capitalization, and have large central kitchens to supply pre-prepared food in sufficient quantities to cater to those needs.
At the risk of sounding alarmist, I’d argue that this trend of the over-reliance on central kitchens may have unhealthy consequences on Singapore’s food industry and, by extension, our food culture. For the signs surely support Seetoh’s doom and gloom prophecy where one day our younger generations merely subsist on machine-made, soulless food that will finally sound the death knell on our Singapore food heritage.
This post was first published at The Beer Hawker.