Friday, April 12, 2024
HomeEditor's PicksHuggs Coffee founder on navigating COVID and building a coffee empire - now runs 18...

Huggs Coffee founder on navigating COVID and building a coffee empire – now runs 18 outlets

Since the early 2000s, Ron Choo has always found himself underwhelmed by the coffee scene in Singapore. Across the city-state, there was an obvious segmentation of the coffee culture — some prefer espresso-based brews, while others go for the traditional “Nanyang coffee”.

Recognising this division, he saw an opportunity to bridge this gap and unite all coffee lovers under one roof.

As an avid coffee drinker himself, Ron envisioned creating a seamless and cohesive coffee experience that would cater to every palate and preference, whether it be the delicate, bold and complex notes of espresso, or the familiar comfort of “Nanyang coffee”.

“The narrative is simple – in any group setting, there will certainly be one or more preferring either coffee,” he said.

As such, he founded Huggs Coffee alongside his wife, Eve Choo, in 2008 — and it’s the first coffee brand that offers a blended coffee experience in Singapore.

Creating warm and comforting safe havens with coffee

To establish the coffee chain, Ron drew upon his experience in the food and beverage (F&B) industry, which he had obtained earlier on in life.

As a teenager, he spent some years working part-time at a fine dining restaurant, gaining invaluable insights into the world of F&B while managing his responsibilities during school and army breaks.

Although he subsequently took on corporate roles across various domains including consultancy, advertising, marketing, and branding, his professional journey also laid a solid foundation for the coffee brand he aspired to create.

While Huggs Coffee is a brand that specialises in exceptional coffee, the true essence of the brand lies in creating “warm and comforting safe havens” for their customers to enjoy their favourite cuppa, hence the name “Huggs”.

Since its launch in 2008, Huggs Coffee has managed a chain of outlets strategically located in major business district areas, which primarily catered to office workers, making it a convenient choice for Singapore’s bustling workforce.

During its formative years, Huggs Coffee achieved remarkable success by securing contracts to manage in-house cafes for prominent corporations such as JP Morgan, GIC and Deloitte, among others.

Additionally, the brand forged notable partnerships with local institutions, including Epigram Books, one of Singapore’s largest book publishers. Through this collaboration, the coffee brand launched the Huggs Epigram Coffee Bookshop — Singapore’s first ever local published book cafe, featuring books and literature by local authors.

The pandemic put a halt to the business’ success

By 2019, Huggs Coffee had seen robust growth, establishing over 20 outlets across Singapore, as well as its first regional international airport outlet at KLIA2. Nearly all of these outlets saw double-digit growth.

Despite its early achievements and promising trajectory, Huggs Coffee faced an unforeseen obstacle in 2020 — the COVID-19 pandemic struck, completely taking Ron and his team by surprise.

As most of Huggs Coffee’s outlets were based in the central business district (CBD) and business parks, this meant that its customers practically disappeared overnight when the circuit breaker was first implemented in April that year.

Its sales had dropped to virtually zero during the lockdown periods and compulsory work-from-home regulations. Even when the lockdowns were lifted, most white-collar workers continued to work from home for the most part, which severely impacted the business.

In fact, Ron candidly admitted that the coffee chain had to let go of some of its best performing outlets, specifically those whose leases were due, during the pandemic.

One of the factors that exacerbated the impact of the pandemic on Huggs Coffee was its lack of a robust online presence. While some cafes and restaurants managed to sustain their businesses through online orders and deliveries, Huggs Coffee found itself at a disadvantage in this aspect.

Bringing in fresh perspectives with a young team

Not too long later, Ron’s eldest son, Ben Choo, joined the business after he graduated from university with a business degree. The younger Choo, who felt an urgent need to help build the brand, was previously involved in Huggs Coffee’s operations during his semester breaks and holidays.

Ron recognised the need for fresh perspectives for his business during the pandemic, so he accepted Ben’s proposal to rope in his old friend, Lee Hao Ming, to primarily contribute ideas to support the coffee chain.

Amidst the challenges faced by Huggs Coffee, Ben successfully spearheaded its online presence, including onboarding the business onto major food delivery platforms. Although the coffee chain lagged behind its F&B competitors in establishing an online presence, its offerings were well-received by its customers.

Most importantly, Ben played a critical role in managing various aspects of the business, including communication and negotiations with both landlords and franchise partners.

Hao Ming, who resigned early this year, led the business’ expansion into residential areas and malls across Singapore through a newly established, licensed entity called Huggs Ventures, given that Huggs Coffee’s CBD outlets took a hit during the pandemic.

Although Ron was initially hesitant on allowing a young team to embark on such a vigorous expansion plan, he finally endorsed the idea with much reservation as he did not want to “douse the relatively young team’s, who were in their early 30s, enthusiasm and drive”.

Huggs Coffee launched a new store concept in residential areas

Huggs Coffee’s venture into residential areas meant that it would face stiff competition, contending with local coffee shops offering affordable, traditional brews, as well as cafes catering to diverse tastes.

Expanding into residential areas also meant that it would most likely attract a different crowd of consumers, as opposed to white-collar workers who mostly look for grab-and-go options.

To cater to this audience, the young team decided to launch a new store concept called Huggs Collective. These spacious outlets come with lounges that are equipped with amphitheatre-like seating and private pods, as well as an auditorium space.

The team’s boldest move to date was to set up Huggs Coffee’s flagship outlet – a massive 3,000 square feet space located at Maxwell Road.

While Huggs Coffee was well-received in these residential areas, Ron admits that the business is “still reeling from less than desired performance” from some of these outlets.

The younger team executed some critical aspects of Huggs Coffee’s expansion successfully, but the move brought about “much unforeseen and major financial implications” to the business.

As such, Ron made the decision to return to the helm of the brand he had built and nurtured, resuming his role as CEO, in January this year.

Growing Huggs Coffee to become a legacy brand

Despite the emergence of overseas coffee brands like Luckin Coffee and Tanamera Coffee, Ron maintains unwavering confidence in Huggs Coffee’s offerings and service standards.

Today, the business is joined by Ron’s daughter, Clair Choo, who currently serves as the general manager of the coffee chain.

Currently, the business is in the process of regaining momentum and is actively working to restore its number of outlets to the pre-pandemic level. As of writing, there are 18 outlets in operation, with four additional outlets slated to open in the coming months.

In keeping up with the ever evolutions of brands, Huggs Coffee is undergoing a rebranding exercise to connect more intimately with its customers.

As part of this rebranding, the company will omit its bear logo to mitigate future intellectual property issues. “A fresh, meaningful and uplifted logotype symbol will be taking Huggs Coffee forward, and will be unveiled soon,” Ron adds.

Aside from its rebranding and expansion into residential areas, the company has also launched Huggs Professional, which offers a full suite of coffee solutions to the HORECA (hotels, restaurant, and cafe) market as well as corporate entities.

Within a year, Huggs Professional has garnered an impressive range of clients, ranging from financial institutions, chain stores, global brands as well as MNCs.

Moreover, the brand has also established a state of the art coffee roastery that supplies highly-curated single origins and blends, serving both the brand’s retail outlets as well as Huggs Professional’s clients.

Looking forward, Ron shares that the ultimate goal for the brand is to expand its presence overseas and offer the Huggs Coffee experience regionally.

Featured Image Credit: Huggs Coffee

Also Read: From publication to distribution: GCL Asia founder on becoming a titan in thegamingworld

Unlock the knowledge of Asia’s tech landscape

Subscribe to our premium content for just S$99.90 a year.

Monthly Package

S$9.90 / month(or S$0.33 / day)

Gain access to all Vulcan Post Premium content for S$9.90 per month.

Annual Package

S$99.90 / year(or S$0.27 / day)

Gain access to all Vulcan Post Premium content for S$99.90 per year.

RELATED ARTICLES
- Advertisment -

Most Popular