KUALA LUMPUR, May 21 — Most businesses would have considered themselves luck to break even during the Movement Control Order (MCO) which started on March18, 2020. The past couple of months have been challenging, to put it mildly, especially for food-and-beverage (F&B) companies which typically have razor-thin margins.
So how did one F&B business not only survive but actually expand during the lockdown?
The Woodpeckers Group includes brands such as frozen yoghurt franchise llaollao, originally from Spain, and Pebble, a homegrown burger restaurant. CEO Tan Kai Young shares, “Due to popular demand, llaollao eventually opened up to 10 stores, and then added another 27 nationwide within two weeks.”
Let’s put this in perspective: The company states that they had 10 stores as of April 16, then by early May added another 27 stores for a total of 37 stores nationwide. Even by franchise business standards, that’s some rapid expansion, what more during a pandemic.
Tan explains, “Most of the llaollao stores in Malaysia are owned by Woodpeckers Groups, joint venture partners and licensees. Woodpeckers Group is the Master Licensor of llaollao Malaysia while Pebble is directly owned by Woodpeckers Group.”
The strategy here seems to be having a good mix of different F&B brands that can feed off one another (pardon the pun). Tan says, “It is our mission to continue to develop brands that create cravings through a horizontal integration strategy.”
The model for each child business might differ but it’s the synergy between the brands that matters here. Clearly the target market is a more affluent, urban one.
While llaollao, founded in Dénia, Spain in 2009, capitalises on its international name brand, serving customers “the freshest frozen yoghurt by using the finest ingredients”, the burger restaurant Pebble, established in December 2018, has a more local take on artisanal burgers. Signature offerings include the CFC (crispy fried chicken) and the beef-based O.G. with a charcoal bun.
While all stores remained closed during the first two weeks of the MCO, the company pivoted swiftly to various other avenues to ensure operations and sales continued. These included WhatsApp ordering, delivery platforms and takeaways.
The enterprising team then launched a Ramadan Bundle, comprising one set of llaollao takeaway and Pebble Burger DIY kit to encourage consumers to be home chefs. The bundle includes two free packets of nasi lemak from USJ4 Cik Shazana, a local nasi lemak stall in front of Petronas USJ4.
Tan shares, “It’s our way of supporting local business. Cik Shazana’s parents started the business when she was 15 years old following her mother’s retirement as a nurse. It has been their main income ever since. Their normal daily operation which starts at dawn till 11am was disrupted due to the MCO. We hope this small gesture will help them during this trying time.”
This tough period proved to be an opportunity to do things differently. When the Woodpeckers Group expanded their WhatsApp delivery to cover wider areas, they also allowed their staff to participate in the delivery teams.
Tan shares, “It was great to see young entrepreneurs hustling during these times as well. They acted as our agents in taking bulk pre-orders from their areas and delivering it personally to the frozen yoghurt fans. These individual agents contributed to almost 30 per cent of our revenue during these tough times. For some outlets, these agents actually contributed more than 70 per cent of the daily sales.”
Next in the pipeline for both llaollao and Pebble are strategic collaborations with other brands to help leverage on each company’s key area of expertise. Tan shares, “F&B is always a fast paced industry and with this new norm, we must move even faster. We are fighting for the same space... so all the new campaigns must be monitored closely to determine how we will be allocating our resources.”
One critical resource is manpower. The Woodpeckers Group is atypical in that no staff has been laid off throughout the lockdown. Tan explains, “Our team members are always our priority. Everyone still received full pay to ensure they have enough to maintain and continue their daily life to survive.”
While reminding his team that the company is in survival mode, Tan also focused on staying connected with every staff member on a daily and weekly basis, both to brainstorm ideas as well as to keep everyone updated on the company’s plans and direction moving forward.
As with other F&B businesses, customer safety and health is a key concern. Beyond that, understanding the customer’s frame of mind during the lockdown is another area Tan is focused on.
He explains, “We are actively interacting with our loyal fans so that we are hearing the right messages. What used to be the usual might be irrelevant moving forward. What customers value has changed during these times. As a company to stay relevant, we have to listen closely and passionately.”
Perhaps that is how a company can go beyond survival mode but also expand and thrive: by listening to their customers and staying a step ahead. If the Woodpeckers Group’s incredible growth is anything to go by, remaining relevant might be the new norm for staying competitive.