The Straits Times
Publication Date: 11-07-2010
Big business is brewing in the kopi and kaya toast trade. Cafes specialising in local coffee, or kopi, and traditional kaya toast started flourishing in 2006 and the scene is fast heating up.
The growth of these cafes, including the popular chains Ya Kun Kaya Toast and Toast Box, is fuelled by Singaporeans' craving for their daily dose of caffeine at affordable prices.
A cup of kopi - Malay for coffee - at Ya Kun Kaya Toast costs $1.30 (94 US cents), barely half the price of a cup of daily brew at American coffee chain Starbucks, where it costs $3.50 (US$2.50). Its price is also competitive to a cup of coffee sold at a coffee shop or hawker centre, which costs about $1 (72 US cents).
Sweetening the deal for consumers is the cheap nosh at these home-grown cafes: oozy soft-boiled eggs and kaya (coconut jam) toast with slices of butter cost less than $2 each.
Since January, no fewer than 24 such cafes have sprung up, bringing the number of coffee-and-toast shops here to at least 178.
Another 21 stores are in the pipeline, due to open by the end of the year. These upcoming joints will be rolled out by new players and established brands.
Toast@Work, which opened in December last year, now boasts six outlets and will add three more this year, including one at United Square. The chain is run by food court operator Food Junction.
Likewise, Wang Cafe, set up in 1953 with shops in Suntec City Mall and 313@Somerset, is growing from 23 to 30 outlets by December.
Beautician Agnes Whang, 40, who drinks one to two cups of coffee a day, says: "If I drink coffee from Western chains such as Starbucks, my caffeine habit will become too expensive, so I stick to drinking kopi from cafes such as Toast Box." She voices a sentiment shared by many who guzzle coffee to beat the daily grind.
These comfortable, air-conditioned cafes are a popular venue for casual business meetings, too.
Mr Stephen Lim, 47, the chief executive officer of a travel agency, visits Good Morning Nanyang Cafe at Chinatown Point two to three times a day, for business and for a breather from work. He says: "I like meeting clients at the cafe because it is sometimes easier to talk business over coffee. A good cup of coffee helps to put one in a better mood, the conversation flows and it is easier to ink deals."
Soft-boiled eggs spilling runny yolks, crispy kaya toast and a heady brew of kopi have been the quintessential breakfast for generations of Singaporeans.
So many diners, including 56-year-old safety training manager Eric Chin, return frequently to such local cafes for the taste of comfort. Indeed, this burgeoning demand for traditional kopi and toast was what prompted Mr Jack Poon, 32, to quit his cushy business analyst job and start Coffee & Toast in 2005.
He says: "When my former colleagues and I went for tea breaks near our workplace in Raffles Place, we would always lament that there weren't enough of such local cafes and that made me think of starting one." He opened his first shop at Raffles XChange, the retail enclave at Raffles MRT station, and the business gradually grew to nine stores, including a halal outlet, Kaffe & Toast, which opened in January at the Singapore General Hospital.
The low entry barrier of this business has helped stimulate the proliferation of kopi-kaya toast brands. Mr Byron Shoh, 45, a former business analyst who quit his job to start Good Morning Nanyang Cafe in 2005, was no expert at making coffee or kaya toast initially. But he picked up the basics from his coffee and bread suppliers, who were willing to teach him the ropes. It cost him about $50,000 (US$36,205) to set up his first outlet at Majestic Theatre. He opened his second store recently in Robinson Road. Even food court operators such as Koufu and Banquet have diversified into the kopi-kaya toast business. Koufu owns six Pick & Bite outlets while Banquet has about 30 Ah Mei Cafe shops. Mr Alan Lee, 59, managing director of Banquet, says: "Large spaces for food courts are not easy to come by, but a concept like Ah Mei Cafe can easily occupy smaller retail spaces in shopping malls."
And the profits that this business generates are nothing to sniff at. Mr Thomas Foo, 58, chairman of Kheng Keow Coffee Merchants Restaurant and Bar-Owners Association, which has more than 300 members, says the business is lucrative because the cost of raw materials is low. He says: "The cost of a cup of coffee is about 20 cents, but most places sell it for more than 80 cents. So the profit is not bad if the owner is able to keep his rent and labour cost reasonable." Retailers whom LifeStyle interviewed say profits range anywhere from 10 per cent to 50 per cent.
Mr Steven Tan, director of the Wang Cafe group, says its business has consistently posted 'double-digit percentage growth' for both its revenue and profit.
Owners of many of the local cafes that LifeStyle interviewed say the economic slowdown in the last two years did not affect sales significantly because their products are a dietary staple.
To boost sales though, many of them have taken to attracting customers with innovative concoctions. The traditional kaya toast, for example, has been re-invented with Toast@Work launching a baguette kaya toast and Good Morning Nanyang Cafe rolling out its Italian ciabatta kaya toast. Proper meals such as curry chicken and laksa are also on the menu at Toast Box by the BreadTalk Group.
Mr Woon Tek Seng, 62, director of the Killiney Kopitiam chain, says: "The variety in our menu, from coffee and toast to mee siam and mee rebus, has helped boost sales. Customers can now patronise Killiney several times a day for breakfast, lunch, tea and dinner."
But with so many outlets flooding the market, is this business toast?
Mr Adrin Loi, 55, executive chairman of Ya Kun International, which runs Ya Kun Kaya Toast, says the kopi-kaya toast scene here has 'grown exponentially' in recent years, but he feels that demand for its coffee and toast remains strong enough for the company to have branches in adjacent shopping malls, Orchard Central and 313@Somerset.
He says its Orchard Central outlet, on the fifth floor of the mall with a view of Orchard Road, attracts professionals from nearby offices on weekdays and families on weekends. The street-level store at 313@Somerset, steps away from Somerset MRT station and a bus stop, caters more to busy commuters.
Similarly, Mr Tan of Wang Cafe says business at its outlet on the third floor of Suntec City Mall continued to grow even after another branch opened less than a year ago on the second floor at the opposite end of the mall. He reveals that business at the second store has also been climbing steadily. And he is confident that the mall, with its high traffic volume and proximity to offices in the area, can support another one to two more Wang Cafe stores. Equally upbeat about the future of the kopi-and-kaya toast cafe business is Mr Lim Eng Lam, 43, owner of Nanyang Old Coffee, which has four outlets, including one in South Bridge Road.
He says: "I believe the coffee and toast market is still vibrant and has potential for growth because different cafes, and the types of coffee they sell, appeal to different palates. "I plan to open three outlets every year for the next few years until we hit between 20 and 25 stores."
Lifestyle test taste
Diners here are spoilt for choice with so many kopi and kaya toast outlets dotting the island. But consistency is a problem. LifeStyle did a taste test of the standard kaya toast set, which comes with a serving of kaya toast, kopi and soft-boiled eggs.The judging criteria: the bread had to be properly toasted and paired with good kaya; the coffee had to be strong, aromatic and its flavour not masked by the milk or sugar; and the eggs had to have uniformly runny yolks with its whites cooked, but still wet and soft.
Verdict: The orangey-yellow yolks ooze sunshine and the wobbly whites are properly cooked. The crispy brown toast is just a little dry although the kaya has a coconutty fragrance. The coffee is smooth and of the right degree of sweetness.
Oldtown white coffee
Where: Seven outlets, including 8 Grange Road, 01-04, Cathay Cineleisure, tel: 6737-4404, open: 9 to 2am Sundays to Thursdays, 9 to 4am Fridays and Saturdays, www.oldtown.com.my
Price: $4.20 set available only on weekdays from opening till 11am
Verdict: The coffee at this outlet comes with a lovely head of foam. It is milky and smooth but a deep roasted flavour shines through and the aroma lingers in the mouth. The crispy toast is a little dry and the kaya is sweet. Parts of the egg white are not cooked.
Good morning Nanyang cafe
Where: Two outlets, including 108 Robinson Road, level 1, open: 7.30am to 7pm weekdays, 7.30am to 2.30pm Saturdays, closed Sundays
Verdict: The brown toast is crisp and airy. It bucks the trend of sandwiching slices of butter between the toast and instead, spreads it evenly over the bread. But what clinches the deal is its fragrant kaya with a delightfully jammy consistency. The eggs are cooked just right and the milky coffee is smooth.
Nanyang Old Coffee
Where: Four outlets, including 268 South Bridge Road, tel: 6100-3450, open: 7am to 6pm daily, www.nanyangoldcoffee.com
Verdict: The flavour of the coffee is not masked by the milk or sugar. It has a gentle bitter aroma and a clean finish on the palate. The eggs are properly cooked and the white bread is evenly toasted.
Where: 26 outlets including 2 Orchard Link, 02-40, *Scape, open: 7.30am to 11pm weekdays, 7.30 to 2am weekends, www.breadtalk.com/toastbox
Verdict: The coffee has a smooth and nice foamy top and the eggs pass muster. The white bread is fluffy, evenly toasted and comes with a generous amount of butter.
Pick & Bite
Where: Six outlets, including 6 Raffles Boulevard, 01-07, Marina Square, open: 7am to 9.15pm daily, www.koufu.com.sg
Verdict: The bread for the toast is addictive, crisp on the outside and thick enough to be fluffy to the bite. The kaya though, does not stand out. The yolk of one of the two eggs is more viscous than runny and the coffee is too watered down.
Ah Mei Cafe
Where: 30 outlets including 290 Orchard Road, B1-37, Paragon, open: 10am to 10pm daily, www.banquet.com.sg
Verdict: The crispy brown toast can do with a little more of the fragrant kaya and one egg has parts of its whites a little undercooked. But the flavour of the coffee is rounded.
Where: 1 Esplanade Drive, 01-01, Esplanade Theatres on the Bay tel: 6884-5658, open: 10am to 9pm daily
Verdict: The coffee is fine. The yolk of one of the two eggs is a little too viscous. The bread is a tad too thin and could do with more toasting.
Where: 23 outlets, including 6 Raffles Boulevard, 02-230A, Marina Square, open: 7.30am to 10pm weekdays, 7.30am to 11pm Saturdays, 8.30am to 10pm Sundays, www.killiney-kopitiam.com
Verdict: The coffee is well-balanced and the eggs pass muster. The toast is lightly crisped with a soft, fluffy bite and the kaya has a nice eggy taste.
Coffee & Toast
Where: Nine outlets, including 1 Raffles Link, B1-40, City Link Mall, open: 7am to 10pm daily
Verdict: The coffee has a measured sweetness and a whiff of bitter aroma. The brown toast is crispy but not dry and the kaya is tasty. The eggs are largely properly cooked, although the edges of one yolk are more viscous than runny.
Ya Kun Kaya Toast
Where: 35 outlets including 18 China Street, 01-01, tel: 6438-3638, open: 7.30am to 7pm weekdays, 8am to 6pm weekends, www.yakun.com
Verdict: Its China Street outlet is the only branch that still grills the brown toast using charcoal; pay attention and you can pick up the faint smokiness in the crisp toast. The coffee is well balanced and the eggs are properly cooked.
Where: 65 Killiney Road, tel 6235-0065, open: 7am to 7pm daily
Verdict: The eggs and coffee are fine, the toast could be crispier.