Case - Food Products

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CONQUERING THE WORLD: ONE LOAF AT A TIME
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HBSP No.: NTU300
Ref No.: ABCC-2021-001
Eugene Kang, Loo Jun Xian and Yong Jie Ying Date: 28 May 2021
Two decades were all it took for Dr George Quek to mould his crown jewel, BreadTalk, into a household
brand. Established in 2000, BreadTalk had grown from a small local bakery to become an internationally
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known food and beverage (F&B) powerhouse (see Exhibit 1 for the milestones of BreadTalk Group).
Mention BreadTalk and images of delicious, fluffy bread with unorthodox designs and creative, on
occasions even funny, names would come to mind. This was exactly how BreadTalk strived to position
its brand: innovative, vibrant, satisfying and simply delightful. When BreadTalk introduced the floss bun
in 2000, it propped the brand into the spotlight and took Singapore consumers by storm. It also
reinforced a very strong bread culture, which continued to the present. The Company had brought a
bland staple to life, injecting a distinct personality to its label that stood tall among its competitors.
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Yet despite successes in several of its advancements, in 2020, BreadTalk Group was experiencing a
period of stagnation and underperformance at some fronts, especially in the bakery division in China.
Although this was mitigated by stronger earnings in Singapore and other franchise income, new
methods needed to be implemented to stay relevant amongst rising competition and shifting
demographics. Moving forward, BreadTalk bakery needed to identify ways to maintain its
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competitiveness and adapt to the changing local and regional situations appropriately.
BREADTALK GROUP OF 2020
As a result of multiple acquisitions and joint ventures, BreadTalk Group had built and amassed a
comprehensive range of product and service offerings, as well as brand portfolio in F&B that included
dine-in restaurants, retail bakery shops, food atriums, beverage kiosks and more (see Exhibit 2). The
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diverse portfolio of brands allowed the BreadTalk Group to target a wider range of consumer segments,
increase their revenue streams and grow at a faster rate.
The 4orth Food Concepts was a small division that spearheaded the Group’s portfolio growth and
expansion into new markets and managed a few newly acquired brands. Having multiple F&B portfolios
gave the Group opportunities to enjoy economies of scale, in terms of rent and raw materials. This was
evident in the Group operating its stores near each other. By leveraging these brands, BreadTalk Group
Loo Jun Xian and Yong Jie Ying prepared this case based on interviews with BreadTalk Group, with guidance from
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Associate Professor Eugene Kang. This case is intended for class discussion and learning, and not intended as
source research material, or as illustration of effective or ineffective management.
COPYRIGHT © 2021 Nanyang Technological University, Singapore. All rights reserved. No part of this publication
may be copied, stored, transmitted, altered, reproduced, or distributed in any form or medium whatsoever without
the written consent of Nanyang Technological University.
The Asian Business Case Centre, Nanyang Business School, Nanyang Technological University, 50 Nanyang
Avenue, Singapore 639798. E-mail: asiacasecentre@ntu.edu.sg
This document is authorized for educator review use only by Debashis Chakraborty, Indian Institute of Foreign Trade until Jan 2022. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
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could bring down rent prices while maintaining the selling price of their food, hence increasing their profit
margin.
Due to the competitive nature of the F&B sector in Singapore, together with limited growth opportunities,
the BreadTalk Group had also diversified and expanded into different markets like China, the Middle East
and Southeast Asia. Such overseas expansions paid off during economic downturns. Despite the global
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economic recession in 2009, the Group managed to enjoy a revenue increase of 16.1% from $212.2million
in 2008 to $246.5million in 2009. This allowed the Group to enjoy double-digit growth for a decade (see
Exhibit 3A for the Consolidated Statement of Comprehensive Income from FY2014 to FY2018).
BreadTalk Group also underwent corporate restructuring at the senior management level to streamline its
business and better prepare for the future. With the restructuring, some of the brands in 4orth Food
Concepts would be re-assigned to the larger bakery, restaurant and food atrium divisions in the Company
to increase the efficiency of backend processes and minimise duplications among the divisions.
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Some of BreadTalk Group’s retail outlets were directly operated by the Company, while the majority of them
were franchised (see Exhibit 2). The Group’s company-operated businesses were mainly in Singapore,
China, Thailand and UK. The challenge for BreadTalk Group was to grow its company-operated businesses
in its current markets.
In early 2020, a special purpose vehicle, BTG Holding Company, initiated a conditional cash offer at $0.77
per share with the aim of delisting the Group. BTG was co-owned by Dr Quek, his wife Ms Katherine Lee
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who is BreadTalk’s Deputy Chairman and Executive Director, and Minor International, which is a Thai-listed
hospitality and leisure company. The offer to delist the Group sought to reduce listing expenses and improve
the Group’s flexibility to address challenges. Furthermore, the Group had not raised equity for the past
decade and a continued listing was not necessary with alternative sources of capital, such as bank
borrowings. The offeror owned roughly 70.53% of BreadTalk as at 24 February 2020.1
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REGIONAL INFORMATION
The two largest markets of BreadTalk Group were Singapore and China, with revenues from these
countries making up about 84% of the Group’s total revenue in FY2018 (see Exhibit 4).
Singapore
Singapore was the largest revenue-contributing market and accounted for 58% of the Group’s total revenue
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across all four divisions.
Singapore was BreadTalk’s founding home base and headquarters and the Group had two decades of
experience in the local market and was familiar with consumer tastes. BreadTalk Group achieved high
success by offering products that capitalised and built on local traditions and nostalgic sentiments.
Besides favouring popular local delights, Singaporeans valued and tended to lean towards freshly baked,
wholesome and preservative-free breads.2 To cater to the characteristics of local consumers, BreadTalk
bakery constantly refreshed its product range every six months and this served as a pull factor. Singapore
accounted for 55% of the bakery division’s revenues from direct operated stores in FY2018 (see Exhibit
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5).
1
The Straits Times. (2020, February 25). BreadTalk founder George Quek makes $0.77-per-share offer to take company private.
https://www.straitstimes.com/business/companies-markets/breadtalk-founder-george-quek-makes-077-per-share-offer-to-take-
company
2
Choo, F. (2018, November 20). Singaporeans adopting better diets, easing up on calories: Survey. The Straits Times.
https://www.straitstimes.com/singapore/health/sporeans-adopting-better-diets-easing-up-on-calories-survey
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Mainland China
Mainland China was the largest revenue-contributing international market and accounted for 26% of the
Group’s total revenue across all four divisions.
No market would ever be alike and BreadTalk tailored its bakeries to produce breads that were catered to
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the specific tastes and preferences of the Chinese consumer. Also, as the typical Chinese consumer had
an inherent preference to enjoy such confections in a café setting, nearly all bakeries in China were larger
than the outlets in Singapore to house tables and chairs for a café setting. Mainland China accounted for
64% of the bakery division’s revenues from franchise stores in FY2018 (see Exhibit 5)
Southeast Asia
BreadTalk Group also operated in the Southeast Asia region. Over in Malaysia, the Group had signed a
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joint venture with United Malayan Land (UM Land) in end 2017 to open four more BreadTalk and Toast Box
outlets in 2018.
BreadTalk Group expanded its partnership with PT Pura Indah Berkat (PIB) to bring the signature Nanyang
coffee and toast, and other Asian delights to a wider audience in Indonesia. This expanded partnership
leveraged the success of the popular PIB-managed Toast Box outlet at Soekarno-Hatta International Airport
Terminal 3. This partnership terminated in 2019 but the Group continued to operate the Toast Box chain of
outlet in Indonesia.
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In Thailand, BreadTalk Group consolidated the revenues from the bakery business by acquiring 50%
interest in BTM (Thailand) Ltd from Minor Food Group. The consolidation of the Thai bakery business added
47 BreadTalk outlets to its company-operated store count.
THE BAKERY INDUSTRY

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The commercial bakery business could be categorised into two main types:
 Retail bakeries
Retail bakeries were established from a storefront location. The goods were always well organised and
exhibited in a glossy bakery display. Some retail bakeries were also cafés, serving café drinks to
customers who wished to consume the baked goods on the premises.
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 Wholesale bakeries
Wholesale bakeries offered baked goods in large quantities to restaurants, hotels, bakery shops or other
institutions. Storefront and bakery displays were not needed.
The retail bakery industry was growing significantly across the world, due to rising urbanisation and
changing eating habits, with retail bakery sales expected to increase an average of 5.5% per year through
2021.3 There was also a shift towards the increased consumption of snacks alongside in-between meals,4
presenting opportunities for BreadTalk to grow.
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3
Oni the Spokestronaut. (2018, August 9). State of the baking industry 2018 [infographic]. OrderNova.
https://www.ordernova.com/state-of-the-baking-industry-2018
4
Collins, T. (2019, September 12). Snack attack: Are you prepared for the latest trend? The Consumer Goods Forum.
https://www.theconsumergoodsforum.com/snack-attack-are-you-prepared-for-the-latest-trend
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BreadTalk bakery was the market leader in terms of revenue and outlets in the retail bakery business in
Singapore and was one of the largest bakeries globally.5 The success of any retail business was dependent
on its ability to draw customers. As such, the choice of location was vital. BreadTalk’s retail bakery outlets
were strategically located at high-traffic areas which were able to attract potential customers into its stores.
The stores were typically near public transport systems such as bus terminals and MRT stations, as well
as near popular department stores, cinemas and supermarkets.
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BreadTalk bakery also continually reviewed the sales performance of every BreadTalk outlet. Such reviews
not only considered the external factors that might have an impact on outlet performance but also analysed
and formulated strategies to retain a competitive edge.
INDUSTRY CHALLENGES AND TRENDS
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Increasing Manpower Costs
As the global population became increasingly well-educated, fewer in the young generation were enticed
to become skilled chefs, bakers or confectioners. This was the case especially in Singapore. This was
largely due to the common belief and pre-conceived notion that being a chef or confectioner, even at
established F&B establishments, meant working long hours with low pay.6 More would likely opt for the
typical assured pathway of a white-collar worker.
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The nature of BreadTalk’s business was a labour intensive one and its operations relied on personal
craftmanship. The Group had been facing difficulties in attracting local workers to work in the hot, greasy
kitchens of its stores. It had also encountered difficulties in hiring foreigners due to the government’s curb
on companies hiring foreign nationals to ensure companies had places for local hires. In a bid to overcome
manpower shortage and rising manpower costs, BreadTalk looked at leveraging automation and
technology. It invested S$8 million in automation thus far to boost productivity. This enabled them to reduce
headcount in the central kitchens by 50% and increase output per headcount by more than 150%.
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BreadTalk was also increasing automation by moving some frontline production to its backend central
kitchen to improve efficiency and margins.
Increasing Retail Operation Costs
Commercial bakeries, like those who produce bread that were sold at supermarkets, typically required high
capital outlay to purchase baking equipment and a high marketing budget to carry out marketing and
branding campaigns to compete with other brands on the shelves. Retail bakeries like BreadTalk, however,
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faced the additional burden of high retail operation costs due to the need to pay rental fees for a physical
store, alongside manpower to helm it. With shortages of prime real estate, BreadTalk faced increasing
rental costs and together with the aforementioned rising manpower costs, overall retail operation costs were
set to soar, especially in major cities like Singapore and first-tier cities in Mainland China.
Fast-changing Customer Expectations
The confectionary industry was part of the fast-moving consumer goods industry, where the bakery
products were perishable and often sold very quickly. This had moulded the mindset of consumers that the
bread on the shelves should always be new and refreshing. In response, bakery shops and retailers did
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their utmost to produce new bread designs and flavours while adopting new seasonable trends to keep up
with the taste and preferences of the consumers.
5
Technavio Blog. (2018, February 19). Top 12 vendors in the global bakery market 2018. https://blog.technavio.com/blog/top-12-
vendors-global-bakery-market
6
Williams, Z. (2016, December 17). Long hours and low pay the norm for young chefs, says Michel Roux Jr. The Guardian.
https://www.theguardian.com/lifeandstyle/2016/dec/17/long-hours-and-low-pay-all-fare-for-young-chefs-says-michel-roux-jr
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With the advent of e-commerce, the next generation of customers tended to have higher expectations when
visiting a retail store, even for stores in the F&B sector.7 Consumers expected instant gratification, and were
always on the search for products that better suited their needs, at more attractive prices and with good
service or experience. BreadTalk bakery had established itself as a trusted household brand both locally
and regionally, and in order to maintain its position, it needed to continue innovating its products and
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processes to stave off competitors.
To provide a better context, the following trends were affecting the retail bakery industry.
Trend #1: Change in Eating Habits
Bakeries were popular in urbanite societies where on-the-go food such as bread and pastries made a
convenient breakfast, tea break and “in-between meals” snacks for hectic schedules. Recent survey results
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showed that 92% of millennials eat snacks as meals at least once a week, 50% four times a week and 26%
a minimum of seven times a week.8 Millennials were also more spontaneous and adventurous when it came
to food. They enjoyed eating with others and felt less comfortable eating a meal alone. They considered
food an adventure and sought out different, ethnic and artisan foods.9
Urban consumers were also becoming more health-conscious. In tandem, health authorities globally were
monitoring food consumption among their population, with particular emphasis on the maintenance of a
healthy diet. According to Euromonitor, nutritional trends affected bread sales in the United States. 10
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Countries like Singapore and China were focusing more on sugar reduction and promoting the message of
“eat in moderation”. According to the National Nutrition Survey 2018,11 the Singaporean diet had shifted
towards one that was lower in carbohydrates. Sales of wholegrain rice and bread, as well as fruit and
vegetables, had been on the rise. As consumers were more educated on health and wellness, they tended
towards a diet lower in carbohydrates and sugar. Baked foods, which were rich in these, were being avoided.
Despite this phenomenon, the demand for such baked products were still growing globally. One possible
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reason was that bakers were adapting to global health trends by incorporating “better-for-you” ingredients,
such as wholemeal, gluten-free and premium natural ingredients. But this also meant that bakeries needed
to continuously innovate to meet the ever-changing preference of consumers in order to stay pertinent to
the modern consumer.
BreadTalk had discovered the benefits of appealing to nostalgia, with consumers being more likely to
purchase popular treats that reminded them of their childhood. They had also been striking a balance
between churning out these popular local favourites and utilising healthier ingredients to appeal to the
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modern consumer.
Trend #2: Premiumisation
7
Merineau, E. (2018, July 20). How retailers can adapt to rising customer expectations. Forbes.
https://www.forbes.com/sites/forbesagencycouncil/2018/07/20/how-retailers-can-adapt-to-rising-customer-
expectations/#8daf72b1f174
8
Runvik, K. (2017, June 9). What millennials want from snack foods: Report. Food Industry Executive.
https://foodindustryexecutive.com/2017/06/millennials-want-snack-foods-report
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9
Millennial Marketing. (n.d.). Millennials are the tastemakers in food. http://www.millennialmarketing.com/2012/06/millennials-are-
literally-the-tastemakers-in-food
10
Euromonitor International. (2016, November 16). Gluten-free fast becoming new industry standard in baked goods, with high fibre
one to watch. https://blog.euromonitor.com/gluten-free-fast-becoming-new-industry-standard-in-baked-goods-with-high-fibre-one-
to-watch
11
Health Promotion Board, Singapore (HPB). (2018, November 19). National nutrition survey 2018 shows gradual improvements in
Singaporeans’ dietary habits. HPB website. https://www.hpb.gov.sg/article/national-nutrition-survey-2018-shows-gradual-
improvements-in-singaporeans-dietary-habits
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With an increase in the middle-class income population, there was a growing preference for well-decorated,
higher-quality and higher-priced bakeries, especially among the younger consumers. Premium bakeries
selling artisanal pastries were briskly popping up in Singapore and other developed cities. Examples of
such high-end bakeries included the likes of Artisan Boulangerie Co, Carpenter & Cook, Maison Kayser,
Paul, Paris Baguette and Tiong Bahru Bakery. These bakeries were well embellished, with some featuring
café menus, making them pleasant hangouts and meeting spots for the middle and upper working classes.
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Such bakeries had also been effective in luring millennials, who were always on the look-out for unique,
aesthetically pleasing, Instagrammable products.
Trend #3: Digitilisation
As the generation that grew up in tandem with the rise in technology, millennials were reported to spend an
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average of seven hours a day on the Internet.12 Imagine the vast amount of information and content they
were viewing and absorbing at this rate. More than that, millennials also topped as users of social media.13
Both the Internet and social media had made millennials very well connected with their peers and brands,
giving them access to a world of information at their fingertips. Being discerning consumers, millennials
tended to do their research online by reading reviews and comparing options before making a purchase
decision.
BreadTalk bakery did not have an Internet retailing arm for its businesses, and continued to focus on its
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brick-and-mortar retail bakery outlets. Although it had tie-ups with food delivery platforms, the perishable
nature of bakery products and consumer preferences for freshly baked goods had made Internet retailing
a largely irrelevant channel for BreadTalk.
Nonetheless, BreadTalk bakery did invest in digital initiatives to keep up with the technological trends and
not miss out on the various advantages of harnessing digital capabilities. In 2017, BreadTalk bakery
launched BreadTalk Rewards, a loyalty programme and digital rewards mobile app that allowed customers
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to store value, access special discounts and value deals on their favourite products in BreadTalk bakeries
and Toast Box. This initiative aimed to attract loyal customers, which were mainly younger, digitally savvy
customers (see Exhibit 6). The app provided access to a loyalty programme, whereby customers could
redeem points, earned from spending, to get e-vouchers.
Moreover, the incorporation of digital payment options through the app and mobile payments in stores had
complemented the local government’s drive to make Singapore a smart, cashless nation. The provision of
the “Hot and Fresh” notification system to notify customers when fresh batches of their favourite products
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were available was also an innovative concept that leveraged technology. Regarding social media,
BreadTalk bakery had a presence on Facebook, Twitter and Instagram, with the posts primarily geared
towards raising awareness of ongoing promotions and product launches.
BREADTALK’S BAKERY DIVISION
BreadTalk’s bakery division includes the following brands: BreadTalk, Toast Box, The Icing Room, Thye
Moh Chan and Wu Pao Chun. The revenue of the bakery division rose 2.3% year-on-year to S$72.0 million
during Q1 FY2019, with the consolidation of revenue from the Thailand bakery business. Without taking
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this consolidation into account, the revenue would have been lower by 5.7% year-on-year, attributed to
lower revenue from the company-operated stores in Beijing and the franchise business in China, even with
12
Hughes, M. (2019, January 31). Study shows we’re spending an insane amount of time online. TNW.
https://thenextweb.com/tech/2019/01/31/study-shows-were-spending-an-insane-amount-of-time-online
13
Mohsin, M. (2020, February 7). 10 social media statistics you need to know in 2020 [infographic]. Oberlo.
https://sg.oberlo.com/blog/social-media-marketing-statistics
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the stronger revenue posted by the company-operated stores in Singapore. Attempts had been made by
the Group to counter this decline by reviewing its brand positioning and menu offerings to ensure that
products were attractive to their target customers.
Despite this decline, the bakery division continued to pursue creative differentiation and innovation, as well
as its unrelenting quest for excellence. It had clinched numerous local and international accolades.
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BreadTalk
BreadTalk was the Group’s flagship bakery brand. It was known for its unique and innovative concepts that
differentiated them from traditional bakery stores. Recognising that customers had varied and changing
tastes, each retail outlets offered about 150 variety of buns, breads, pastries and cakes. Their outlets were
located at strategic and accessible places with high traffic flow. They also took into account the composition
of their surroundings, such as the presence of departmental stores, cinemas and supermarkets to reach
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out to potential customers visiting neighbouring tenants.
BreadTalk was once again named “Brand of the Year” in the Bakery category at the World Branding Awards
2018–2019. This marked the third consecutive year that the brand had received this prestigious award, and
its fourth win since 2014. To date, BreadTalk remained the only bakery brand from Singapore to be awarded
this title. As of FY2018, there were 863 outlets across the globe (see Exhibit 2). Of these outlets, 118 were
in Singapore, 338 in mainland China, 22 in Hong Kong, and 385 in Southeast Asia and the rest of the
world.14
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Toast Box
Toast Box was a kampong kopitiam-style coffee house serving mainly coffee and kaya toast among other
local snacks and dishes. These Toast Box outlets were typically attached to a BreadTalk outlet or a Food
Republic food court. Emphasis was placed on perfecting the intricate details of each Toast Box store (see
Exhibit 7). This included staff undergoing rigorous training to churn out as many as 450 cups of aromatic
kopi in an hour and designing the stores’ unique displays and decoration themes. The toasts were also of
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consistent thickness at 2.5cm, while its iconic tall butter cone never going below the set 45cm mark (see
Exhibits 8 and 9). Coffee appreciation sessions further exemplified the brand’s attention to detail.15
The Icing Room
As the first of its kind in the market, The Icing Room was a unique specialty concept shop that offered
Design-It-Yourself (DIY) cake decoration services. Customers were provided with a plain cake, coloured
piping cream, and decorative icing pieces for them to customise their very own cake design on the spot
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(see Exhibit 10). Similar to Toast Box, these outlets were usually attached to BreadTalk outlets as a
complementary service offering, and occasionally used to hold cake designing workshops. In addition to
these packages, The Icing Room also offered their own take on trendy cakes like castella cakes, with novel
flavours like the Pong Pong Cake featuring a gooey layer of salted egg yolk filling (see Exhibit 11).
Thye Moh Chan
With its repertoire of traditional handcrafted Teochew baked goods (see Exhibit 12), Thye Moh Chan had
been a true icon and ambassador of Singapore’s food culture and history. It was thus fitting for the brand
to open its first pop-up store at Singapore Changi Airport Terminal 2 on November 2018 (see Exhibit 13).
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Marking the brand’s debut in a prominent national landmark, the store was designed with modern
Peranakan-inspired tiles, light wood enhanced with rose gold accents, and display elements that highlighted
14
BreadTalk Annual Report 2018.
15
Yong, N. (2014, October 10). 10 things you never knew about toast box. TheSmartLocal, Singpapore.
https://thesmartlocal.com/read/about-toast-box
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its signature products and longstanding 75-year heritage. Thye Moh Chan also coincided its launch with a
new durian pastry to appeal to tourists looking for a unique Singapore souvenir to take home. True to the
fruit’s popularity, the durian pastry had been a top-seller at the airport store since launch.
Wu Pao Chun
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Seeing an opportunity in the premium bakery market, the BreadTalk bakery division partnered award-
winning Wu Pao Chun Food Ltd with an 80% stake in the business to operate Wu Pao Chun bakeries in
four key Chinese cities: Beijing, Shanghai, Shenzhen and Guangzhou. Since then, they expanded their
partnership to bring this highly iconic brand to Singapore and Hong Kong. Named after its founder, Mr. Wu
Pao Chun was awarded the Master Baker Title at the 2010 Masters de la Boulangerie. He also won the
World’s Best Baker in the International Union of Bakers and Confectioners International Competition of
Young Bakers (see Exhibit 14). The first mainland Chinese Wu Pao Chun Bakery opened successfully at
Xintiandi Mall, Shanghai on 7 December 2018. BreadTalk bakery division also opened the first flagship Wu
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Pao Chun store in Singapore at Capitol Piazza and continued to grow this brand in the higher-end market
segment.
BREADTALK GROUP’S STRATEGY
BreadTalk Group had several strategic thrusts to better prepare itself for current and future growth
opportunities in the local and regional markets, with two highlighted below.
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A Strong and Dynamic Workforce
The Group understood the importance of nurturing talents. There was a sustainable talent pipeline through
the implementation of an effective recruitment strategy, alongside structured training programmes.
BreadTalk Group had its own in-house comprehensive suite of technical, culinary service, corporate and
leadership training programmes.
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Some examples of their training programmes included:
 High Potential Programme

The brightest, young employees with leadership potential were identified, nurtured and groomed through
mentorship, special programmes and development courses.
 BreadTalk Group Management Associate Programme

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Young talents from reputable tertiary institutions were attracted, with opportunities given to nurture them
further through mentorship and immersion programmes to prepare them for management roles in the
future.
 Skills Future Earn-and-Learn Programme

Trainees undertaking culinary courses at polytechnics would be accepted into this programme, where
they could hone their skills over an internship lasting 15 months. With good performance, students might
also have the opportunity to join specialised roles in the Group’s Research and Development and Quality
Assurance teams.
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 BreadTalk Group Academy

Located at the international headquarters at Paya Lebar, it was the only organisation to be conferred the
status of an Approved Training Centre to conduct and award certification in a bakery and pastry course.
The Academy also offered numerous F&B-related Workforce Skills Qualifications courses.
Focusing on Sustainable Growth
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The BreadTalk Group’s approach to sustainable growth had always been two-pronged, increasing the
efficiency of their backend operational process, while creating new experiences to increase frontline
customer engagement. The Group placed an emphasis on keeping its product and store concepts fresh.
In 2015, it developed a digital system which alerted bakers when bread items required replenishing, which
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promoted freshness and reduced wastage by 20%. Also, consumers could register their phone numbers to
be notified of when a fresh batch of bread was ready and be prompted when certain items were ready.16
Concept-wise, BreadTalk bakery constantly re-designed its stores to freshen up the image of the Company.
It had gone through different evolutions of storefronts, starting off with the “boutique” bakery look to the
current rustic theme (see Exhibit 15). It also launched over 50 new products at its newly renovated flagship
store at Vivocity. This made the customer experience more refreshing as the constantly changing store
environment made the shopping experience less mundane.
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CHALLENGES FACING THE BREADTALK BRAND
The BreadTalk brand faced several key challenges in its two largest markets.
Singapore
The BreadTalk brand in the bakery division currently appealed mostly to customers above 30 years old.
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The BreadTalk Group was keen on attracting a younger consumer group to this brand. Millennials were
known to consume brands more than they consumed specific products. The BreadTalk brand was
positioned as a mid-tier boutique bakery locally and in other countries. In the contest to entice millennials
to choose and purchase its products, however, BreadTalk bakery faced relatively stiff competition from
other boutique or mass-market bakeries, such as Baker & Cook and Four Leaves.
China
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Over in China, competition was much more intense than in Singapore due to the presence of brands that
were more established and had been present in the market for a longer time. Consumer preferences were
also very different when compared with those in Singapore. Chinese brands appeared to be more effective
at nailing down the Chinese consumers’ preferences over time.
Due to the vast geographical distribution of BreadTalk bakery stores in China, regional differences also
posed a challenge as consumer demographics varied between big established cities and more rural areas.
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This might lead to foreign brands, such as BreadTalk, facing issues in applying a “one-size-fits-all” strategy
for the different areas in the Chinese market.
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“Inspiring innovative F&B concepts; delighting the world every day.” This was the vision that BreadTalk
Group had stayed true to since the days of its formation and it served the Group well. In recent years,
however, BreadTalk’s bakery division was underperforming, with losses incurred in China. This was
mitigated by stronger earnings in Singapore and income from the other brands.
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Although the Singapore market was stable, strong and positive for BreadTalk Group, it was small and
matured. BreadTalk Group had an edge in Singapore as it was equipped with knowledge and understanding
of what appealed to local tastes through its extensive experience in the local market. Consumer preferences,
16
Lim, J. (2015, November 21). BreadTalk hopes to “win back trust” with new concept. The Straits Times.
https://www.straitstimes.com/singapore/breadtalk-hopes-to-win-back-trust-with-new-concept
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however, were also changing, especially among the younger population. BreadTalk Group believed that
reinvention was important for local bakeries to stay relevant amidst the rising competition. Going forward,
BreadTalk Group needed to identify how to stay relevant and target the young consumer segment with its
product offerings for its bakery division, especially its BreadTalk brand.
How could BreadTalk Group improve the competitiveness of its BreadTalk brand in Singapore and China?
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What key factors should BreadTalk consider when prioritising which international markets to allocate more
resources to?
yo
op
tC
No
Do
Page 11
ABCC-2021-001
t
os
EXHIBIT 1: MILESTONES
rP
yo
op
tC
No
Do
Page 12
ABCC-2021-001
t
os
EXHIBIT 1: MILESTONES (CONTINUED)
rP
yo
op
tC
No
Do
Page 13
ABCC-2021-001
t
os
EXHIBIT 1: MILESTONES (CONTINUED)
rP
yo
op
tC
No
Source: BreadTalk Group Annual Report 2003–2018

Do
Page 14
ABCC-2021-001
t
os
EXHIBIT 2: PORTFOLIO AND DISTRIBUTION OF BRANDS AND
OUTLETS UNDER THE BREADTALK GROUP
rP
yo
op
Source: BreadTalk Group
EXHIBIT 3A: CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

tC
No
Other Comprehensive Income

Do
Page 15
ABCC-2021-001
t
os
rP
EXHIBIT 3B: SUMMARY OF FINANCIAL PERFORMANCE
yo
op
tC
EXHIBIT 4: BREAKDOWN OF BREADTALK GROUP’S OVERALL REVENUE BY GEOGRAPHICAL

SEGMENT
No
Do
EXHIBIT 5: BREAKDOWN OF BREADTALK GROUP’S BAKERY DIVISION’S REVENUE BY

GEOGRAPHICAL SEGMENT
Page 16
ABCC-2021-001
t
os
rP
yo
EXHIBIT 6: BREADTALK REWARDS WAS LAUNCHED IN 2017 AND CAME IN BOTH PHYSICAL
AND E-CARD FORMATS
op
tC
No
EXHIBIT 7: EACH STORE WAS SPECIALLY DESIGNED WITH VARIETY OF EXQUISITE DISPLAY
ITEMS
Do
Page 17
ABCC-2021-001
t
os
rP
Source: Toast Box
yo
EXHIBIT 8: EACH TOAST MUST BE OF A SPECIFIC 2.5CM IN THICKNESS
op
Source: Toast Box
tC
No
Do
Page 18
ABCC-2021-001
t
os
EXHIBIT 9: THIS HUGE ICONIC CONE OF BUTTER MUST ALWAYS REMAIN AT 45CM IN HEIGHT
rP
yo
Source: TheSmartLocal
EXHIBIT 10: THE ICING ROOM’S DESIGN-IT-YOURSELF (DIY) CAKE DECORATION PACKAGE
op
tC

No
EXHIBIT 11: THE ICING ROOM’S UNIQUE PONG PONG CASTELLA CAKE FEATURING SALTED
EGG YOLK FILLING
Do
Page 19
ABCC-2021-001
t
os
rP
yo
EXHIBIT 12: THYE MOH CHAN’S TRADEMARK TRADITIONAL SWEET TAU SAR PIAH
op
tC
EXHIBIT 13: POP-UP STORE AT SINGAPORE CHANGI AIRPORT TERMINAL 2, DEPARTURE

TRANSIT LOUNGE (CENTRAL)
No
Do
Page 20
ABCC-2021-001
t
os
EXHIBIT: 14: WU PAO CHUN’S AWARD-WINNING TAIWAN LITCHI ROSE BREAD
rP
yo
Source: Wu Pao Chun
EXHIBIT 15: EVOLUTION OF BREADTALK’S STOREFRONT

op
tC
No
Generation 1 – Boutique Bakery (2000–2004) Generation 2 – Eye on Elegance (2004–2008)

Do
Page 21
ABCC-2021-001
t
os
Generation 3 – Jewellery Casing (2008–2011) Generation 4 – Rustic Feel (2012–2020)
Sources: BreadTalk Group
rP
yo
op
tC
No
Do

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t

BREADTALK GROUP OF 2020

across all four divisions.

THE BAKERY INDUSTRY

INDUSTRY CHALLENGES AND TRENDS

Increasing Retail Operation Costs

Fast-changing Customer Expectations

Trend #1: Change in Eating Habits

Trend #2: Premiumisation

Trend #3: Digitilisation

BREADTALK’S BAKERY DIVISION

The Icing Room

Thye Moh Chan

BREADTALK GROUP’S STRATEGY

Some examples of their training programmes included:

 High Potential Programme

 BreadTalk Group Management Associate Programme

 Skills Future Earn-and-Learn Programme

 BreadTalk Group Academy

Focusing on Sustainable Growth

Source: BreadTalk Group Annual Report 2003–2018

EXHIBIT 3A: CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Other Comprehensive Income

EXHIBIT 3B: SUMMARY OF FINANCIAL PERFORMANCE

Source: BreadTalk Group

EXHIBIT 4: BREAKDOWN OF BREADTALK GROUP’S OVERALL REVENUE BY GEOGRAPHICAL

Source: BreadTalk Group

EXHIBIT 5: BREAKDOWN OF BREADTALK GROUP’S BAKERY DIVISION’S REVENUE BY

Source: BreadTalk Group

Source: BreadTalk Group

Source: BreadTalk Group

EXHIBIT 13: POP-UP STORE AT SINGAPORE CHANGI AIRPORT TERMINAL 2, DEPARTURE

EXHIBIT: 14: WU PAO CHUN’S AWARD-WINNING TAIWAN LITCHI ROSE BREAD

EXHIBIT 15: EVOLUTION OF BREADTALK’S STOREFRONT

Generation 1 – Boutique Bakery (2000–2004) Generation 2 – Eye on Elegance (2004–2008)

Sources: BreadTalk Group

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