Getting the Secret Recipe right

New technologies such as data analytics and artificial intelligence will play a big role in Secret Recipe's business in future, indicates Sim.

SECRET Recipe Cakes & Cafe Sdn Bhd is certainly no stranger to the local food and beverage (F&B) scene. The homegrown brand has seen strong progress over the years, consistently reinventing itself with the times to not only remain relevant, but also to pull in a new generation of customers to sustain its growth.

“Retaining the core of Secret Recipe while still updating the brand is a constant challenge.

“The worry we have is that we’ll grow into an old brand that retains our older customers but can’t appeal too much to newer customers, so we constantly have to change our look and feel as well as the brand message.

“Our marketing campaigns are also not just about selling a product, but our mission and goal that we drive towards together to create those special moments for our customers, ” said its business development director Patrick Sim Chee Hong.

Its Sweet Moments Together (Saat Manis Bersama) marketing campaign was meant to position the brand as part of its customers’ lives, but also to give meaning to the work done by Secret Recipe employees.

Secret Recipe's Mid Valley outlet has recently seen a revamp to refresh its look and feel.

Of late, Secret Recipe is focusing its efforts on the digital transformation journey it started earlier this year, starting with the adoption of a new point-of-sales (POS) system.

He added, “There are a lot of benefits to implementing a new POS system. It cuts down unnecessary manual work that doesn’t contribute to the business and beyond that, we get access to data analytics for better decision-making.”

The plan is to first implement the change in the outlets owned by the F&B chain, before rolling it out into its franchisees’ outlets. Of the 300-plus Secret Recipe has nationwide, it owns 40%, with the remainder operated by franchisees.

“It’s a bit of a painful journey and we’re targeting the change in all the POS systems by mid-2020, ” he said.

The move forms the basis for Secret Recipe’s loyalty programme, to be launched towards end-2020. Specifics for the programme are still being finalised, especially aspects concerning how it can integrate or leverage the strength of various partners.

With clean data being the fuel for actionable analytics, Sim highlighted the importance of using such information to better target customers, as well as to boost upselling and cross-selling opportunities.

He explained, “The data will enable us to understand our customers a bit more, so we can do personalised marketing, especially when we implement our loyalty programme in the near future.”

At the moment, Secret Recipe is also testing the waters with several partners in the market to draw traffic to its outlets. Among these are partnering banks to offer special promotions to credit card holders, working with e-commerce platforms such as Shopee to sell Secret Recipe Ipoh Black and White Coffee instant coffee sachets.

The motto for Secret Recipe’s management is to constantly challenge themselves with new ideas by undertaking different initiatives or strategies.

He shared, “We started working with Shopee last year to sell our Ipoh Black and White Coffee online in September to October last year.

“As a company, we like to try new things. Our philosophy and value is that we like to give things a shot, since we believe it’s important to constantly try. We already have our outlets and people are already dining here, so is there a way we can increase revenue?”

For the instant coffee sachets, the long shelf life is ideal as the products can be placed near the payment counter to encourage sales.

Since its inception in 1997, Secret Recipe has remained a family business, with the second generation already being groomed and stepping up to the plate in order to bring the F&B chain to the next level.

Sim admitted that family-owned companies generally face management issues, which is why he stressed that business has to be run as professionally as possible, by also bringing in outside experts into management to weigh in.

Secret Recipe remains one of the most popular brands for cakes and desserts.

Currently, the international F&B group has seven brands under its umbrella including Secret Recipe, Beyond Veggie by Secret Recipe, Hokkaido Baked Cheese Tart, Hey Cha, Red Lobster, Roast & Grill and Alibaba & Nyonya. With the exception of Red Lobster, the rest of the brands were conceived internally, with the last two launched in 2018.

In the next two years, Sim said he would be working on further technology adoption, including in-store ordering through tablets to quicken the process, cut down on costs and address the labour issue.

“Most importantly, artificial intelligence can also learn how customers order and use that to recommend other products to upsell or cross-sell for higher average tickets or checks, ” he said.

Additional improvements in the back-end system is also on Sim’s to-do list, in the interests of efficiency and productivity. It has already opened 15 to 16 outlets this year across the country, on track to reach its target of 20 by year-end.

The F&B chain is a three-time winner of The Star Outstanding Business Awards (SOBA), winning multiple awards first in 2013 and then again last year, following its first win for Best Brand in 2012.

What is striking to note is that for both the years it participated, it took home the Platinum Award for the Best in Marketing and Best Brand, the only difference being that it won in the category for companies with turnover above RM25mil in 2018.

An additional award it won was for Malaysian Business of the Year back in SOBA 2013, while last year, its group president and chief executive officer Datuk Sim Leong Thun won the Par Excellence Achievement for Male Entrepreneur of the Year (above RM25mil turnover).

“We participate in SOBA every few years to see where we stand in terms of the market and how we’re doing. It’s a good opportunity to compile what we’ve done and see our milestones, since as a brand, we want to make sure we’re still relevant in the market.

“For the teams directly involved in the process, it also acts as a motivation booster to see the impact they make on the company that they can be proud of, so it’s something we want to continue, ” he said.