Palatable sector but plateful of challenges

The retail food and beverage (F&B) industry attracts significant investor interest, ranging from equity portfolio funds and private equity firms to retail investors. Its appeal lies in the sector’s healthy cash flows, scalability and visibility, as consumers easily recognise well-known food brands.

A notable example is Oriental Kopi Holdings Bhd, a local kopitiam chain that listed earlier this year with just 20 outlets. Investors eagerly sought its shares, priced at 20 times historical earnings.