10 Lessons For The Potential Entrepreneur – The Papa Palheta Story
Every time another new café opens in Singapore, my train of thought goes in two extreme way – one in anticipation of discovering something fresh; the other wondering how long that new shop can survive.
Welcome to Singapore, where new third wave coffee cafes open every other day (not exaggerating), but almost every single one of them face the same few problems – high rental, low supply of labour, close to nil marketing, lack of originality, and having more discerning customers.
Some customers are otherwise known as the “café hoppers”. There may be a certain sudden wave of customers during the initial opening, but if products don’t deliver, they will NEVER return. And also make sure their friends (and followers – everyone has followers to a certain degree) don’t return.
The Third Wave Coffee
A quick coffee history: The first wave began shortly after the World War when instant coffee was easily accessible to households and in the rage for its stimulating qualities. The second wave when Peet’s, Starbucks and the other power players introduced gourmet coffee and made coffee-drinking into a lifestyle.
The third wave coffee is brought forth by indie cafes, producing coffee which is considered ‘artisanal’ and to be appreciated for rather than a common product. These indie café serve ‘specialty coffee’ made with high-quality beans scoring 80 points or more on a 100-point scale.
Previously, we drink coffee because we need the caffeine, but now we drink coffee because it tastes good. Supposedly.
The Papa Palheta Story
Papa Palheta started as a small coffee-roasting and wholesale business at Bukit Timah. Today, the brand has co-owns 4 cafes or more – Loysel’s Toy, Chye Seng Huat Hardwave, Coast and Company, and Pulp in Malaysia, and a distributer, educator, consulter and indeed a third wave coffee market leader in Singapore.
To any new businesses and entrepreneurs, and not just new café owners, perhaps these are some 10 lessons we can learn from them.
Papa Palheta started with coffee roasting, but they have diversified to café-business, wholesale, espresso machine distribution, consumer education and merchandise. This holistic approach essentially meant they are the one-stop centre.
The move to Chye Seng Huat was initially a functional one, but proved that their cards were played right. When Papa Palheta first opened their café arm Loysel’s Toy, that meant endless transportation to and fro Hooper Road where coffee was roasted in the west and Kampong Bugis in the east.
Consolidated operations at the flagship Chye Seng Huat Hardware saved times and effort in logistics, making the business more productive.
3. Set The Trend
Tyrwhitt Road. Who would have known where it was 2 years ago? Today, the Farrer Park and Jalan Besar districts has transformed into a café hotspot with no less than 10 cafes in the vicinity. They took calculated risks which worked. While there are copycats, they never quite overtook their popularity.
They were the first, and would always be remembered to be the first.
4. Be The Trend
In the past, we eat with our mouths. (Yes, duh!) With social media sharing, I can safely say we eat with our eyes, and perhaps mouths. In such a context, a cup of coffee without its latte art is unthinkable. And let’s not forget the ‘influence’ about the individual.
A young nubile ‘non-coffee’ customer may describe how ‘light’, ‘bright’ or ‘acid’ the cuppa is, takes out the handphone for the token latteart art shot, hashtag in all possible ways, and uploads to instagram. The next thing you know, friends and followers would all be down to repeat that same act.
The cycle continues. Your café becomes the next big thing.
5. Catalysing Better Workers -> Better Customers
The first thing you notice about enter Chye Seng Huat is a wide island bar providing a 360 view of the café with baristas in the middle. They are like performers. This configuration also helps to break down the barrier between the baristas and the customers. If you do not know anything, it’s okay. Just ask.
When customers learn, they become more knowledgeable, more discerning and form better relationships with the company.
6. Catalysing Better Service -> Better Customers
Papa Palheta have also launched a coffee subscription service called ‘Must. Drink. Coffee.’ that delivers 500 grams of freshly roasted beans to customers’ doorsteps each month. Such personalised service is seldom seen (especially for cafes), but really adds in building customer loyalty.
7. Workers To Upskill
“Where’s the coffee from?” Trying asking this question to a barista. The not-so-informative ones may tell you, “Errr… from Papa Palheta? From Africa?”
A true third wave café barista may say “It’s a Throwback with composition from Brazil Cerrado and Indonesia Ratawali Valley. For taste notes, it’s a dark-chocolately, rich and heavy body blend.”
Yes, we totally get it. Some baristas can tell you not only which country the coffee is from, and even farms to specific plot of lands.
8. Workers To Second-Skill
This is one business so willing to share, conducting courses of many kinds from latte art, brewing techniques, to roasting tours, to a WDA approved specialty coffee session. An attendee can understand what sets specialty coffee apart and learn to serve specialty coffee in 3 days.
Attendees have come from various unrelated backgrounds such as law and finance, and they pursue coffee courses simply because of a keen interest in making good coffee.
Taking up a second skill has been a recent hot topic after NTUC Labour MP Patrick Tay publicly asked employers and the government to give more support to PMEs for second-skilling, from making more funds available for courses to allowing learning during office hours.
Although I am just a normal coffee-drinker, I am tempted to sign on this course as it is an avenue for me to learn more from the experts, and appreciate coffee-drinking even better.
9. Go Local
Papa Palheta works with several local partners, and keep close relationships with them to form synergy – for example, space sharing in a land-scarce Singapore. Cafe Coast and Company at Siglap Drive is shared with local bike firm Coast Cycles, while its collaboration at Malaysia is with printing company Art Printing Works.
Who could imagine how coffee and bicycles can come together? And latte with ‘ang gu kueh’ anyone?
10. Go Regional
Pulp at Bangsar Kuala Lumpur supplies coffee equipment and roasted beans both at retail and commercial level, comes equipped with a cupping room, a service workshop and a cafe which serves coffee and pastries.
With the booming third-wave cafes in our neighbourhood countries, this spells opportunity for us to expand beyond our shores.
I remember going to a new café and the ‘barista’ didn’t get my coffee served until 10-15 minutes later.
“Sorry I am new. I am not sure how to use the machine.” Needless to say, my coffee tasted bad and I never returned.
Rather than just jump on the bandwagon, perhaps it’s appropriate to draw up a Progressive Wage Model where cafés invest in proper barista training, plus incentivise baristas to be more productive and responsible for their own careers in the F&B business.
There are many cafes opening up. We should be happy that these entrepreneurs are living a dream, but sometimes we can’t help but think some are moving along a trend without much training in the area, or with concrete long-term business plans.
Start a dream, live a dream, but continue to learn to stay in the dream.