| Phongphot's Pioneering Approach Pays Dividends | |||
| UPDATE : 9 February 2010 | |||
Phongphot's first venture – Kruathai Authentic Thai Restaurant – opened its doors in 2001. Since its establishment, Kruathai, which means 'Thai kitchen', has targeted customers in the upper demographic echelons, broadly covering intermediate managerial, administrative or professional executives up to higher managerial, administrative or professional executives. An opportunity to diversify “After graduating [in engineering], I visited the Philippines to look for a suitable business channel. I discovered that the country manufactures and exports furniture to numerous markets around the world and decided to import rather outdated brands [of furniture] to Thailand,” Phongphot says. During that time, Phongphot regularly visited the Philippines in order to manage a number of significant orders. When meeting Filipino friends with a taste for Thai cuisine, they would often ask him whether or not he had considered investing in a Thai restaurant there. Their queries ultimately became a form of inspiration. Further exploration While many of Phongphot's friends in the Philippines expressed a love for Thai cuisine, he realized that he would need to find out how the majority of Filipinos felt about it. To get a better understanding of the situation, Phongphot took many Filipinos to eat at Thai restaurants, while he sometimes chose to prepare meals for them personally. While the feedback was largely positive, some guests remarked that Thai food was rather spicy, although they did not consider that to be a major problem. Phongphot also studied consumer behavior in the Philippines and discovered that most Filipinos prefer to dine out. To put this in perspective, Phongphot said he discovered that more Filipinos than Thais eat out at a restaurant during a one-week period. Phongphot also discovered that restaurants located within department stores tended to be filled with diners throughout the day. This was one reason the food service business in the Philippines had continued to grow strongly, and was a significant motivating factor behind Phongphot's decision to compete in the Philippines. Phongphot decided to invest a total of about two million pesos (1.4 million baht [US$43,000]) in 2001 in his first Kruathai Restaurant in Cebu, a city on the island of Visayas in the south of the Philippines. Kruathai is a small, two-story restaurant, which can accommodate up to 80 diners. Phongphot said he adjusted the menu to suit the needs of local consumers, partly by reducing the quantities of chili used in dishes. Nevertheless, the use of a Thai chef ensured the authenticity of the dishes served up. “I invited members of the media and celebrities to join the grand opening, generating a good deal of interest. The number of diners rose strongly within just a short time and it became so popular that all our tables were quickly booked up. Eventually, Kruathai became a hit among residents of Cebu.” Further evidence of the restaurant's success emerged when a second and third branch opened up in the city, both featuring a somewhat different kind of ambiance. Eventually, Kruathai became a franchise operation.
“Many folks in a number of different cities that didn't have a Thai restaurant expressed an interest in our franchise option, but I became unsure of whether or not Thai cuisine could be operated in such a way. Since it uses a wide variation of ingredients, most of them have to be imported [from the kingdom], which results in a relatively high cost of investment,” Phongphot points out. Some franchisees used ingredients produced domestically (in the Philippines) and this affected the taste of the dishes. “I put a halt to some franchises as I wasn't able to control the quality of the food. Such a situation could actually destroy the reputation of the whole business,” he says. Kruathai now has seven branches in the Philippines (four outlets and three franchises). The branches are located within five different major cities (Bacolod, Cebu, Davao, Iloilo and Manila). In 2009, Phongphot expanded his geographical reach by opening a joint venture operation in Guam, a small island located in the Pacific that is administered by the US. “Every two months, a container of goods, such as fish sauce, pepper, salt and sugar arrived from Thailand. This is the key to maintaining Kruathai's authentic Thai flavors,” Phongphot says. In order that there is not a shortage of supplies and that materials are not wasted, the logistics system and stock situation needs to be carefully monitored. Barriers to entry Kruathai is now the biggest restaurant group providing consumers in the Philippines with authentic Thai cuisine. It is estimated that there are only about 30 Thai restaurants in total in the Philippines, of which about 50% are operated by Thai nationals. Phongphot says one reason there aren't too many Thai restaurants is because the Philippines has some strict rules and regulations regarding the establishment of a restaurant, while food service businesses are supposed to be restricted to Filipinos. This does not mean that it is impossible, but entrepreneurs should make sure they don't fall foul of such restrictions. Running a restaurant in the Philippines means doing so with the help of a tried and trusted trading partner. Such a vital step would prevent the entrepreneur being cheated, he says. “The law and regulations regarding the opening of a restaurant in the Philippines are similar to those found in the US,” Phongphot points out. Since the Philippines is made up of many small islands, each tends to have its own distinctive procedures. 'Aim high' Phongphot says opening a restaurant in the Philippines these days requires an investment of about three million pesos ($64,000). He says in terms of potential customers, entrepreneurs should aim high ('B' and above). Since it requires a good deal of preparation and the ingredients are expensive, less wealthy customers would typically not consider this kind of meal. In terms of the location of outlets, Phongphot says that restaurants located in department stores are more likely to bag 'walk in' business. But there are disadvantages of opening an outlet in a department store, too, such as the relatively high rental charges, as well as certain restrictions concerning operating hours.
Phongphot says Thai cuisine has definitely grown in stature in the Philippines over recent years. “Thai cuisine is now well received among Filipinos and is one of the three most popular styles of food in the country,” he says. Phongphot says one reason many Filipinos have taken to Thai food is from stints living overseas (in the US or Europe). Once these migrants return home, they seek out Thai cuisine once more, he says. Kruathai has undoubtedly played a major role in building a name for Thai food in the country. The restaurant brand is said to be among the five most reputable foreign restaurants among Filipinos, while its outlets are commonly chosen as a place where VIPs, including ministers or other high-level politicians, are entertained. According to Phongphot, the best known Thai dishes in the Philippines are pad thai ('Thai stir-fried rice noodles'), khao klug kapi ('fried rice with chili paste, omelet, dried shrimp and long beans'), tom yum koong ('hot and sour shrimp soup'), poo pad phong kari ('curried fried crab'), tod mun koong ('deep fried shrimp cakes') and pla rad prik ('deep fried fish topped with sweet chili sauce'). In terms of presentation, Phongphot points out that in the Philippines a more Western approach is used, so one course is served after another rather than several dishes being served at the same time as is the case during an authentic Thai meal. He says that the food also needs to be fully seasoned prior to being served as Filipinos typically do not add any form of seasonings or sauces at the table. “For example, we don't serve noodles with seasoning condiments as is the case in Thailand. We have to cook it 'just so', and this has been one of the main reasons our eateries have become so popular.” Finally, Phongphot revealed that the most important factor in terms of the overall success of Kruathai. “Each operator must be proficient at cooking every item on the menu and make any adjustments as necessary.” – Translated and republished thanks to the kind permission of ASTV Manager. This article is based on another report published in issue 80 of SMEs Today magazine. source : manager.co.th | |||
วันเสาร์ที่ 20 กุมภาพันธ์ พ.ศ. 2553
Phongphot's Pioneering Approach Pays Dividends
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