An interview with Steen Puggaard – CEO of ‘4 Fingers Crispy Chicken’, and keynote speaker at our upcoming Cegos L&D event.
The fast food industry is big business in the Asia Pacific region, with established brands like McDonalds and KFC having been here for decades. But the apparent dominance of those brands is under threat from smaller companies entering the market and doing things differently.
Steen Puggaard is the CEO of one such Singapore-based company – 4 Fingers Crispy Chicken. As the name suggests, his restaurants specialise in fried chicken dishes, but with a classic Asian touch. In fact, the secret recipe was inspired by a trip to Koreatown in New York City, and the chain – now also operating in Malaysia and Indonesia – offers a variety of dishes designed to appeal to the Asian palate.
It’s not just the unique taste drawing the crowds, however. Steen has steered the company from its struggling origins to its current success by being a disruptor. Or, as Steen himself likes to put it, thinking like a corporate and acting like a start-up.
“We have re-invented the conventional, and broken, quick-service restaurant business model,” he says. “Smaller units with higher space efficiency, leaner staffing, higher value output (in terms of consumer spending) and a simpler supply chain means much better unit economics and scalability.”
Economies of scale are all well and good, but what sets 4 Fingers aside from the more established brands?
“Our food is genuinely tasty, and made of a mash-up of pan Asian ingredients; all fresh and made in-store,” says Steen. “We work with a celebrity chef for new dishes, and don’t advertise in traditional, above-the-line media. Instead, we promote our brand using social media and the press.”
The brand values of supporting the under-dog and having big ambitions – a necessary trait in a super competitive market – are also central to success. This is not just words and marketing fluff, however. It is represented in actions, such as sponsoring local athlete, Aisyah, in the 2016 Olympics and hiring rebellious street artist Sam Lo to spice up store decorations.
Naturally, the bigger brands, sensing a threat from the snappy young upstarts, have tried to adapt by a mix of repositioning, changing perceptions of food quality and upgrading their stores.
“But this doesn’t go down well with consumers,” says Steen, “because it is not credible. The modus operandi amongst established competitors still seems to focus on low price and discounts. The combination of high store count and dropping demand makes this a matter of survival for them. We do not engage them in these tactics, but instead focus on a simple menu and great execution.”
The steady decrease in demand for established brands, along with increased choice, means F&B consumers are now being more selective.
“The paradigm has to shift away from one that seeks to drive customer loyalty to a brand,” says Steen. “Millennials, particularly, are quite brand promiscuous, so the only way to remain relevant is to show loyalty to them, not expect loyalty from them.”
Around 28% of F&B outlets in Singapore go bust every year, and the average profitability is negative 8-10%. So the survivors will be the disruptors – those lean, flexible and creative businesses that pitch effectively to a changing market, not those weighed down by tradition and complacency.
Steen Puggaard will be a keynote speaker at ‘Leading and Managing in the Age of Disruption’ – a Cegos special event on Friday 19th May, 2017. Click here for details and registration.