La Kaffa International Co., Ltd. (2732) New York Flagship Store has its grand opening in Flushing Chinatown, New York on August 26th, proclaiming the entry of Taiwan’s first multi-brand chain restaurant business listed on the local Emerging Stock Market in New York. The flagship store made up of three of the company’s brands Kingza, Chatime, and Bake Code, in addition to flagging and setting up branches in the US East Coast Market, will also give New Yorkers a chance to experience the popular Asian food culture. On the day of the event, Deputy Division Director Mr. Chen, Fong-Yu of Taipei Economic and Cultural Office in New York, Chairman Li, Jin-Piao of The Taiwan Merchants Association of New York, Director Mr. Danny Kadishson of Mayor’s Office of Economic Development, and other distinguished guests will be present to cut the ribbon and deliver a speech.

Creating International Business with Pearl Milk Tea as the Outpost

La Kaffa that started off as a coffee store in Hsinchu, Taiwan, has conquered the world with its Signature pearl milk tea. Spread across 29 regions and countries and over 80 cities across four continents, it is now the largest international chain food business group in the world. In Australia, Malaysia, Indonesia, and other Southeastern Asian countries, the company has long been the leading leisure take-out tea beverage brand. Currently, the company has seven brands, including: Chatime, ZenQ, La Kaffa, Wagokoro Tonkatsu Anzu Ginza, BakeCode, Chatime Lounge, and Duan Chun Zhen Beef Noodles Restaurant.

In recent years, La Kaffa has targeted the North American markets for active expansion. In 2011, La Kaffa’s brand Chatime entered the US west coast. Upholding “group war and multi-branding”, planning for gaining a foothold in the US East Coast began in 2014. After a thorough assessment of the food consumptive market demand, pork chop food brand “Kingza” was born, while brands Chatime and Bake Code were also introduced into New York to join the front-line of the food battlefield and compete with cuisines from around the world.

Optimism about the Development Potential of the US East Coast Market

La Kaffa has years of successful experience in international market expansion and international brand creation. The company is well aware that among the factors leading to success, consumer traffic, in addition to food quality, is the key. Chairman Wang Yao-Hui said that it is Flushing’s immigrants from 70 countries that led to the decision to enter Flushing Chinatown in New York for a new beginning. Additionally, New York is an important area for the Asian population clusters and the convergent location of Eastern foods. The New York Flagship Store is located next to Hyatt at the new building area of One Fulton Square, where hotels, malls, restaurants, and shopping centers are gathered. It is also near a metro station that brings business opportunities to Flushing Chinatown, hence the location choice. The Asian population in New York area is the target customer group. Since Flushing features multinational immigrants, La Kaffa’s food style can be presented to people from around the world. Chairman Wang said the company’s short-term development is to launch stores in U.S. regions with more Chinese people, such as Seattle or California. Looking ahead, he hopes to launch at least 150 Chatime stores in the US market, just as what has been done in ASEAN regions, including Malaysia and Indonesia.

Global Revenue Growth and Immeasurable Development Outlook

La Kaffa’s cumulative revenues amounted to $1.149 billion from January to July this year, an increase of 28.4% compared to the same period the previous year. From the regional perspective, La Kaffa’s global revenues for the first half of this year from Taiwan, ASEAN markets, European and US markets each took up 30%, an indication of the company’s steady growth in terms of its global layout. In particular, the “food” portion took up 26% of the overall revenues, while La Kaffa’s two major food brands “Wagokoro Tonkatsu Anzu Ginza” and “Duan Chun Zhen Beef Noodle Restaurant” also achieved significant growth ratios that contributed to the company’s revenue growth. On the other hand, in terms of US market development, brand Bake Code currently has two branch stores in California that continue to expand in total annual revenues.

La Kaffa’s New York flagship store comprised of three food brands adheres by the new food business strategy of “compound food business operations”, thus the greater management complexity. With La Kaffa’s rich experience in international food brand management, assessments were conducted over a period of six months in order to ensure smooth operational processes, marketing operations, and brand exposure, thereby achieving its advanced business goals set. The short-term goal is to achieve revenues from a single store three folds those of stores in Taiwan, as well as revenues approximating those in ASEAN markets, 30% of la Kaffa’s total revenues.

Passing Stringent US Food Requirements and Labor Test Laws and regulations from different countries are an issue faced by the food industry during overseas store launch, whether in terms of business district location selection, food safety standards, public facilities, hardware and equipment, logistics, and talent recruitment. First, a store has to pass inspections in accordance with the US food safety laws and regulations. The Untied States has very strict standards and norms for public facilities, hardware, and equipment when setting up a new store. In view of this, La Kaffa, despite its years of experience in international food brand and store launch operations, hired local health and safety advisors to provide detailed guidance on food freezing, refrigeration, and cooking. In addition, the machines and equipment obtained NSF and CE certifications, and all the processes have undergone strict inspections and tests of the US government, so as to ensure the highest standard of food and dining services and quality for consumers. La Kaffa successfully secured clearance step by step, proof of its high-standard food safety quality and giving it an edge in overseas store launch.

Secondly, manpower support and training are problems soften encountered by companies during overseas expansion. In terms of overseas branch manpower or training strategies, La Kaffa made arrangements for brand supervisors in Taiwan to station in its New York flagship store six months prior to the store’s grand opening to carry out professional training standard processes, staff recruitment, and education training that ensure food service staff maintain excellent service attitude and quality. At the same time, insights on the cultural differences between Europe, the United States, Taiwan, and Japanese foods were also shared to provide the best service quality. At present, the flagship store has about 60 staff members. With staff from Chatime and Bake Code direct-sales store and franchise stores included, La Kaffa currently has more than 225 staff members in the United States. Superiority in manpower training management and service quality can be anticipated.

Having experienced the pioneering and investment phase of US market development, La Kaffa has gradually familiarized itself with the US market consumer demand. Now, with the launch of the new compound restaurant, business operations are expected to become more diverse. After the development of this private business model, the duplicate branch launch costs will be greatly reduced, while speedy store launch and revenue and profit boosts can be anticipated.