Know Your Coffee Trends and F&B Business with Yi Yang from Populus Cafe

In this podcast, Yi Yang shares with us his journey with coffee since young, and the early experiences he had with his family business. Here, he talks about digitalisation and riding the wave of trends in this ever-changing F&B industry. 

The answers presented here have been summarized and simplified to make them easier to understand. For a complete and detailed explanation, we highly recommend that you watch the entire video podcast or listen to the audio podcast.

Q: Welcome to the Brick-Mortar-Cloud Podcast, where we talk about scaling stories in F&B and Retail. Today, we’re joined by Yi Yang, from multiple businesses such as Populus, Apricus, Santino Coffee, and he’s here on our show to share more about how he scaled multiple businesses. How did you get into the coffee business?

A: My dad has been operating Sentino Coffee for almost 50 years, so since young I have actually been exposed to coffee. When I was a small kid my dad always makes traditional coffee, so as a kid when you see coffee, you drink it because it’s an adult drink. So that’s kind of in my first few memories with coffee. I think throughout the years, being exposed to coffee made me want to explore my interest in coffee, and eventually help my dad and take over my dad as well.

Q: Apart from coffee as a passion, you’re a One Piece fan. How did this passion relate to any of your initiatives in business or the way you do things in your operations?

A: Captain Luffy exudes a lot of determination and ‘never give up’ attitude. I think that kind of teaches me how to run and operate a business.

Q: 2024 has been a hard year, where people are talking about rising costs and everything. What’s the vision for your business? Are you going to scale more, open more outlets, or look to consolidate the two concepts that you are operating today?

A: For 2023, it has been a tough year. The outlook of 2024, from the beginning, it seems a little bit tough. So for me, 2024 is a year of resilience and really trying to tide through this period. I always believe when there are heavy rainstorms, at the end there will be rainbows and sunshines.

Q: So one of the stories that we chatted about is that your cafe has evolved from a full service to a semi self-serve kind of experience. Can you share a little bit more about that journey and your decision?

A: When e first started Populus, everything is actually through table service. But throughout the years, there are rising costs in staffing so it’s not easy to find staff over the years. One thing that we changed to is QR ordering aside from table service, which saves us a bit of manpower. For management wise, previously all our scheduling has been done through Excel spreadsheet or a piece of paper, so it really takes a lot of time for me and now, the manager. We’re actually using StaffAny, and that saves us a lot of hours, maybe two hours become 10 minutes. So it’s really helpful when you evolve from full sit down service restaurant to QR ordering. 

Q: How did you overcome the challenges in customer’s expectations? Because a lot of times customers go to cafes they want to have someone take their orders and stuff like that. Do you find that there’s this expectations, and how do you mitigate that?

A: To be honest, in terms of customer wise, I think they are very accepting. It has actually evolved to to become a norm in most restaurants and cafes nowadays, so there’s not much expectation. Cost management is huge – starting cost and rental costs are also increasing as well. Rentals are increasing as well, which also translate to rising manpower cost. Ingredient cost has also increased, so it’s been tough.

Q: When you talk about costs, what kind of ratios do you try to operate your business with? Do you have any KPIs or metrics that you chase?

A: For food cost, previously we were looking at about 20% – 27%, but due to the recent challenges of rising cost we’ve actually spiked up to 30 – 35% already. For F&B, your profit margin is already very low, so when that spiked up you can see a very slim profit margin. 

Q: With the synergies with your family business in coffee distribution, do you have preferential rates to help your COGS go lower?

A: At least for Populus and Apricus, there’s actually no advantage because we want a standard price for everybody. And for Populus and Apricus, we’re selling food as well – in fact, food is an even bigger component as compared to coffee. So I don’t think we have any advantage. 

Q: How about any recent successes, or any recent wins? I do see that in Apricus, business picked up really well. Did you guys do some new initiatives that successfully pushed sales and revenue of the business?

A: So for Apricus, we opened this cafe late 2022 – Populus has always been in the CBD area, so we kind of wanted to bring this concept to the Heartlands. I always thought that Sengkang is somewhere where it actually lacks this Australian-driven style cafe. So I grew up in Sengkang, and I always thought ‘Hey, it would be nice to have a cafe in Sengkang’, but there are only a few great cafes, so I thought ‘Hey, why not I just do it myself and bring it to the Heartlands?’ 

Q: Some of the initiatives that you’ve pushed is a lot more family friendly to the Heartlands crowd, instead of the fast moving take-and-go style.

A: So for Apricus, it’s a little bit different than Populus. Apricus we actually do a little play area, and one of the toilets also have a diaper changing area, but maybe because I’m also becoming a dad, so maybe I’m doing this for myself. Reviews wise, surprisingly it’s actually quite positive. Many people actually say that we’re very thoughtful just by putting a play area, so the parents can just have a peace of mind to eat while the kids play.

Q: Do you see the seasonality in the business? During Covid, of course more people work from home, then maybe the business at the Heartlands might do better. Now that people are starting to come back to office, and activity starts again, do you see that movement?

A: So there is a shift in terms of sales, because two of my cafes are in very distinctly different areas: one in CBD, one in the Heartlands, so you can see the shift when the regulations loosen up on work from home initiatives.

Q: Spending power has also been reduced because of inflation. Do you see that also happening in your cafes?

A: We actually noticed that in 2023. I think spending generally has went down tremendously. At the same time, people are travelling out of Singapore as well, so some of the best months that we have historically are during November and December, but last year in terms of sales it has went down. 

Q: Your family business, Santino Coffee, has a large distribution of traditional coffee, specialty coffee and gourmet coffee. Do you also see that movement in the macro level across Singapore? Or is discretionary spending still the same, where people still drink coffee no matter what?

A: I think coffee is a necessity. Having a big overview on specialty, gourmet, and traditional coffee, there is a shift towards traditional mainly because of price point. So imagine paying $7 – $8 for ice latte, or $1.80 for kopi peng, right. So there is that shift, and I think people still need their caffeine. This year, 2024, it seems to be bouncing back again. I think everyone is starting to come back to work in the CBD area, so it kind of balances out.

Q: I think you have a very unique perspective about the coffee trends, as well as the entire coffee industry. We talked about the new brands that are coming right in, being very aggressive and all. Do they work with coffee producers or suppliers, or do they do it themselves?

A: For the start, it really depends from customers to customers. Some of these big chains have their own roasting facilities, then there are some that actually rely on local roasters as well. Most importantly, I think most of them need machines, so we sell them the machines.

Q: I think a lot of people have the dream of having their own cafes one day. Do they often then collaborate with you guys for their own roasts, or do you see more people either roasting coffee themselves or buy whatever you have already toasted? Do you see any trends in this?

A: For independently owned specialty cafes, there’s a huge shift to roasting it themselves. I think with that, you can tell a story as well because you are closer to the source, and you are able to speak that story of bean-to-cup. That’s what a lot of independent cafes are adopting right now. 

Q: How about recent trends in technology? There’s something like beanless coffee, and the whole oat milk trend, have you seen that picking up? How do you find that as a trend?

A: The oat milk trend is definitely there, so to me is that we have to embrace trends. We have to embrace change, embrace trends, and try not to be too adverse to it. I think it’s really about embracing it.

Q: Do you see any split in terms of current consumption pattern? What kind of patterns on milk consumption have you seen?

A: I think the first movement for alternative was soy. That was probably more than seven, eight years ago. But recent years oat milk has been the trending milk right now, and actually for alternative milk, oat milk has already surpassed soy about about more than 90%. Most people still drink normal milk – we’re looking at about maybe 80% and above, at least for my cafes. 

Q: Operating a business in Singapore is very difficult, and you mentioned about certain digitalisation efforts that you take, whether it’s table ordering or scheduling hours. Are there any other initiatives that you take in terms of scaling the business, making more productivity for all your staff and yourself?

A: For our Instagram captions, we use ChatGPT and AI to help with the copywriting and the marketing, which saves me a lot of time. For digitalisation, I think it applies more to Santino. We’re actually building a website and also e-commerce platform for people to access coffee easily, because we’ve seen a big push in terms of consumers wanting to purchase coffee beans online, so that’s the next initiative we want to push through. 

Q: What are some trends that you foresee in the next few years?

A: Coffee prices have been on the rise due to global warming and climate issues, so we may see a bump in coffee prices in the next few years. But then again, like what I always say,  we have to embrace whatever that is coming, and as a business owner we try to mitigate the cost and still try to keep our coffee as reasonable as possible.