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Cream of the Crop

For most small businesses, the idea of become a listed company is likely to remain a pipe dream. But Tsit Wing Coffee has always had big ambitions.

“Tsit Wing began as a family business, but the goal has always been to grow and scale up,” said Keith Wu, Executive Director and Group Chief Operating Officer. “And listing the company was the only viable way to achieve that.”

Rolling back the clock some 87 years, Tsit Wing started as a family-owned grocery store specialising in the trade and wholesaling of coffee and black tea. Over the years, the company acquired factories, set up a head office and expanded its client base from local customers to companies across the Pacific Ocean. In 2018, Tsit Wing listed on the Main Board of the Hong Kong Stock Exchange, and is the largest business-to-business coffee and black tea service provider in the city.

Going public was the way the company decided to achieve its expansion goal, because to be listed means to be professional and to have transparency. Both these elements are important in attracting investment and customers. Today, the brand is no longer managed by a family, but by a full team of professionals.

 

Not just coffee

Despite its name, Tsit Wing has always been about more than coffee.

Tsit Wing currently sells more tea than coffee, as the former has a much wider application in beverage production, including milk tea, lemon tea and flowering tea.

Collaborating with other brands is one way that Tsit Wing has grown its presence in the beverage territory. A few months ago, it joined with Hong Kong McDonald’s to launch a series of “cheese cap” drinks, which have a top layer of creamy milk foam and are popular among young consumers. Tsit Wing is also developing its own special menu of drinks, and its version of the Hong Kong classic salted-lemon soda is expected to hit shelves soon.

Besides its success in the coffee and tea sphere, Tsit Wing is also a one-stop shop for services in the food and beverage sector, which range from market analysis, menu suggestion and recipe development to purchasing, production and promotion.

In addition, the company offers after-sales services including staff training and equipment repair, and Tsit Wing has the largest beverage service maintenance team in Hong Kong.

Together, this makes up what Tsit Wing regards as “a tailor-made solution” for its broad range of clients that include fast-food chains, old-school cha chaan teng, theme parks and airlines. Among all of the FEHD-licensed food premises in Hong Kong, roughly 60% are served by Tsit Wing.

 

Eye for opportunities

One key factor in the company’s success has been its sharp eye for opportunities. As early as 2009, Tsit Wing set up a 10-year plan and established an integrated production and service centre of 73 acres in Dongguan, which is now at the heart of the Greater Bay Area (GBA).

That decision was a shrewd one, as evidenced by the rapidly growing Mainland market and the enthusiasm for new beverage brands among Chinese consumers. “With this facility in place, we aim to satisfy all the needs of our customers within the ‘one-hour living circle’ (in the GBA).”

The company has also expanded into the frozen and precooked food market, and has been working with overseas partners in countries including Japan and Thailand since 2013.

“We noticed that people increasingly favour convenience stores, as the pace of living is faster and time is becoming more of a luxurious commodity,” Wu said. “Therefore, we introduced into our trade food products, all precooked and ready to be consumed, to fulfil that demand in the market.”

Data-driven model

Despite its long history, Tsit Wing does not take its success for granted, and Wu, who joined the company in 2005, said that the hardest challenge is to ensure the company keeps going from strength to strength. To stay abreast of developments and maintain its leading position, Tsit Wing continues to evolve.

The fact that 4,000 clients can be looked after by a sales team of just 20 depends on the application of data-driven management systems.

Over the past decade or so, Tsit Wing has adopted a series of Enterprise Resources Planning (ERP) and Business Intelligence (BI) systems. These are key to the company’s everyday running, and their applications range from routing deliveries to sales analysis. The data provides traceability and a stable supply across their product range, and also helps the company understand their clients’ needs better and derive appropriate strategies.

“All of our staff know that every observation, proposal and decision they make has to be backed up by data.”

When it comes to marketing, Tsit Wing prefers to focus on “culture building” rather than direct advertising with brand logo and product pictures.

The founding of the Tsit Wing Group Coffee Connoisseurs Academy is an example of this approach. By providing coffee theory and tasting courses to the public, the Academy aims to build a customer base that appreciates coffee culture.

Wu added that sustainability is also an important part of the company’s vision, because “a customer will always prefer a product that is sustainable and environmentally friendly.”

This approach to marketing means that consumers come to Tsit Wing, not the other way around, Wu said. “That is what I mean by us pulling, not pushing, our customers.”

 

Company: Tsit Wing Coffee Co Ltd

HKGCC Membership No. : HKT0755

Established: 1932

Website: www.twcoffee.com

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