Counter culture

PUBLISHED : Thursday, 18 September, 2008, 12:00am
UPDATED : Thursday, 18 September, 2008, 12:00am

Last month, Massimo Santovito accepted a job as head chef, not of a restaurant, but at a grocery store. Santovito's boss, Massimo Sfriso, is convinced his chain of upmarket Italian food and wine shops, Il Bel Paese, is slowly transforming into a chain of restaurants right before his eyes.

'It's a natural evolution,' says Sfriso. 'Our customers don't want to cook at home, but they don't want a long drawn-out meal at a restaurant, either. They want a place that helps them to do both in half the time.'

Following customer requests back in 2001, Il Bel Paese was one of the first speciality food shops in Hong Kong to begin serving meals, a portion of the business that now brings in 35 per cent of its revenue and is growing 10 per cent annually.

The restaurant-shop concept has been gaining popularity. But although consumers are relishing the extra service, store owners are discovering that the model has drawbacks as well as advantages.

Ellen Leung Ka-ying, owner of NaturoPlus, which opened in January, says hybrid shops are more complicated than restaurants or food retailers. 'You can't get the best of both worlds without doing twice the work. For example, your staff needs to learn how to do retail management, as well as cook, clean and serve customers.'

Nevertheless, the cafe portion of her store has grown and now accounts for more than half of operating revenues.

Paulo Pong Kin-yee, owner of Classified in Sheung Wan, who opened the Classified Mozzarella Bar in Wan Chai earlier this month, says the staff-to-customer ratio at Classified is higher than at sister outlets the Press Room and the Pawn, despite its smaller size and customer base.

Pong also points out difficulties in sourcing quality ingredients. 'Even by combining a retail and restaurant component, hybrid shops still don't have the scale of a supermarket or large restaurant. For the first eight months after Classified opened, we were not profitable. Now, finally, with the joint demand from Classified, the Press Room, the Pawn and the new Mozzarella Bar, we've been able to increase volume and get some price benefits from suppliers. I'm not sure Classified on its own would be competitive.'

Sfriso recalls a similar struggle, saying, 'I thought the initial Il Bel Paese store was going to be my first and last. The first time I scoured all of Italy and ended up with just two or three producers willing to ship all the way to Hong Kong in the small quantities we needed. The rest all required a full container. Now, with four stores, it has become easier.'

Il Bel Paese and NaturoPlus have launched wholesale and catering offshoots to help sustain business while they continue to expand.

But with larger orders, there also comes the added consideration of storage facilities. Leung found room in her budget for temperature-controlled warehouses in Tsuen Wan for NaturoPlus' wines and cheeses, and Pong may need to find more storage space come the holiday season, when Classified will offer gift hampers filled with chocolates, jams and teas.

At three-month-old Spuntini, marketing director Rhys Adams says incorporating both restaurant and retail was the intention from the start. 'It made perfect sense. We use canned products from Moreno Cedroni [an Italian chef with two Michelin stars] for our signature dishes, so why not sell both the dish and the can?'

Adams admits that seeing the cans may be a turn-off for customers who associate fresh ingredients with quality dining. More than 60 per cent of the operation's revenue comes from the restaurant yet up to 20 per cent of diners buy products to take home after sampling them in their meals.

Leung says she first saw serving food as a marketing tool. 'There's not much brand recognition in Hong Kong for some of our products, so customers need to see them in a sandwich or taste them in a dessert to truly appreciate them.'

Il Bel Paese also uses its menus as a way to showcase retail offerings, and Sfriso says 80 per cent of the ingredients in its dishes can be bought at the store. 'We don't have a full menu, as restaurants do, so it's important for the dishes we serve to show customers how to use something they don't already know so we can open their eyes. For example, we don't just put a piece of Toscana prosciutto on a cracker - we make a ham mousse and layer it with ricotta and asparagus mousse to make a 'savoury cake',' Santovito says.

A properly devised menu can intrigue customers as well as minimise wastage, says Leung. 'If I see that a product is about to expire or isn't selling well, I can use it in the daily specials and give it that extra promotional push.'

Despite the complications of the business model, hybrid shops have a devout following. 'These types of stores are neighbourhood shops. The nature of it is to cater to customers that come every day,' says Sfriso. More than 90 per cent of Il Bel Paese's customers are regulars.

'It's a similar concept in Europe where you know the neighbourhood grocer and restaurant owner and incorporate them into your lifestyle,' says Pong.

Customers can enjoy exclusive products thanks to the shop owners' close relationships with boutique producers. 'We are the only ones in Hong Kong to offer Harney & Sons' teas, and they supply us because I have known the family as far back as high school,' says Pong.

Classified also carries cheese from Jean D'Alos, one of only 12 maitre d'affineurs [master cheese agers] in Bordeaux. 'We can't carry [such a wide range of] products as ParknShop or City'super, so we've got to offer something special.'

At NaturoPlus, that 'something special' is Shangri-La yak milk cheese, available thanks to Leung's personal affiliations with the co-operative that produces it in Yunnan province.

The shops are also taking the opportunity to educate their customers. 'Hobby cooking is more popular than ever, and now Hongkongers are cooking other cuisines, not just Chinese food, at home,' says Pong.

In its 18 months of operation, Classified has hosted many wine events and invited four cheese experts from abroad, and Pong hopes his chef, David Tamlyn, will find time to offer cooking classes.

'The kitchen is almost like an activity centre for tastings and events,' says Leung, who organises dinners every two months. 'It also gives us a platform to establish a dialogue with our customers.'

Spuntini provides recipe cards showing how to use its products at home, and Sfriso talks of publishing a book of Il Bel Paese recipes.

Sfriso says: 'In the beginning, we had customers who didn't even know how to boil pasta. Now they bring in tiramisu that they've made from scratch and ask me to try some before stocking up on mortadella, pannetone and vino santo.'

'We really are a one-stop shop,' says Leung. 'We've even had guests come into our store, buy some of our products off the shelves and cook their own dinner here using our kitchen.'

'That's Hong Kong for you,' says Pong. 'People aren't content with just a regular restaurant or grocery store anymore. They want a restaurant, grocer, charcuterie, cheese shop, gourmet food store, deli, wine shop, private party space and learning centre - all in one.'