Profile | ‘The dynamics have changed’: Hong Kong chef and restaurant group CEO on his big bet on the city during a ‘challenging’ period for its dining scene
- Hong Kong restaurant group Cafe Deco Group’s CEO Angelo McDonnell started as a chef and climbed the ladder after delving into the business side of the industry
- He talks about expanding despite fewer tourists and expats in the city, why the days of being just a chef are ‘long gone’ and his redefined vision for the group
Stealthily, Cafe Deco Group may have pulled off one of 2023’s biggest food industry acquisitions. Around May last year, it bought baker Gérard DuBois’ entire La Rose Noire operation in Hong Kong, including all of its Passion and Sour Dough cafes, as well as its local production factory.
It is a power move, setting up Cafe Deco Group to be bigger than ever in the dining market. While others consolidated, closed ventures and sold off during the Covid-19 pandemic, the group actually grew and expanded, with a portfolio now totalling 37 outlets, including the newly acquired patisseries and five new eateries in the newly launched Airside mall, in Kai Tak.
Comparatively, Castelo Concepts – which at its peak boasted 95 eateries between Hong Kong and Vietnam, including brands such as Jaspas and Wagyu – went into liquidation in July 2023, and its remaining handful of restaurants closed.
Behind Cafe Deco Group’s expansion is chef-turned-CEO Angelo McDonnell.
“Gérard has built an amazing business,” says McDonnell. “I think he was hoping for internal succession, possibly his son to take over, but in the end, he decided to pursue his own goals.”
Dubois will refocus his efforts on his business of exporting confectionery in the Philippines, leaving his Hong Kong legacy in the hands of Cafe Deco Group.
“It was a good match since we didn’t have bakery expertise, so I’m honoured he entrusts us to continue to grow the business here,” says McDonnell.
It didn’t hurt that both Dubois and McDonnell started in kitchens rather than boardrooms. The latter arrived in Hong Kong in 1994, the same year Martin Allies and Graeme Reading opened Cafe Deco on The Peak.
The scene is really going through a transition. There are fewer expats, fewer tourists, the spending power is not there
“Hotels can be stifling and political, so after seven years I left to become Igor’s Group’s executive chef,” recalls McDonnell.
“The first restaurant I opened with them was Wildfire in Stanley. I always had an interest to understand more about the business, and venture into that side of it. I learned a lot from its founder, Chris Lenz, who has an amazing entrepreneurial mind.”
McDonnell was there in 2006, when Igor’s Group was bought by Chevalier iTech Holdings, an engineering conglomerate that had entered the hospitality business a year earlier, when it bought Pacific Coffee.
McDonnell managed operations for the group, becoming more involved in the bigger decisions.
“Sometimes chefs have a bad image, like we’re just chefs and not business guys. Everybody envisions you just in the kitchen, but those days are long gone. I always ended up front of house, too,” says McDonnell, who was named CEO in July 2023.
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“Over the years, it has all integrated. The operations guys get more involved in the food side and the chefs get to know more about operations and guest contact. I’m still a chef at heart but, you know, the dynamics have changed. Chefs have to be more businesspeople and know about costing, set-up and labour.”
“We’re contemplating changing [the group name],” admits McDonnell. “Respectfully, Cafe Deco was an iconic restaurant. They set a high standard for what service and food should be. I know The Peak venue is still embedded in many people’s minds, but I think it probably had its time.
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“There are a lot more places with harbour views now, more competition. I just don’t see us trying to replicate a flagship like that.”
The future of Cafe Deco Group seems concentrated more on mass concepts and franchises with a more pan-Asian culinary focus. McDonnell sees this as the most viable path forward and is aggressively moving in this direction.
“During Covid we did expand pretty fast, opening 10 or 12 outlets in two years or so. We opened a lot of what I call ‘chopstick’ restaurants at a very good price point, with good quality. Most performed really well, one or two failed. And we learned from that,” he explains.
“The scene is really going through a transition. There are fewer expats, fewer tourists, the spending power is not there, with no more expense accounts for the big offices and bankers. Margins are getting tighter. So we really need to refocus.
“We brought in some franchise brands from Taiwan and Japan, learning and trying to get the model right to make it more easily expandable. Hong Kong diners are spoiled. There’s a huge range of restaurants from HK$100 to HK$1,000.
“People also get bored easily. When a new restaurant is busy for the first six months, it means nothing. It’s just a honeymoon. After that, if you’re still busy then you can pat yourself on the back.”
There are still some long-term favourites such as Berliner, Stormies and Dim Sum Bar, but newer options like Anju Restaurant & Bar (a contemporary Korean hang-out), Ozakaya (an accessible Osaka-style snack and drinks den), Nana’s Green Tea (a popular Japanese matcha cafe), and Pho.dle.bar (trendy Vietnamese noodles) represent the redefined vision.
Also under the group’s umbrella is Food Square, a food supply firm with retail spin-offs Chef’s Cuts (a gourmet grocer in Central Market) and Chef’s Market (in Airside). Concentrating in new suburban malls makes managing operations easier, too.
At The Southside, a new shopping centre in Wong Chuk Hang, Cafe Deco Group will have four more outlets.
“It’s not the best time right now for business but when business is down sometimes that’s where the good opportunities are,” says McDonnell. “It’s how you adapt quickly and make changes. I think we’re pretty good at that.
“It’s probably one of the most challenging periods for the dining sector in Hong Kong. People’s habits have changed immensely. Instead of an influx of tourists, now you actually have an outflux every weekend going over the border.”
Despite the difficulties, McDonnell is optimistic – which explains Cafe Deco Group’s big bet to grow now. He has been through other upheavals including financial crises and the Sars and Covid outbreaks, and moved with the times.
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“Between Igor’s and Cafe Deco, I have been involved in the opening of about 100 restaurants,” he reminisces.
“I’ve been fortunate to work in eight countries, but I would say I became a real chef here. It probably made me a better person, too, but it definitely opened my mind to different cuisines.
“Hong Kong, with its buzz and fast pace, was the perfect city for me and I’ve learned so much. What I think is you have to look long term. I’m very optimistic that the city is still going to bounce back.”
