Many may know about Flash Coffee but few are aware that it’s a Singapore headquartered company.
Isn’t it a HK coffee chain? Or a US (think DC Comics superhero) one?
Surprise, surprise, Flash Coffee is actually a #supportlocal brand that has a regional presence across seven markets, such as Indonesia, Taiwan, and South Korea.
Launched in 2020, it has since opened close to 250 stores and employs an army of 1,400 employees. In Singapore alone, it hires 250 staff across its head office and its 31 stores.
Singapore-based Flash Coffee may be giving renowned US coffee chains Starbucks and The Coffee Bean a run for their money.
How did it get to where it is in such a short time? Think serial entrepreneur who seems to be getting it right very often – 31-year-old David Brunier.
In fact, this entrepreneur may just have achieved an almost perfect scorecard for Flash Coffee thus far. In just two years of operations, the majority of Flash Coffee’s stores have achieved profitability, shared David in an interview with Vulcan Post.
“We are not able to disclose any figures, though we’re pleased to share that company-wide, the majority of our stores have achieved profitability. We are well-capitalised and will continue to focus on growing and expanding our operations across Asia this year.”David Brunier, CEO and founder of Flash Coffee
It starts with a Flash
David is known in the food and beverage (F&B) scene, having founded and sold his first startup Wine Genius when he was still in university.
The entrepreneur then went on to start food delivery company foodora with the team at Rocket Internet. He served as Chief Executive Officer (CEO) and Chief Marketing Officer (CMO) at foodora in various European markets before it was acquired by Delivery Hero in 2015.
He moved to Singapore subsequently, after working at Delivery Hero for a few years to take on the role as foodpanda’s Asia Pacific’s (APAC) CMO. It was then that he was approached by Rocket Internet CEO Oliver Samwer to explore building a new start-up together. Being a coffee lover and foodie, he jumped at the opportunity to create his own concept with co-founder Sebastian Hannecker.
“(We wanted to) create an accessible brand that people would love. I saw a massive opportunity in the coffee industry, as it’s completely offline-dominated and long overdue to be digitised. We were raring to go, excited to take on the challenge of making specialty coffee accessible to the Asian mass market. And as they say, the rest is history,” said David.
David tapped on his experience at foodpanda and understood the importance of creating brand stickiness that stays with customers from day one.
“This is why from the very beginning, our goal was to find a unique colour with a positive connotation that we could stake our claim on for Flash Coffee across the region. We wanted a shade that is striking, dynamic, and memorable. Our unique pantone shades of energetic yellow complemented with bold pink were the answer.”
On how the team was able to scale up to hundreds of stores in a short span of two years, David said that since day one, the team has invested time and effort in making sure that it got the formula right – the right in-house talent to lead and execute projects and store openings as well as creating clear, streamlined processes that understand things on the ground.
“With all of this legwork and guidelines in place, we are effectively hyper-scalable, where we can have a grab-and-go store live in as fast as a month.”
Flash Coffee was first launched in Jakarta, but it chose Singapore as the headquarters following its Series A funding. Jakarta is now its regional technological hub, with close to 80 tech and engineer staff based there.
“Singapore has great access to global, regional, and local talent. It’s a renowned multi-cultural, tech-forward city that has strong government support, and a solid ecosystem for businesses to operate. It’s also proven to be a receptive and advanced consumer test market for businesses, which we’re grateful for,” David explained.
In October 2020, Flash Coffee launched its first store in Singapore at Oxley Tower. Over the years it has opened outlets at locations such as JEM, Katong, Tampines 1, and SPACE @ Kovan.
Singapore is viewed as a priority market for Flash Coffee, and the facts reveal that locals love their coffee. With the proportion of professionals, managers, executives, and technicians (PMETs) at almost 60 per cent of the total workforce, many professionals would be taken to Flash Coffee’s price point, tech convenience, and stylish branding.
David said that Singapore has massive potential and space for affordable quality coffee. “That’s due to the great combination of population size, population density, higher-than-average coffee consumption per capita, rapidly rising average income, and a larger percentage of residents within our target group, namely young and tech-savvy office workers.”
US$15 million Series A funding to expand into new markets
In April last year, Flash Coffee announced that it raised US$15 million in Series A funding in a round led by White Star Capital, with participation from prominent investors including Delivery Hero-backed DX Ventures, Global Founders Capital, and Conny & Co.
The Series A round sets the total capital raised by Flash Coffee to US$20 million. The new funding will be used to expand the brand in 10 markets across APAC.
Since the Series A fund-raise in April 2021, Flash Coffee has more than quadrupled its store presence from 50 to over 200 outlets. It also launched in four new markets last year – Hong Kong, Taiwan, South Korea, and Japan, while it built on its presence in present markets Singapore, Indonesia, and Thailand.
“Our Series A funding certainly helped to propel our growth across the region, and of course – the secret sauce to our accelerated expansion really lies in having a strong team across our management and various departments, who remain committed to our mission, and have the talent and tenacity to grow our brand and presence in short time scales,” David said.
The funding also went towards growing its leadership team, and hiring head office and barista personnel.
“We also invested in building out our tech-enabled features and product capabilities. For example, we’ve recently integrated delivery into our own app ecosystem in Singapore and Taiwan, and will be rolling out this feature very soon to other markets.”
Localised delights key selling point to business traction
Despite the cutthroat, competitive coffee markets, Flash Coffee now has 17 stores in Taiwan, nine stores in Hong Kong, and six stores in South Korea.
“It’s an incredible feat for our local teams to scale our store presence in the span of these few months. We’re also reaping the rewards of our hyper-localised approach. In each of these markets, we’ve brought on an experienced world or local barista champion to curate, taste-test, select our beans and build our menus from scratch.”
Localising the menus works like magic, and relates to locals well. “We’re always hyper localising against local consumer preferences and tastes. An example would be the best-selling Flash Yuen Yeung in Hong Kong, and the fan-favourite Mitarashi Latte in Japan that is inspired by the sweet, traditional Japanese snack.”
So what are Singaporeans’ favourite drinks? “Our best seller in Singapore is – and this might not come as a surprise – a comforting, classic cup of Latte. What might be unexpected though, is that our refreshing Lychee Espresso Soda and Melaka Lattes are actually pretty close contenders for second place.”
The coffee and food may be the main stars, but the F&B startup does not forget its tech, which is a key contributor in building the business. “We see ourselves as a tech company at its core as compared to other traditional players.”
The Flash Coffee app was launched around early last year with the aim to digitise today’s offline-dominated coffee industry. Features include a streamlined pick-up feature, loyalty programme, personalised promotions, and interactive challenges.
Last year, the startup launched a promotion to capture market share in Singapore, offering 50 per cent off the first five drinks if customers ordered at its new outlets.
“Our app allows Flash Coffee fans to order ahead of time, pick up at their convenience, and skip queues. At the same time, customers can still earn Flash points and participate in our gamification feature – ‘Challenges’ – when they order for delivery through our app.”
“The more functionality we build into our ecosystem, the more insights we have on our user journey – and this allows us to be customer-obsessed, as we constantly think about how to better the overall Flash Coffee experience.”
David claims that the startup is one of the few F&B companies out there indexing heavily on its position as a tech company. “The sky’s the limit for how much more we can continue to innovate on the customer experience.”
Keeping coffee prices affordable; in-app deliveries’ rise in popularity
The majority of Flash Coffee’s orders come from digital channels, and most of its customers are middle-class millennials and young professionals around 18-35 years of age, shared David.
“Given their busy lifestyles, they are also more tech-savvy than the target groups of incumbent brands. We have seen a strong upward trend in online orders, where this segment has really taken to pre-ordering and opting for delivery via our own app.”
Not only does the technology appeal to its customers, it provides cost efficiencies, which allows the coffee prices to remain at affordable prices. An Americano cost S$2.80, while a Latte is S$3.80. Non-caffeinated drinks like an Ice Tea costs S$1.50, and a cup of Milk Tea is priced at S$2.50.
“The cost efficiencies gained by our digitised and optimised business model are directly passed on to our consumers, which allows us to serve high-quality specialty coffee at affordable prices. For example, our optimised real estate strategy with a focus on grab-and-go concepts that allow us to save on rent and reduce store investment needs,” David shared.
“We also tap on tech to improve staffing logic and have more accurate inventory forecasts based on our back-end tech-enabled operations, specifically insights, data, and trends on consumer preferences and habits that we can analyse from our Flash Coffee app and our barista app.”
Since Flash Coffee integrated delivery into its app in January this year, it has been overwhelmed by the demand, David said.
“We’re certainly spurred on to launch in-app delivery across other markets as soon as possible, targeting for the first half of 2022, after witnessing the very positive response for our in-app delivery offering that has been powered by foodpanda’s pandago in both Singapore and Taiwan.”
Future plans amid a pandemic new normal
According to David, Flash Coffee has enjoyed strong traction since its launch in January 2020, and this demonstrates that its business model fits a pandemic-driven world where the way people consume coffee has changed drastically.
“The pandemic has altered consumer habits and their expectations globally. Whether it’s food, groceries, coffee, or other commodities – consumers have come to realise that whatever they need, can be delivered to their homes in ~30 mins – convenience is now a way of life.”
“We still see a mix between Work From Home and Work From Office, and delivery allows us to be accessible to all our consumers. This emphasises the importance of technology integration to respond to the post-pandemic lifestyle, where our Flash Coffee consumer app is core to our strategic offering.”
Flash Coffee is also focusing strongly on accessibility and ensuring that it’s able to reach out to customers wherever they are.
“We do this by building new stores and collaborating with partners like SaladStop! to leverage on their real estate to further extend our presence. We believe that the businesses which adapt and react to consumer behaviour changes will be successful during and after Covid-19.”
It seems Flash Coffee might still want to retain some human touch in its tech business, as it isn’t considering trending robot baristas to brew coffee, at least for now. “We’re strong believers of using automation to make our operations more effective and efficient, but right now, our baristas are at the heart of our business. Our barista team is able to deliver the human touch, and we really value the personal connection and real relationships our baristas foster with our returning customers.”
The team is, however, researching and developing fully automated stock counts and purchase orders via sensor technology, and will unveil this feature in-stores when it’s ready.
Going forward, David said that Flash Coffee will work on keeping prices affordable while producing quality products. It will also continue its expansion plans and work on tech developments to enhance the customer experience. There’s also a limited-edition collaboration with an up-and-coming Asian streetwear brand to be unveiled soon.
Customers can also look forward to more unique beverages that appeal to local taste buds.
“With evolving consumer preferences, we look to continually improve and come up with new creative beverage options and expand our high-quality specialty coffee range to suit different tastes.”
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Featured Image Credit: Flash Coffee