You’ve probably seen their kopitiams around or their instant premix coffee being sold in malls. But did you know that the story behind OldTown White Coffee involves the town of Ipoh and RM1.47 billion?
Here’s the lesser-known story of OldTown White Coffee.
Wanting to provide quality coffee to households and the food service industry, Goh Ching Mun and Tan Say Yap recruited Lee Siew Heng, who was then working at a garment manufacturing and trading company.
It might seem weird to bring in someone who isn’t from a coffee business background, but there was enough experience between Goh and Tan.
For context, Goh’s family is behind the famous Nam Heong Coffee Shop in Ipoh, while Tan had been in the coffee manufacturing industry for about 20 years at the time.
Together, the three of them built a local empire selling Hainanese coffee.
Wait, what do you mean Hainanese?
Malaysia today is a melting pot of cultures due to immigrants who came to the country decades ago.
This includes the people from the province of Hainan in China who landed in Ipoh to work in the local tin mines.
These settlers were unhappy with the Western-style coffee brought to Malaya by the Brits. So they gradually adapted it to suit the palate of the Chinese population in Ipoh.
This was the birth of the famous Ipoh white coffee.
Ipoh white coffee uses beans that are lightly roasted in margarine before they’re ground up and brewed. This makes the drink milder, with light caramel tones. Condensed milk is typically added to enrich the flavour.
Despite the name, Ipoh white coffee is not actually white. It simply stems from the literal translation of its Chinese name, and refers to the milk used in the coffee.
Now back to the story
Goh, who had worked at his family’s business since age 12, took his grandfather’s original recipe and got to work. With the team’s combined years of experience, it didn’t take them long to create their own blend of instant coffee.
And so, in 1999, they began manufacturing the brand’s first 3-in-1 instant coffee packs.
Their signature white coffee recipe uses a three-bean blend—Arabica beans for the sweet and nutty notes, Robusta beans for their deep and roasted taste, and Liberica beans for a lingering finish.
The founders then commercialised the coffee mix under the “OldTown” brand for retailing. Naturally, the brand was well-received by locals and slowly made its mark across the country and even beyond.
Just a year after they began manufacturing, they were already exporting their product.
More flavours soon followed to keep up with the brand’s popularity and demands. In 2001, the business expanded to Hong Kong, and later successfully retailed throughout Malaysia via major supermarkets.
Goh and Tan even came up with a new 3-in-1 mix, but for instant milk tea this time.
Then a restaurant chain came about
The popularity of the OldTown White Coffee brand was a dream come true for the trio. So when they came across the opportunity to open a kopitiam selling the brand’s products, they went all in.
In 2005, the first OldTown White Coffee restaurant debuted in its hometown (Ipoh). The company was later listed on Bursa Malaysia in 2011 according to a source.
It was in 2013 that the brand achieved its 200th store milestone through franchising.
Speaking to the Borneo Post at the time, Lee said, “The brand OldTown White Coffee has been around for almost 14 years now. Back then, it was tough to convince the licensees to convert into franchise operators but we took a conscious decision of setting up a franchising business.”
“This conviction in the business model has resulted in the company today achieving a significant milestone of 200 stores in Malaysia, and a total of 224 stores across four countries in the Asian region.”
This ethos is what helped propel the company forward and expand to other countries, including the UK, the US, Indonesia, Thailand, and the Philippines.
In fact, the brand became so accomplished that in 2017, they received a cash offer.
What for, you may ask? To buy all the issued ordinary shares at RM3.18 per share. This would come up to a total price of approximately RM1.47 billion.
According to Sparrow Publishing House, it was Dutch-owned Jacobs Douwe Egberts Holdings Asia NL B.V. (JDE) that made the enticing proposal. The publishing house even deemed it “one of the most amazing exits” for shareholders of a Malaysian franchise.
The acquisition by JDE also meant the OldTown White Coffee brand was delisted from Bursa Malaysia and subsequently privatised.
The start of a new era
Since having a new captain steering the ship, OldTown White Coffee has introduced more flavours to its range. This includes salted caramel white coffee and less sugar white coffee.
As for its cafes, the brand has announced plans to open up 50 more outlets in 2023. Their target area is mainly the northern and eastern regions of Malaysia.
During the launch ceremony of an outlet at IOI City Mall outlet earlier this year, its current CEO, Dawn Liew, said, “We want to give people choices beyond just normal Western fast food. They should be given a choice of Asian-style products they can rely on.”
She also mentioned the brand’s intention to work with the Ministry of Health on a pilot project to share nutritional information on its menus.
“This initiative is expected to help the community in getting healthy food at a reasonable price while also reducing their cost of living,” she explained.
In line with that, the kopitiam outlets launched plant-based meals for those who prefer “a healthier alternative”.
They also joined the national Menu Rahmah campaign by introducing set meals (a nasi lemak meal and a lime juice drink) at the price of RM4.50 to RM5. Customers are able to switch out the drink for their household coffees by adding on RM2.
With so much going on for the brand, it’s interesting to see what they’ll be doing next to promote our local cuisine, as well as Ipoh’s white coffee.
- Learn more about OldTown White Coffee here.
- Read other articles we’ve written about Malaysian startups here.
Featured Image Credit: OldTown White Coffee