Hokkei
Reinvented Asian food to go by Masterchefs Dale Williams and Larkin Cen.
- Location
- Cardiff, United Kingdom
Categories: Food & Beverage Non-Digital B2C
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Investment
sought: - £275,000
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Equity
offered: - 25.00%
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Investment
amount: - £319,580
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Valuation
(pre-money): - £825,000
Idea
Introduction
Two MasterChef finalists became friends with a shared vision for a special kind of takeaway.
With the mission set, the boys set about creating a business and menu that flips the traditional Chinese takeaway on its head. To test their ideas they set up a pop up in the five star Celtic Manor, and were blown away by the feedback, Hokkei was born. Dedication to authentic and delicious flavours, using ethically sourced, high quality ingredients and a service second to none are just three things that make Hokkei awesome.
The business is owned by Dale and Larkin. Larkin grew up in his parents Chinese takeaway, he knows the Chinese food takeaway industry inside out and is a qualified lawyer. Dale is a successful entrepreneur who owns and runs one of the UK's fastest growing recruitment businesses.
Together, they have created a healthy, fresh and revolutionary Asian takeaway which opened its doors in November 2014.
Intended impact
Impacting the market, it is Hokkei's mission to create a new, different, funky, cool, modern Asian fast food takeaway restaurant and to establish this restaurant within a loyal customer demographic through a national chain of Asian food delivery outlets.
By producing cutting edge food combined with reinvented classics, Hokkei intends to become the UK’s number 1 brand and supplier of Asian takeaway food.
A new concept, Hokkei wants to redefine the eating experience traditionally available from a takeaway outlet. From concept to creation, the menu is distinguished and aims to remove the stigma attached to takeaways being unhealthy and predominately boring.
Hokkei is a modernised and reinvented Asian takeaway with the potential of growing into more than one site through business improvement and product innovation. We found that the market is dominated by independent, family owned Chinese takeaways and we believe this is largely down to the ‘skill’ factor required, usually retained by the sites proprietor.
Hokkei aims to remove the need for highly skilled cooks or chefs by removing the technical element and requirement to use potentially dangerous woks at a high heat to produce food. This innovation comes from centralising processes, cooking on mass and using state of the art techniques to enable food to be prepared in a new way, without any compromise on quality or taste. Consistency shall be maintained by centralising the process which would maximise quality control. The food would be produced centrally and each dish would effectively constructed or assembled to order in a fresh clean environment with little skilled cooking required within each Hokkei branch.
In achieving this redeveloped way of preparing, cooking and delivering delicious Asian takeaway food, we believe the business has the potential to become scalable to a number of sites thus creating a brand and in turn a valuable business.
Substantial accomplishments to date
From an original idea early in 2013 Hokkei was tested as a concept in the 5* Celtic Manor resort fully booked for its sellout 4 day pop up.Another successful pop-up followed, and, a BBC TV series was commissioned to follow the story of taking the business from an idea to a trading business, this 4 episode documentary is due to air this April 2015 in a prime time slot on BBC One.
During the following 12 months Hokkei was created and opened its doors to rave reviews during the last week of November, 2014.
From a standing start, the business has turned over +150k in 3 months trading with a limited menu and a soft-launch averaging a product GM of 60%*. Now fully operational, the business is gearing up to propel forward taking into account all of the lessons of the first 3 months trade.
*Source: unaudited management accounts
Monetisation strategy
Short to Medium-Term
It is our objective to ensure the stability, fluidity and scalability of the Hokkei model by perfecting the opening outlet to run a seamless food preparation and delivery operation, developing the model to replicate success in alternate locations within the Cardiff postcode area.
• Create a fluid process of preparation utilising the head office as a development kitchen and a preparation kitchen for sites 1-5.
• Identify the potential sites within Cardiff for Hokkei sites 2-5.
• Generate a robust trading platform to ensure consistent revenues by recruiting a Marketing professional in-house to manage email marketing campaigns alongside offline marketing and promotions.
• Invest in state of the art multi-site software for delivery driver and stock communication.
• Using available data, fine tune the Hokkei menu to roll-out to new Hokkei branches based on what ‘sells’ and listening to customer demand.
Long-Term
It is the long-term objective of the directors of Hokkei to create a nationally established and highly successful business known as the leading takeaway restaurant delivering Asian food.
• To centralise the Hokkei kitchen operations into a separate manufacturing unit capable of servicing in excess of 5 Hokkei units.
• To develop a Hokkei franchising service to interested investors in alternate locations throughout the UK.
• To expand the Hokkei business Geographically creating a profitable, scalable and fast-growing business to attract external sale or investment.
Use of proceeds
Hokkei is trading strongly (turnover of 150k in 3 months) and thus seems to provide potential to offer a scalable, profitable business model.
The traction of the business has already seen the business twitter account soar to 3,000 followers.
In order to capitalise on the imminent impact of a TV series airing, the business needs a cash injection to open a secondary site and benefit from economies of scale.
Part of the investment would be utilised to pay off outstanding costs relating to the development of site one, therefore freeing up the capital and cash reserves to invest in site 2.
Pursuant to this, a Marketing Executive and Finance Administrator have been identified as salaried roles along with a small office lease to house central administrative duties.
In summary the capital would help to stabilise and shape the business for impending growth.
Market
Target market
The Hokkei customer target market is diverse. Indicated by market research and existing customer buying patterns, there is scope to enable Hokkei to have a wide age and profile range within it’s customer base. The customer demographic includes:
• Students
- The everyday student in need of tasty, vibrant and ultimately ‘cool’ fast food. Playing on the PR element and the perceived pop-culture students would be an everyday lifeblood for the Hokkei lunchtime and evening trade.
• Families
- An existing market, the family Friday or Saturday night takeaway is a British staple. The cost effective ordering offering of Hokkei is designed to enable families to enjoy the products and concept without paying over the odds.
• Young Professionals
- A growing market in a world of increasingly fast-paced living, the young professional seems an on-trend market which has an increasing demand for a fresh and clean alternative and better tasting product to the traditionally available takeaway.
• Single people
- An individual eating experience, the Hokkei ‘box’ is designed specifically for the single user eating experience. A collection of favourites packaged intelligently into a single box, it is designed to allow the individual to receive a combination of flavours at a fraction of the cost of ordering a Chinese takeaway in the traditional way.
• Couples
- One large markets for the takeaway sector, couples are consistently a repeat customer when looking to order a meal for 2 at home when time is of the essence and an easier option to cooking Is the order of the day.
The Hokkei target market is intently mass as opposed to niche, Hokkei features the brand, product and service to supply a diverse mass market as opposed to a niche model.
Characteristics of target market
The average Britton spends £9.00 per takeaway meal, on average. In addition the average takeaway purchases per month across the UK equate to 12 separate orders per month. The UK’s most popular takeaway of choice is the Chinese Takeaway, recently taking over the British classic of fish and chips. The biggest fast-food consumers are 25-34 year olds. One of the primary reasons for a customer opting for a takeaway is due to the lack of time, and/or, inclination to cook at home.
In addition recent research suggests that students are stretching their tight budgets by spending an average of £100 per month on their favourite fast foods.
Nations favorite takeaways:
1. Chinese 25%
2. Indian 23%
3. Fish & Chips 22%
Marketing strategy
The Hokkei Marketing strategy is robust in its delivery and significantly enhanced with minimal financial investment due to several circumstances.
MasterChef PR
Following the MasterChef 2013 series, Larkin and Dale have carved out a reputation as two of the finest Chefs in the UK. Following the success of the program, Masterchef ‘The Finalists cookbook was launched in October. In addition, Larkin and Dale are regular attendees of the BBC Good Food Show exhibitions where they complete cookery demonstrations to audiences. Larkin and Dale continue to be sought after for their culinary expertise with recent events including Newport Food Festival, The Royal Welsh Show, Swansea Market promotions and Bristol food shows. Continuing PR opportunities present themselves with a recent collaboration with well-known brand Clarks Maple Syrup.
BBC Television Series
A huge benefit to the launch of Hokkei and arguably a priceless addition to the marketing mix, Hokkei will be publicised via a 4 part TV documentary which is currently being filmed by the BBC. The 4 part series follows Dale and Larkin on their mission to open their first Hokkei branch. Episodes include coverage of the Celtic Manor Hokkei pop-up, a food experience trip to Hong Kong and several hours of business planning following the highs and lows of establishing a business.
Online Presence
The Hokkei website is a fully responsive website for brochure purposes (menu viewing) and functional purposes (online ordering).
Email and Txt Marketing
Through data capture feeds Hokkei aims to maximise opt-in Email Marketing campaigns to drive click-through to the online ordering platform.
Print Distribution
Supplying an intriguing printed menu on a postcode delivery basis, Hokkei would reach a wide new customer audience.
Social Presence
With an existing social combined following of 15,000, Larkin and Dale have a wide audience available at the click of a free social media tool in Twitter.
Competition strategy
Hokkei considers its market position to be unique. Considering the history of the sector and indeed current competition available, Hokkei would be chartering new territory in its offering.
However, despite Hokkei being different, the competition available to the business and therefore our factors for consideration when entering the market are still of a large enough consideration that a detailed view of their strengths and weaknesses has to be accounted for.
The competition that Hokkei has to consider is two-fold, both direct and in-direct. Our direct competition comes in the form of existing businesses that cook and supply Asian food specifically available for customer delivery or takeaway. While indirect competition comes in the form of takeaway businesses offering an alternative cuisine, perhaps an Indian takeaway or a fish and chip shop. Our direct competition is of larger consideration as the customer will have a choice of similar food experiences, this is therefore a market where we need to consider differentiation. With the indirect competition, this often comes down to customer ‘feeling’ as a purchase is based upon the food they desire at a specific time. Whereas this is more difficult to effectively negate, it can be something that strong marketing could have an impact upon.
We believe that Hokkei will succeed against competition due to a unique offering, a healthy product, responsibly sourced ingredients and centralised production facilities ensuring product consistency across sites.
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