When Dr Martin Bem first arrived in Singapore in 1999, many people asked him why an Austrian who holds a PhD in Economics and Masters degree in Marketing would want to work in F&B. “Shouldn’t you be in hedge funds or private equity?” they asked. “You’ll make more money.”
The pragmatic, dollars-and-sense part of Dr Bem knew they were right. But the passionate, creative side of him desperately wanted them to be wrong. So he did extensive risk calculations and conceived his first German casual dining restaurant called Brotzeit at VivoCity a few years later. Brotzeit’s roaring success led to two more outlets in Singapore, as well as eight more franchised restaurants in the region.
Dr Bem then conceptualised and founded LeVeL33, the world’s highest urban microbrewery serving craft beers and rare wines on the 33rd floor of Marina Bay Financial Centre Tower 1. Add casual bar Erwin’s Gastrobar, online cake shop Perfect Bakes and low-carb bakery shop LOCABA, and you could say Dr Bem has created a mini F&B empire for himself under his holding company Ponte Group in under two decades. The turnover for Ponte in 2019 was almost S$20 million.
It turned out that Dr Bem is one of those lucky people who exists in that sweet spot between fiery passion and cool pragmatism. While he thrives on the sight of people enjoying a good meal in his restaurants, he’s also the first to make hard-headed decisions about profits, operations and staff management.
His favourite thinkers, after all, include Adam Smith and John Maynard Keynes, and bedtime reading frequently involves bestselling books on business and marketing.
Covid-19 is ruining businesses. How are you coping?
Business for us is down by about 45 percent. Being in the CBD, we’re hard-hit because people are working from home, and all the big conventions and exhibitions have been cancelled. So what we’re doing now is working on the business itself, that is, focusing on certain projects which we normally don’t have time for. That includes reviewing our recruitment and onboarding system, and exploring technologies to create interactive elements in our restaurants. We’re using this downtime to improve ourselves so we’ll be in better shape when business comes back.
You’re different from most restaurateurs in that you have a deeply academic background in economics and marketing. How have those disciplines helped you?
People used to ask me why a person with a PhD in economics would start a German restaurant or a microbrewery. They thought I should be in finance. But after the collapse of Lehman Brothers, those sorts of questions went away. Running restaurants and a microbrewery no longer seemed like a bad idea… To answer your question, I think that my academic background helps in making me look at everything analytically. Some young restaurateurs tend to regard the F&B business as a creative hobby. They discover later that there are many aspects of the business they haven’t thought about. In terms of marketing, I make sure that everything about the restaurant – from the menu and music, to furniture and toilets – speak the same language and have the same positioning. If there is just one thing that clashes with the rest, that would ruin the guest’s experience. Quite a number of restaurateurs, I think, focus too much on the food or the ambience and neglect the other things. For me, I would take dishes off the menu if the numbers don’t tally, even if I absolutely love the dish. We’re here to provide services for our guests – not for ourselves. What the guest wants is most important.
Do your analytical methods leave sufficient room for risk and experimentation?
It does, in some sense. I took the big risk of bringing a microbrewery up to the 33rd floor of the MBFC. Most microbreweries are generally seen as casual, laidback spots with a live band and TV screens. But we wanted to do an upmarket version with great design, very good wines and high-end furnishings. So it was difficult convincing the landlord to give us the space to start LeVel 33 because the concept had never been done. And even when we won that pitch – which was very competitive – I had no idea how to bring the brewery up; the components were just too big for the service lift. Eventually we had to build a mobile crane at the space where the bar now stands now, and lift the pieces from the sidewalk up 156 metres to the 33rd floor…
Yes, our beers are a big draw. But we also serve Mouton Rothschild premier vintages, and exclusives wines from the Barossa Valley that no one else in Singapore has. We want high-quality, but we don’t want to be too far ahead of the curve. Familiarity isn’t a bad thing – especially in a tough economy like this one. People might say yes to the tempranillo from Spain or shiraz from Barossa Valley. They won’t mind spending S$180 or S$200 because they know what to expect. But they might be reluctant about getting that fantastic pinot noir from Slovenia, because in times like this, they’re afraid to experiment.
When we clear Covid-19 and the economy picks up, what challenges will you be tackling next?
It’s obviously an interesting time. The whole retail industry is undergoing traumatic changes because so much of it is going online. As a result, landlords are turning to F&B to help fill their empty shop spaces. So I’m getting calls from mall operators and real estate developers about possibly opening a restaurant at their venues. It’s funny because four or five years ago, this would never have happened. I would have to call them and wait for an appointment.
So I expect that in future, there will be more players in the F&B industry and more competition. Our manpower shortages will become more acute because, for the premium services we provide, we need people to create good healthy food and not machines that serve mass-market pre-cooked food. Meanwhile, mall operators want to charge higher rents, but who can pay them under these conditions? Surely not F&B establishments where overhead costs are so high.
Leases are also shorter here compared to what they are in, say, the US. Here it’s 3 plus 3. (In the US, it’s mostly 5 plus 5.) What that means is that you have to set up your restaurant, make it popular, make your money back, and make a profit within three years. And that’s a huge challenge. You don’t have much time to readjust the concept and positioning. You have to get the concept right from Day One… Incidentally, I became an F&B entrepreneur right about the time that SARS struck in 2003. That was tough for me, but I do think that things were much worse then. The government was less prepared, businesses were in shock, and people were more scared.
Despite that, you’ve experienced success with Brotzeit and LeVeL 33. Your own restaurants aside, where have you had your best meals?
When I look back, it’s surprising how few dinners I remember from, say, 10 or 20 years ago. But in 2000, Tetsuya Wakuda was in Singapore for the World Gourmet Summit. And I had the pleasure of eating his signature dish, the herb-crusted ocean trout, at Les Amis. It was amazing. I’ll never forget that experience.
This article was originally published in The Business Times.