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The third generation of a time-honoured local brand of concentrated flavoured syrups tries to breathe new life into the family business and bring distinctive tastes from Macau to across the border.

When talking about souvenirs from Macau, most people probably think of almond cakes and beef jerky, as well as the crowded scenes (before the Covid-19 pandemic) at the food souvenir shops in the streets and alleys in the vicinity of Ruins of St. Paul’s on the peninsula or Rua do Cunha in Taipa. But these only existed in the recent decades.

Between the 1960’s and 1970’s, travellers shopped near the Inner Harbour area, where they bought cigarettes, wines, seafood, essential oils in traditional Chinese medicine, and concentrated syrups of various flavours for families and friends in Mainland China. It is an anecdote told by Chan Weng Si, the third generation that runs and manages Kam Loi, a time-honoured family brand of nearly 70 years responsible for manufacturing distinctive concentrated syrups.

Besides a cup of coffee or milk tea, people here are accustomed to enjoying drinks of watercress, chrysanthemum or fig syrup — which can be served hot or cold — in cha chaan teng, the local style of cafes. As their names suggest, the recipe of these drinks is rather simple: concentrated flavoured syrups and water in the proportion of about 1 to 6. That’s how the grandparents-in-law of Ms. Chan started the business in 1954 — a small street-side tea stall that caters a variety of snacks and beverages, including the concentrated flavoured syrup drinks.

Two decades later, when Chan’s father-in-law assisted in the business in the 1970’s, the production of the concentrated syrups was standardised in batches, which did not only satiate the needs of their eateries but also other local cafes and restaurants. “Before the handover [in 1999] we produced the concentrated flavoured syrups in our own shop, but given the stricter government requirements for manufacturing food products after the handover, we have purchased an industrial unit in Ilha Verde and made the products there since then,” Ms. Chan explains. “Our products could be found in supermarkets and grocery stores, while some local time-honoured and well-known restaurants and cafes also use our products to make syrup drinks.”

Branding

A bottle of concentrated flavoured syrup is only priced at MOP12 (US$1.5), which offers a small profit margin. That, as well as sales of less than 12,000 bottles a month, caused Ms. Chan’s family to give up the business for three months in late 2016, until Ms. Chan restarted the operation again in 2017. “As I wanted to start up my own business at that time, I thought why didn’t I get involved in this family business,” she says. “They [the second generation of the Kam Loi brand] were worried I would mess up this time-honoured brand, but the brand would have gone anyway [as they did not continue]. So they let me have a shot.”

One of the first few things she did after spearheading Kam Loi was the addition of a new flavour, rose syrup, besides the existing three tastes — watercress, chrysanthemum and fig syrups. The branding of Kam Loi has also been improved at her helm, for instance, its name and logo were registered and trademarked in the city for the first time. “The old generation did not really treat Kam Loi as a brand, so what I have done is better tell the history and story of the brand,” Ms. Chan remarks.

“They [the second generation of Kam Loi] were worried I would mess up this time-honoured brand, but the brand would have gone anyway [as they did not continue]. So they let me have a shot,” says Chan Weng Si from the third generation.

Northbound

To rejuvenate the brand, Ms. Chan looks beyond the local market by participating in a number of trade shows and exhibitions in Mainland China, including the China International Import Expo held in Shanghai. “The products of Kam Loi have also been available for sales in mainland e-commerce platforms like Taobao,” she illustrates.

“We have to adopt a different strategy to explore the mainland market: it’s difficult for our products to be placed on the shelf of the supermarkets in the mainland given the high slotting fees charged by the operators, while the mainland restaurants are also not interested in our products due to a higher cost compared with other beverage choices available across the border,” she continues. “If we want to tap into the mainland market we could just do so by online sale or setting up a physical store.”

Since 2019, Kam Loi has collaborated with a mainland eatery chain to sell products in one of the latter’s outlets in Guangzhou. In partnership with other food and beverage firms across the border, the Macau brand is also preparing to set up four physical stores in Shenzhen, which will entertain mainland consumers with the unique tastes of the city. “These four stores will be operated in the format of tea stalls, where consumers could have a taste of the drinks of watercress syrup and others. Should they be interested they could get more concentrated flavoured syrups online,” Ms. Chan notes. “Our collaboration with the mainland firms is that we will provide training for the staff in the beginning and they will run the stores.”

Asked about details of the expansion plan of Kam Loi in the mainland market, in particular the Guangdong-Hong Kong-Macau Greater Bay Area, she remarks that they would do it step by step should any opportunities arise.

Loss-making

Despite a better branding and setting foot in the mainland market, this family business is still losing money. “We haven’t made any profits for years and that’s why [my father-in-law] wanted to give up the business in the first place. Since I took up the business, we’ve still been losing a five-figure number every month,” Ms. Chan says. But the company has no plan to raise the price of their products significantly to provide a better profit margin. “If there is a price hike, some customers might not choose our concentrated flavoured syrups,” she adds.

Acknowledging the market competition is “fierce”, she points out Kam Loi does not only vie with other local beverage brands in the Macau market. “For food souvenirs like almond cakes there might only be up to 100 brands sharing the pie,” she says. “But when we talk about beverages there are zillions of brands from the city, Hong Kong, Mainland China and around the world.”

This has not deterred her from keeping the operation afloat. “Kam Loi hasn’t made any profits yet because we haven’t made enough investments to better promote and market the products,” she believes. “So I’ve exhausted all efforts to earn money in other businesses in hopes of splurging it on Kam Loi.”

“The old generation did not really treat Kam Loi as a brand… so what I have done is better tell the history and story of the brand,” says Chan Weng Si.

All Hand-made

In addition to the operation of concentrated flavoured syrups, Ms. Chan is also involved in businesses including brand consulting and customs declaration procedures for trading. This June, she and a partner set up an eatery at Travessa dos Anjos in the city’s downtown, catering simple food, coffee, and Kam Loi beverages.

Apart from the syrup drinks, she has come up with a new line of herbal teas under the Kam Loi brand for the new shop — an attempt to test market reception. “I’ve wanted to do this for some time so I take advantage of this opportunity to do so. Both the herbal teas and flavoured syrups are drinks with health benefits and nutrients,” she explains.

All of these are still manufactured in the factory of about 1,000 square feet in Ilha Verde. “The factory has about three to four workers, who make all the products by hand,” she says. “We don’t need to use machines for mass production at the moment, as our sale has yet to justify this approach.”

No loans

In a bid to diversify the economy from gaming, the local government has been committed to rolling out different initiatives to support entrepreneurship, especially youth entrepreneurship, and time-honoured brands in the city like interest-free loans. But Kam Loi has not applied for any government loan schemes nor bank loans, despite the claim of Ms. Chan that they “have no money.”

“I don’t want to have debts,” she explains. “Many people have told me I should get the loans and better use the facilities and measures provided in Macau. However, I just want to run the business within my own capacity.”

“Everyone has different ways of doing business — it’s my personal choice,” she says.

Source: City flavours | Macau Business | Business