Taking a Bite out of Hong Kong’s F&B Industry

Katrina Kerr, Co-founder of Belgian beerhouse brand FRITES, shares her story.

Opening a restaurant has long been a popular startup idea for young entrepreneurs, because food – and in today’s world, particularly Instagrammable food – seems like something that will always sell. However, it is not as easy as it sounds, especially when the market is this saturated.

Hong Kong is well-known for its diversity when it comes to food. Hailed as Asia’s ‘food paradise,’ one can find all kinds of cuisines in this eclectic city, ranging from traditional Chinese dim sum to creative Peruvian-Japanese fusion food.

The Food and Beverages (F&B) industry in Hong Kong has become vivid and fast-changing in order to cater to the appetites of local food enthusiasts. Every year, new restaurants, cafes, and bars with wildly creative concepts emerge in the market, trying to fight for a place in the competitive food empire.

The story of Katrina Kerr, the Founder of FRITES, is a vivid example of how to start from scratch and build a restaurant business in this competitive market.

Katrina Kerr and FRITES

Kerr co-founded FRITES with her business partner Viviano Romito in 2007. The Belgium-styled beer house has opened seven locations across Hong Kong Island and Kowloon and is still expanding. With its wide range of imported beer, high-quality food, and relaxed atmosphere, this niche brand has won loyalty from both local foodies and high-end diners.

The success of FRITES did not come without hard work. As Kerr explains, every detail of the restaurant, from its menu to its interior decor, is designed to give diners a full European experience. The restaurant’s concept is also novel, as it departs from mainstream European food, adding a different color to local dining catalogs.

“It’s a concept restaurant that is different because of the large sharing meals and the concept of matching beer with food, which is not really what we think of when we think of beer,” says Kerr.

FRITES’ decade-long journey has been littered with obstacles and challenges, especially in the early days when Katrina only had limited experience in this industry.

“It was kind of like raising money and trying just to figure out what to do on a day-to-day basis,” says Kerr, recalling the old days. Her first F&B venture – a Coyote Ugly-style bar named The Groovy Mule – was a rollercoaster experience.

The Groovy Mule

The story of Kerr’s Groovy Mule experience reads like a television drama, with all kinds of twists. When Kerr had just paid the deposit and signed the lease for the restaurant premises in Wan Chai, she found that the investor who had promised to fund the venture had disappeared.

Facing an imminent breach of contract, Kerr had a back-breaking task ahead of her: rapidly getting new investors on board to keep The Groovy Mule alive, while putting in place the preparations for opening the bar.

Through reaching out to everyone she knew, and managing to circulate her need for investment in the right groups of people, Kerr ultimately used her passion for her business idea to convince ten new investors to come on board. They ranged from the general manager of a large hotel, to the head of a large bank, to other successful entrepreneurs.

“Investors are looking for two things – passion and honesty,” Kerr confides. “Passion is the first stage… They are investing in the person as much as, or more than, the concept. And once they get through the first stage and like what they see, they want to know if they can trust you.”

By the time The Groovy Mule finally opened, its unique concept had attracted plenty of local attention, and it was packed with customers from day one. The bar’s overwhelming popularity surprised not only the investors, but also Kerr herself, who was new to the industry and unexpectedly experiencing her first success.

But all too soon, Kerr’s limited experience in F&B started struggling to keep up with the development of the bar. Coupled with the success of the business, the two exacted a steep toll from her. Disagreements also emerged among the investors about the business’ future. Torn between the various investors, their disparate opinions, and her own visions for the bar, Kerr decided to leave The Groovy Mule for good and make a fresh start.

“It was a very, very stressful time. However, now looking back on it, I wouldn’t change a thing because it was so important for my growth and development,” she says.

Though certainly a challenging experience, it laid down a solid foundation for Kerr’s future career. After The Groovy Mule, Kerr understood the restaurant business in Hong Kong. She opened up two more bars in Central, which both did fairly well. But she wasn’t content with the bar business, and was actively seeking opportunities to push for something more.

The making of FRITES

Kerr’s chance came in 2007, when she was introduced to Viviano Romito, an experienced restaurateur in the U.K. The two clicked with each other instantly, forming what was soon to become a longstanding business partnership. Romito’s creative vision ultimately formulated the much-loved menus at FRITES.

After founding FRITES in 2007, Kerr and Romito also began to explore different cuisines, including Spanish, Thai, Italian, Greek, and Peruvian. All the new ventures were infused with creative concepts: Chicha, for instance, was the first Peurvian restaurant in Hong Kong, serving a selection of exotic seafood dishes.

Almost by accident, Kerr and Romito had struck upon the gold standard of the Hong Kong F&B industry: strong conceptualization, branding, and trendiness. These factors drive the restaurant industry in the city, and can often define success or failure. Novelties such as rainbow-colored grilled cheese and nitrogen ice cream, for example, have experienced brief, wild popularity before finding their place in the tapestry.

Globalization, too, plays a role – when branches of popular U.S. fast food joints Shake Shack and Five Guys first opened in Hong Kong, customers waited patiently in long queues to be the first to enjoy the experience.

“In Hong Kong, people are very sophisticated when it comes to dining habits, so you really need to have something that does stand out a little bit,” says Kerr.

For Kerr, concept defines everything at a restaurant. FRITES’ concept of a Belgian beerhouse runs through-and-through, from its menu to its interior decor. Not only does the uniqueness of the concept make dining experiences more authentic, it also helps to embed FRITES in customers’ memories, so when people talk about beerhouses in Hong Kong, the restaurant remains top of mind.

Another tip Kerr shares, though it may sound cliche, is the golden ‘know your audience’ rule. Ever since the early days of her business, Kerr has been well aware of the importance of understanding one’s target market. When she opened her first few bars, she specifically targeted the banking crowd in Central, the city’s main business district. She designed the bar and launched party nights in accordance with this target.

For FRITES, the company has its specifics sorted – corporate crowd on weekdays, nearby residents and families on weekday evenings and weekends. FRITES’ European-style bistro-beer hall design is intended to create a warm and welcoming ambience and is less pretentious than fine-dining restaurants. It is comfortable and attractive enough for business settings, but the large sharing plates menu also works for families and large groups of friends.

Knowing its target audience down to the fine details has allowed FRITES to tailor its marketing to keep drawing them in.

Biting off more than one can chew

Diversification is usually a good strategy, whether you’re talking about investments or, in the case of restaurant groups, providing customers with greater variety. However, from an operations perspective, managing multiple brands all at once can be cumbersome, involving a more complex administrative structure with a split focus between the various restaurants. Kerr and Romito learned this firsthand with Chicha, Souvla, and all their other restaurants.

“Multiple brands are great, but they were much smaller venues and it was hard to renew them,” Kerr says. “And then at some point in time, especially with bars, customers decided to go to other places as well, so it was harder to keep consistency.”

Eventually, and perhaps inevitably, the wide array of concept restaurants overwhelmed the company’s finances and pushed the team to make strategic changes. Kerr’s team decided to sell all other concepts and focus solely on FRITES.

Difficult though it was to make that call, it proved to be a rewarding choice in the long run.

“We were able to hone our skills and energy into just the one brand, and it was the best thing we could have ever done,” Kerr reflects. “The company runs like a well-oiled machine now, and each area of the business gets the attention it needs to reach its highest potential.”

Indeed, with a more centralized management structure and an acute focus on business development, FRITES has become a thriving and well-recognized local brand and after-work destination for the office crowd.

Running and expanding the business

The success and survival of FRITES amid Hong Kong’s overcrowded F&B industry wasn’t an easy achievement – it required the collective efforts of a well-oiled team. There is a clear division of labor at the management level, with Viviano taking up the operational side of the business – managing the kitchen and front of house – and Kerr focusing on the company’s overall business development.

“We really respect that we have different jobs,” says Kerr. Sharing her secret to maintaining such a strong business partnership for so many years, she adds, “We have arguments and confrontations… I feel like I say no to him on a daily basis, but it helps us to keep each other in check and make sure we’ve always got the best interests of the company [in mind].”

FRITES is now on track for business expansion, with a new branch in Tseung Kwan O and one more to come next year. The company is also looking for expansion opportunities in the Greater Bay Area and further into the mainland.

Every year, young and motivated entrepreneurs try their very best to get a share in the overcrowded Hong Kong F&B industry. The longstanding survival of FRITES in this competitive space is perhaps a testament to the strength of its concept, and the tenacity of its owners.

After starting her business from scratch at such a young age, Kerr has survived and thrived following all the ups and downs in her career. It was a journey filled with obstacles, but she is grateful for having fought her way to success.

“If I had the time again, I would definitely get more experience before starting out, but I’m actually glad that hard things happened to me because this is how you learn from mistakes,” she says. “It’s really when you put yourself through really a lot of stress and hardship that you kind of get to the other side.”

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Iris Wen
Iris is an Editorial Assistant at Jumpstart.

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