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Behind the scenes of China’s healthy food market

Discover right here the China paradigm episode 33. Study more about how one can run a business in China’s healthy food market and find all the particulars and extra links under.

Matthieu
David: Hey, everyone. I am Matthieu David, the
founder of Daxue Consulting, and this China advertising podcast, China Paradigm. As we speak, I
am with Benjamin Patin. I
have translated it in French, but in English, will probably be Patin. Proper? Benjamin
Patin?

Benjamin Patin: Yeah, that’s right.

Matthieu
David: I
guess English speakers will more easily spell it if I say, Patin. You’re the
co-founder of Wheat Co and Sailang
Options.
So Sailang Solutions is a bit older. So,
you found it in 2012. I’m not positive you are a co-founder or founder.

Benjamin Patin: For Sailang
Options, I am the only companion, so founder.

Matthieu David: Founder. Okay. And co-founder of Wheat Co in
June 2015.

Benjamin Patin: Yes.

Matthieu David: Sailang
is all about imports and exports. It’s about supporting importing providers for
corporations which need to import from China to Western markets so far as I
understand. And Wheat Co could be very, very totally different. It’s about the restaurant enterprise in China.

Benjamin Patin: Yes.

Matthieu David: Totally
totally different. And you’re one of these entrepreneurs who’re capable of do very, very totally different companies. Principally, start from scratch again and
creating one thing totally new. So, Wheat
Co is a restaurant
enterprise in China you’ve got. And also you’re going to inform us extra if I’m
right or not. Two eating places plus a third P&L as you say in your
LinkedIn profile, which is the logistics.
I’ll like to know why you say it’s three P&Ls, that are two restaurant companies in China
and a logistic business you will have internalized a way, I feel. So, you’re
going to tell us more about it.

Wheat Co is first a concept, an idea about eating nicely and
healthily, which could be very engaging in China and Shanghai as a result of quite a bit of
individuals have this concern about eating healthy. China’s healthy food market is greater now. During this interview, I’d wish to
go really in-depth on the way you began and
the way you handle Wheat Co, especially
because I do know that now you’re a bit pivoting. And what I observed in your
LinkedIn profile is that you’re talking about Sailang
Options and Wheat Co. in the past. I used to be managing three P&Ls. I used to be managing export and import enterprise for
totally different corporations. It provides me a sense that you are pivoting. You’re doing
one thing else because you are using past tense in your LinkedIn profile.

Benjamin Patin: Okay.

Matthieu David: I will wish to know extra about all this. So
first of all, thanks very much for being with us in this new episode of China Paradigm. Might you
give us an concept of how outright accurate I used to be in my description, and what was fallacious?

Benjamin Patin: Yeah. Alright. Thank you for having me.
Thank you for taking the time to speak to me at the moment. So Sailang was created, such as you stated, in 2013. Import and export businesses in China
to compete with one of my family’s factories in China. We discovered that the
manufacturing unit was not necessarily as competitive as we needed to. So, I created an
export company to put in competition for this manufacturing unit. And we came upon that
all the factories not in Shanghai have been undoubtedly
extra competitive. So, we did lots of business with other factories. It was a great way for us to exit our manufacturing unit management
state of affairs in China.

Matthieu David: So, you had a manufacturing unit in China, right?

Benjamin Patin: My household did. Not me.

Matthieu David: Yeah. Your family has a manufacturing unit in China.

Benjamin Patin: Yes.

Matthieu David: And also you needed you to problem the prices
principally or the approach they have been working.

Benjamin Patin: Yes.

Matthieu David: And you outsource principally to other
factories by discovering them and checking what they have been doing, and you discovered that it wasn’t truly more environment friendly.

Benjamin Patin: Yeah. So, this was in 2012/13. I was in
Shanghai for less than 5 years. I studied Chinese for 5 years. I obtained a
Bachelor of Chinese Language throughout these five years. So very fluent in
Chinese language. And we realized that not every thing was clear between China and
France. So, transparency was not very
there. And we determined to do something about it.

Matthieu David: Might you give some particular examples of
transparency. Is it because they have been hiding some profit and taking out of the profit from the state of affairs? Was it,

Benjamin Patin: I can’t say it like this. It’s just that
I needed to know the value of all the things. And I by no means obtained a clear report of the
value of this or that challenge from the provider. So, if you need to do a
worth, a selling worth or to calculate your margin, it is advisable know your value.
And it’s one thing that I never acquired.

So, it made marvel, like in case you don’t even know the value,
how are you going to make it possible for the company’s earning money or dropping money and the way
are you able to control this? So, it was one of the first things that made me understand
that we have to do something totally different as a result of it wasn’t going to work. And me
speaking Chinese language and reading Chinese language and making an attempt to
utterly redo all the numbers and stuff was simply inconceivable. So, we
determined we would have liked to do one thing totally different.

Matthieu David: Okay. I think about it will be very, very
painful and dear to shut a manufacturing unit in China. I don’t assume it was a simple
determination. Right?

Benjamin Patin: They didn’t shut it. We nonetheless have some
business operating. All the years I was operating Sailang,
or I used to be operating Sailang, it’s simply that
some products have been more keen on doing
in that manufacturing unit because the staff have been used to it and the customer already
approves the manufacturing unit and all this stuff. So, we stored some business in that
manufacturing unit.

Matthieu David: I see. You’re talking in the past as a result of
now, I really feel that Sailang is more like
operating by itself. You’ve got the shoppers. They are ordering all the time. That’s
why it’s extra like what has financed the second
enterprise, which is Wheat Co.

Benjamin Patin: Yeah. So Sailang
was a superb business. We had some setbacks two, three years ago, once I started serious about different tasks.
So, we have now good clients, like
recurring clients. We need to focus more on
importing into China because right here in China, and
the worth isn’t as competitive as it was. The rate once I came to China
was €1 for ¥12. Immediately, it’s €1 for ¥8. The price of labor has elevated rather a lot.
So, it’s not as fascinating for a European firm to buy in China for some
products. It’s tedious for some others, however we received some tasks that have been
shifted to Portugal or Japanese Europe. So closer to France, closer to Europe,
for a supply time, and so forth.

Matthieu David: Sourcing from Portugal?

Benjamin Patin: Sure.

Matthieu David: Okay.

Benjamin Patin: So, our shoppers received some new contracts with
suppliers in Portugal. For wooden and metallic, it may be extra fascinating. So, we lost some business in that sense. We would like
to develop more the export
business in China, however we’re not ready but. We don’t have a salesforce
here. We don’t have logistics. We don’t have all of what you have to be
profitable for import. So, it can take us time to develop this.  We’re interested by it. Simply not as much as
of a hurry because of other companies.

Matthieu David: Before we move more in-depth on it, I might
like to know extra about Sailang and
all these import and export
business in China.

Benjamin Patin: Okay.

Matthieu David: Let’s say export since you’re mainly
focusing on the export.

Benjamin Patin: Yeah.

Matthieu David: I see so much of entrepreneurs in export businesses in China.,
however I all the time query myself, with the Internet and a lot info and the
incontrovertible fact that we are speaking better English, what is the value of somebody as an
middleman? And the second question is, how
do you worth your work? As a result of for those who worth on the quantity they purchase and the worth your shoppers purchase, you could have the interest
to sell at a high worth. You might have the selection for the manufacturing unit to sell at a high
worth. If your invoice on the quantity of models, then you might want to worth for each
shopper in another way. In case you worth on period,
then okay, yeah, it’s like externalized workforce, but then it’s not scalable.
So, what’s your view on the enterprise model, which may really work in export?

Benjamin Patin: Seven years in the past, we used to price based mostly on a
margin. So, we have been shopping for at 1 and setting at 1.1, 1.2, or 1.three.

Matthieu David: Did the shopper know that?

Benjamin Patin: Yes, the shopper will know kind of that
we made a margin on it.  As we speak, with Alibaba, AliExpress, and all these platforms, it’s much
harder to get an excellent worth, let’s say for the buyer as a result of
they may go on Alibaba and be like, Oh yeah, Alibaba is cheaper. Our added
worth is that we cope with the suppliers instantly. We remove lots of middlemen. Once we did analysis on-line, we
realized that many individuals promote via middlemen.
And in the finish, there’s one manufacturing unit providing for everybody. So, we try to get
to the producer instantly, which takes time, but in the finish, we get higher
costs. And either we put margins, or we
put a worth per order, which works nicely
for some nations. So, we are saying one container, we’re going to take X margin, and we simply
base out revenue on that.

Sadly, we get lots of requests for very, very small
portions that they don’t need to cope with AliExpress or suppliers. We don’t
do it as a result of it’s very time-consuming. It’s simply not fascinating sufficient. So,
we have now lots of those that ask us, like hello, I would like 1000 pieces of this
jewellery. And we inform them like you just
go to Alibaba and purchase it. Don’t ask us to do that for you. Pricing gained’t be fascinating for you guys to only
start a brand new business. So, we try to choose our clients. It really works a
lot. We’ll say it like Bouche à Oreille in French. Phrase to mouth.

Matthieu David: Phrase of mouth.

Benjamin Patin: Yeah. With clients in France and Mexico in
Latin America. So yeah, in Sailang, this
yr, we’re going to focus so much on eco-products because it turns into one thing very fascinating.

Matthieu David: Eco?

Benjamin Patin: Yeah. Ecological… like methods or products.

Matthieu David: Okay. Ecological. Okay.

Benjamin Patin: It’s one thing that goes nicely with beliefs,
something that I consider is essential. There
are some new legal guidelines in Europe which were for it.  So, it’s one thing that we need to give attention to.

Matthieu David: Yes.

Benjamin Patin: And it’s going to be one thing that we would like
to realize. So, we’re in search of good
suppliers and good products, and hopefully, we might be ready, I feel, by
September with a brand new line of products.

Matthieu David: I see. Truly,
I’ve seen different gamers shifting in terms of import, serving to to seek out low cost
merchandise to helping to seek out correct
merchandise with certification or products which are truly good for the planet, which is ecological. And China, I
really feel, isn’t that badly positioned
as a result of no different country has so many factories and so good infrastructure to be
capable of change to extra ecological and
totally different natural products
in China.

Benjamin Patin: Yeah.

Matthieu David: I understand. Okay. Then this enterprise, Sailang, helped you to start out one other business, which is Wheat Co. Completely totally different. Four years ago, truly.
But in between, truly, there’s
one thing else I needed to ask you. It’s that four, five years in the past, you got here to
me for analysis about promoting products from Provence, I keep in mind if I’m not
mistaken.

Benjamin Patin: It’s a pending undertaking.

Matthieu David: Okay. Can you speak about it or it’s
confidential?

Benjamin Patin: Can we speak about it just a little bit? Not
really, because the sample of shopper habits of China changed so much, the approach
of individuals selling all the things and from all over the place. To vary individuals turned
one thing big, and we simply need to make it proper. I’m from
Marseille. I am from Provence, and it’s a
range of products that we actually wish to
use it for ourselves. And we need to make it right. So, let’s say it’s a very good
product. It’s one thing that we use day-after-day in Provence.

Matthieu David: For example? Might you be extra specific
about the merchandise?

Benjamin Patin: No, not likely.

Matthieu David: Okay. You possibly can’t mention.

Benjamin
Patin: Yeah.
The branding is ready. The packaging is prepared.
The product is recognized. We are going
to import one pallet quickly. When it’s achieved,
we have to have the website ready. It’s
one of  TMall outlets, and so forth. So, we nonetheless have some
work to do. I will let you already know as soon as we launch it a bit prematurely if you would like,
but proper now, I can’t.

Matthieu
David: We
will run another one. We’ll run another podcast once you launch it. Is it
extra cosmetics? Is it food? Might you give us a course?

Benjamin Patin: No, sorry.

Matthieu David: No. Completely
confidential.

Benjamin Patin: No. It’s been five years. No one is aware of. Solely
if you already know what that’s it. If we have to verify up some things from there, why
not?

Matthieu David: So, when you’ve gotten an export business in China, I really feel you assume
about adding more value, checking more the products, and discovering extra ecological
methods of producing high quality. Okay. One other facet is, as you stated, importing
products. Quite a bit of individuals who have been exporting merchandise to the West assume
they might import in China because China
could be very dynamic, and China’s healthy food market
could be very mature. As an export enterprise in China, have you seen other individuals
switching in your business from export to import efficiently?

Benjamin
Patin: I
know huge corporations that do both very nicely.

Matthieu
David: Okay.

Benjamin
Patin: I
don’t really know exporters which have
been importing yet. I don’t know. I don’t know anyone that did that.

Matthieu
David: Everyone
is speaking about it, right?

Benjamin
Patin: Sorry?

Matthieu
David: Everyone’s
speaking about it. It looks like it’s not troublesome.
The only thing that’s troublesome is…

Benjamin
Patin: To
import one pallet is something that anyone can do. You don’t have to have a
firm for that. You simply have to pay
the taxes once they arrive and then you possibly can promote it nevertheless you need. Nevertheless,
import enterprise with a warehouse in the free trade zone, yes or no, to have
vans in China to convey the product from A to B, B to C, or C to D, is
something totally different. So, it’s one thing that if you wish to make it, you need
to make it proper. It takes time and manpower.
It takes planning. You just can’t import it. You possibly can meet just the importer. So simply
like with the paperwork for one container or one pallet, but to truly import
for your self and do all the procedures and every little thing and then distribute is
one thing utterly totally different.

Matthieu
David: I
feel one of the difficulties is that if you need to import, you need to be
the model. You need to do it very right with branding, positioning, and so on.
If you export, that’s the job of the different guy. That’s the job of the company
which is importing. You possibly can see the most troublesome
thing as a result of importing as a course of is
not that troublesome. As you stated, a free commerce zone and so on. Nevertheless it’s to truly find the positioning, creating the
brand and so on. Do you agree with the evaluation?

Benjamin
Patin: Utterly.
Once you see our clients in France, they’re importing, but they are shopping for for themselves or their
customer. So, they know what they’re shopping for, and
they know what worth they need to buy it, they usually’re going to make use of it anyplace in Europe. What we’re doing as
an importer is like we like the product and we need to try to send it to China.
Are Chinese language going to purchase it? Perhaps, however can we ensure about it? No one can
know. We need to attempt. So, it’s utterly totally different. We don’t know if someone
goes to buy the product we are going to import. We’ve many importers that
come to me every two or three months with rather a lot of like close-to-expiring-date
merchandise, they usually need the product for
like a quarter of the worth and if we will take it. However for them, it means they
don’t become profitable. They lose cash. So, it’s one thing to be careful about. The shelf life for different merchandise in
China is very important. Even for wines,
it’s shelf life. So, it is advisable to watch out. You possibly can’t simply have anything you
want in your restaurant
business in China. It is advisable to watch out about this.

Matthieu
David: Yeah.

Benjamin
Patin: And
be careful of what you import, because in the event you don’t sell it inside two years,
the product will go dangerous and then you definitely
can’t do something about it.

Matthieu
David: Yeah.
There’s Farine Bakery we needed to shut down in a dramatic state of affairs because of expired flour.
Okay. I now perceive what you’re considering, “I’ve an export enterprise in China.
I need to import or export merchandise that are extra organic merchandise in China “. However
lastly, you determined to do one thing very, very totally different, which is the restaurant business in China.

Benjamin
Patin: Yes.

Matthieu
David: How
come?

Benjamin
Patin: So,
the Wheat Co. story is a comic story. Once you got here to my workplace, I was
studying Spanish at that time with anyone. I simply met by way of the Internet.
He is a Spanish man, and he used to teach me Spanish. And during our
courses, we talked about vitamin, sports activities, many issues related to health and
self-improvement, let’s say. And I was telling him like, “Look, I’ve been
understanding. I be ok with myself, however I don’t see any distinction in my
body. How come?” And he was telling me, “But what do you eat?” I’m
like, “I don’t know. I’m going to that restaurant. I order Burger King. I order
this. I eat, however I work out. So, it’s okay.” That was five years in the past. 4
years in the past.

And he was telling me, “Yeah, but you’ll by no means see
results together with your food regimen. It’s essential eat healthily. I’m like, “Okay, what
can I eat? Like, inform me where to go, and
I’ll go.” He’s like, “No, you can’t. You completely should prepare dinner for yourself. So, you must plan your
meals and prepare dinner your breakfast, your lunch, and your dinner prematurely and then
keep on with the plan and just eat each day.

And I was like, back then once we sat down, I used to be really busy. I was traveling all over China.
I’m like, I don’t have time for that. Like no means. And we began considering
about how you can make it—because I was not the only one—find out how to make it out there
for busy businessmen to have the ability to eat
healthily daily with out considering and without cooking and with out doing
groceries. And we got here out with Wheat Concept. There was a food plan lab at the
beginning. And then we switched to Wheat to assist individuals to eat higher and
healthy food and to attempt to educate on what healthy food really is and just for individuals to eat properly, to work properly in China’s health food market.

Matthieu David: Okay. I feel the concept could be very engaging. I feel as foreigners in China or individuals who have been dwelling abroad
or people who are constructing families, we all take into consideration this healthy means of
dwelling. Why do you assume it’s not yet mainstream? That China’s healthy food market just isn’t that
mainstream? Why don’t we see those healthy
restaurants all over the place or very straightforward to order on-line and so on?

Benjamin Patin: There’s, already.

Matthieu David: There’s?

Benjamin Patin: Individuals assume there’s, but in truth, there’s
not that many. There’s a misconception in China considering that eating salads is
healthy. So many people are like, “I ate salads for lunch. But the sauce
is full of sugar. So, they may take pleasure in the salad
as a result of the sauce is nice. Many of my clients requested, despite the fact that they
didn’t know that we serve the sauce on the aspect all the time. Many restaurant companies in China
serve the sauce instantly on the aspect. And this customer will request to have
the sauce on the aspect because they know
it gained’t be healthy. This is just one
example of miscommunication of what is basically
occurring in the world normally, not even in China. China’s healthy food market is sort of obscure. Chinese language individuals will
assume that consuming meat isn’t healthy.

Matthieu David: Actually?

Benjamin Patin: The secret shouldn’t be eating meat or not taking
meat. It’s simply the method you prepare dinner the meat. So, we just attempt to make good, an ideal recipe like nicely prepared, tasty,
and with good organic products in China so it doesn’t
affect your physique or it doesn’t make you achieve weight or all this stuff.

Matthieu David: Okay.

Benjamin Patin: So, it’s nearly educating Chinese, and even the world of consuming healthily does
not have the salad, however it’s about tips on how to prepare the food.

Matthieu David: Okay. Let’s go a bit more into the numbers
to provide an concept of the way it worked for you, for Wheat Co. together with your restaurant enterprise in China.
You’ve got since you haven’t referred to as us yet, but
I really feel you’re pivoting to another mannequin.

Benjamin Patin: Sure. Sure.

Matthieu David: Might you tell us extra about every number
that someone want to understand the restaurant business in China needs to know? Worth
of leasing sq. meters and the way to lease an area. Do you need to commit for
one yr? For two years? Do you set a deposit of two months? About the place,
how does it work?

Benjamin Patin: Okay. In China, me for instance, as a result of I
converse Chinese language and I love to do issues by myself, I discovered the places by
walking round. Walking or on a scooter or a bicycle, but identical to taking a look at
what I would like. So, you go searching. You see a place you want. There is a telephone
quantity. You call the telephone quantity; you
make an appointment, speak to the individuals, and
you get the deal achieved. The lease is often
signed from 5 to ten years.

Matthieu David: Wow.

Benjamin Patin: A lease of 5 to ten years. Yeah, because
it is advisable to make renovations and it is advisable pay again the investment. So yeah,
it’s 5, ten, or fifteen years even. Additionally, there’s a enterprise license in
eating places. So, you will purchase a switch payment to the previous proprietor of
that license. They will go from ¥50,000…
I mean it may be from ¥zero to ¥1M. There isn’t any restrict on this. It is determined by the place
you’re.

Matthieu David: How come?

Benjamin Patin: Individuals repair it like, “Oh yeah, I pay
that a lot cash for my license. I would like that a lot a refund

Matthieu David: I see. Secondary market. It’s not the
administration. It’s a secondary market.

Benjamin Patin: Yeah.

Matthieu David: Okay.

Benjamin Patin: It’s like you have already got a license associated
to that tackle, and for those who don’t
contemplate that license, you possibly can switch it from one individual to a different, from one
Chinese to at least one Chinese, one Chinese to at least one foreigner, or one foreigner to at least one
foreigner. So, you really purchase the
license. The fee of lease is hard.

Matthieu David: For the location, right? For the particular location.

Benjamin Patin: Yes, sure, sure, yes.

China’s healthy food market

Matthieu David: Okay.

Benjamin Patin: The lease is per square meter per day, like
workplaces in Shanghai. The worth will rely upon where you’re. It can be from ¥22
per day to 50; I heard it is 50 right
now.

Matthieu David: 22 to 50. Yeah, I obtained this number as properly.

Benjamin Patin: ¥50 per day per square meter is large. It is why I feel at the moment, many eating places are closing down in
Shanghai—as a result of the worth of the lease could be very high. And that’s why we are
switching to our new idea that we will speak more about.

Matthieu David: Yeah, you’ll inform us afterward. Truly, I need to, via this interview,
make you a KOL
on opening a restaurant. I need to add all the numbers to
make you a thought leader about it.

Benjamin Patin: Okay.

Matthieu David: So, for those who can share, I consider that it’ll
be very, very useful for everybody listening. I understand that leasing is the largest value. Isn’t it?

Benjamin Patin: Yes.

Matthieu David: So, what’s the second value you’ve?

Benjamin Patin: I might say the employees.

Matthieu David: Okay. Roughly, what’s the wage of a waiter
or waitress?

Benjamin Patin: Sorry? One salary of a traditional waiter, I will
say, we pay them between 5000-6000 of their arms plus tax.

Matthieu David: Okay. Okay.

Benjamin Patin: For a standard waiter, it is going to be paid more. For the kitchen, it’s the similar
kind of; from 4000-6000 also.

Matthieu David: Okay. So the complete value for one worker with
taxes?

Benjamin Patin: No, like eight.

Matthieu David: Okay. I see. Do you need to pay for the
house?

Benjamin Patin: It relies upon. For me, I didn’t need to as a result of
you may be liable if one thing occurs in the home. So, I all the time refuse to pay
for the house. We give one employees house
allowance as part of his contract, however often, we try to find people who stay
in Shanghai that have a family. So, they stay with their family, or they’ve already settled down. It isn’t
part of the equation, however many individuals do. For me, it was by no means half of the
plan. We do give them food. So, in the beginning, we are cooking in the
restaurant for the food, but our food is healthy, no oil, no this or no that… and their food was a complete opposite. So,
we decided that they wanted to eat outdoors. So, we gave them a voucher of ¥X
per day, they usually simply go during the break and eat
wherever they need.

Matthieu David: I see. How did you discover them?

Benjamin Patin: So, for the first restaurant, we employed a
advisor chef to assist us with arranging the menu. And he really helpful one
chef, like a Chinese chef that brought all of his Chinese language staff for the kitchen.
And the service employees have been the similar, like asking some individuals in some groups
that we needed some stuff. After which, like a suggestion of one or two and
then increasingly coming.

Matthieu David: You by no means did it by way of on-line posting.

Benjamin Patin: Not in the beginning. Once we opened, we
knew that we would have liked to hire 50 employees. Yes, we did.

Matthieu David: Okay.

Benjamin Patin: Sure. We knew posting online is a very environment friendly approach. You set one ad, and you have 50 CVs the subsequent day. It’s essential
spend rather a lot of time interviewing because some of them just apply for a job, but they’ve by no means completed the service before.
So, it’s type of tough. Shanghai is
utterly totally different. Additionally, it’s difficult because it is advisable understand how much
you’re prepared to pay for any person and keep on with that worth. Some individuals would
ask you crazy salaries because they have the experience, but at the end of the
day, it doesn’t make sense in your corporation model in case you increase the salary value
an excessive amount of. So, we attempt to maintain the similar wage for everyone.

Matthieu David: Okay. The first location was Shanghai, which
is understood to be a very expat space with quite a bit of expats dwelling there.

Benjamin Patin: We opened before the park.

Matthieu David: Okay. I see. So it’s a place in Shanghai
where quite a bit of eating places have opened, which isn’t far from the location you
had.

Benjamin Patin: Yeah. They drive all the visitors from
downtown to this place. So many eating places closed down after that. So we’re
all the time working nicely. No drawback. With no
program. But yeah, the foot visitors was very difficult.

Matthieu David: I see. I see. So, the second value is employees.
Then what other prices do you must
contemplate to start out? You stated renovation. You need to renovate if you take the
lease. How a lot funding do you must begin
for, let’s say, the first two or three months?

Benjamin Patin: Yeah, I might say from reminiscence ¥10,000 to
¥20,000 per sq. meter of development.

Matthieu David: Okay. So, in the USA, it is going to be $1500 to
$3000.

Benjamin Patin: Yeah, kind of. Yeah. Depending on the
quality you need to have and what type of material you employ, however kind of,
it’s this. The most important value for
eating places can be kitchen gear. All the things is chrome steel.
Every thing can be FDA-approved. And to have a logic of positioning, you want
to have the kitchen drawings made. Before you start development, then the FDA needs to approve it. To do it, often, it’s
not the means you need. Something weird will happen in your format, however they need
to approve it first. It’s an enormous value. Extraction. Fuel strains. All of these
are pricey. If it’s already put in, it
is nice. That’s why you pay the switch
charge. If it’s not installed, the value of
it must be thought-about.

Matthieu David: Okay. How a lot did you spend then to start out?

Benjamin Patin: We spent around $100,000 in complete for the
first restaurant.

Matthieu David:  Okay.

Benjamin Patin: Land. Houses. Development. Employees. The primary
month of operations.

Matthieu David:  And
how massive was it?

Benjamin Patin: 80m2

Matthieu David:  80m2
in your first location?

Benjamin Patin: Yeah.

Matthieu David: Okay. I assumed it was smaller because I
went to your restaurant.

Benjamin Patin: It was 80 but not made very nicely, so there
is so much of area.

Matthieu David: I see. Okay. So truly, had a reasonably good
worth for the renovation because if I take 80 occasions $1.5K, we are round more
than $100Okay.

Benjamin Patin: Yeah. It was okay. Good negotiation expertise.

Matthieu David: Okay. Have you been cashflow constructive in the
restaurant?

Benjamin Patin: In the beginning. Sure. After six months.

Matthieu David: It’s pretty brief, isn’t it? Is it normal as a restaurant?

Benjamin Patin: I imply, in Shanghai, they are saying you have got one
yr to see if your corporation is going to work or not in restaurants.

Matthieu David: It takes one yr to be cash-positive. Okay.

Benjamin Patin: It takes one yr to be cash-positive. Yeah.

Matthieu David: Okay. Once we say cash move constructive, principally, the revenue minus the value is
constructive. It doesn’t imply that whenever you pay again your funding, it’s
constructive.

Benjamin Patin: No. Precisely.

Matthieu David: I see. Okay. I perceive. And the second
location was not.

Benjamin Patin: No. So, what occurred is that the kitchen
was around 20m2. So, it was a really small
kitchen. We did so much of deliveries, and
we arrived at some extent the place the kitchen couldn’t keep up with the restaurant
deliveries. And we have been on the lookout for a second location a bit greater, round
150-200m2. We seemed for it for six months, one yr, something like this. So,
we seemed and seemed and seemed, but we by no means discovered what we needed. All too
costly or not well-located or too small or too huge. It was robust. And we
discovered someplace close to Jing’an Temple. For
me knows or oh very nice commerce, very well-known triaged means like near Jean
and temper. So, we’re like, “Okay, let’s go for it.” It was huge. In complete, it was virtually 500m2. So 470m2.

Matthieu David: 500m2?

Benjamin Patin: Yes. 470m2. It was like 350m2 on the first
flooring and 120m2 of the kitchen.

Matthieu David: That’s big. Okay.

Benjamin Patin: The lease was fairly high. And that’s why we
didn’t maintain it open for multiple yr.

Matthieu David: Okay. So how are you going to stop a contract,
since you stated that the majority of the lease contracts are 5, ten, fifteen years?
Do it’s a must to depart a deposit?

Benjamin Patin: Once we knew we have been closing, it was the day
after we gained the World Cup. So, I used to be fortunate enough to modify. After six months,
we knew that promoting healthy food in that location wouldn’t work. So, we switched to more of a bar spirit in this area
as a result of it was a bar road journey and all the things. And we received a contract with
some individuals from France to be the official host of the World Cup for French
supporters. So, we obtained rather a lot of traction from that. We hosted the World Cup and
then, the day after, we stated, “Okay, we are closing.” I informed my landlord, “Is that okay in the event you discover anyone
to take over the lease, I may give you again your deposit.”

Matthieu David: Okay. And also you found it…

Matthieu David: Yeah. So, I spent multiple month to seek out
individuals, negotiate the transfer charge, negotiate the phrases of the lease, and so on. And
when it was accomplished, I just signed a paper
with them and signed a paper with the
landlord. They usually paid me what they needed to pay me. And it was over.

Matthieu David: I see. Reworking Wheat Co. which is a healthy
way of life restaurant enterprise to a bar with quite a bit of alcohol and managing,
perhaps, people who find themselves not sober or drunk for a couple of weeks even is a completely totally different enterprise. Weren’t you scared
to be on this enterprise with bar, alcohol, and
so on, which is totally different administration? And in terms of way of life, does it
require totally different licenses?

Benjamin Patin: For the licenses, it doesn’t require
something totally different, because any restaurant license in principle additionally has an
alcohol license matched with it the place you possibly can absolutely
promote alcohol besides in some areas. However, often, it’s not an issue for the
alcohol license. And part of me switching to alcohol business, it was okay. I’m
used to it. I had labored in eating places once I was in Europe. Once I was a child,
I used to be working in eating places, so it’s not an issue. I also worked in Shanghai
for some occasions, so I am acquainted with it. It’s not an enormous problem. I know the
right individuals in the business. The most important drawback might have been drugged because, on this area, it’s very frequent. However we control it fairly nicely,
so it was okay. It was okay.

Matthieu David: …which is a really massive
factor in China.
You can’t do something like this. Medicine. Okay. I see.

Benjamin Patin: I mean, it was a very good experience. I liked
every little thing about it. I can’t do it once more.

Matthieu David: What? The bar or Wheat Co.

Benjamin Patin: The bar.

Matthieu David: Okay. Okay.

Benjamin Patin: Working long hours
very late at night time, consuming together with your clients day by day, having individuals
coming over only if you’re here just isn’t something that anybody needs to do. If in case you have an idea of a bar with some nice music,
good space and, perhaps, a traditional alcohol provider. Not likely.

Matthieu David: Okay. I see. Once we went in your web site, and Sophia ready the interview with some
info which has been  achieved
in your website, we expect that it was greater than the restaurant. Because it’s also about teaching individuals on what
to eat, methods to eat, and constructing a group. Is it something which was a
focus? Or is it just a approach of talking about the restaurant?

Benjamin Patin: It’s just a little of both. I feel telling
individuals what we expect is healthy food and a healthy way of life is, is necessary. So, they will perceive more why we
promote what we sell.  Nevertheless it’s additionally necessary for individuals to be able to study
healthy issues usually and to ensure that…
I imply, we try to be as honest as potential in the whole lot we write. It’s not
straightforward as a result of typically even we’ve got totally different opinions. So, we try to hold the
concentrate on what is Wheat’s level of view about healthy food, working about, and
all this stuff. However yeah, we do it. We do it as a result of it’s essential to speak
about all this stuff, and of course to have individuals speak about us now in China’s healthy food market.

Matthieu David: Okay. So, you have got many restaurant businesses in China.
And if you have been talking about the coaches, we have been speaking about your
product. It was a advertising device, but not necessarily truly a business in itself.

Benjamin Patin: Yeah.

Matthieu David: Okay. Going
back on the costs, there was a question I didn’t ask you. You stated three
P&Ls, so two restaurants and logistics service. Might you tell us more
about logistics?

Benjamin Patin: It’s not likely
a logistics service. It’s like it’s nonetheless a restaurant we opened lately. I imply
officially opened just lately. It’s been
operating since August. So, the day I closed the former one, I opened that one.

Matthieu David: Okay.

Benjamin Patin: And since then, we are enhancing every little thing
into it. We need to have clients having the similar food each day. So, so much of
food processes, lots of control on the prices, on manufacturing, and on all this stuff. So, a troublesome time in the kitchen. And we just need to have the ability to have one good enterprise mannequin that is straightforward
to set up and straightforward to duplicate. So, we worked lots on that. And it’s a small
area. It’s 45m2, and it’s 40 m2 kitchen.

Matthieu David: So 40m2 for individuals to take a seat?

Benjamin Patin: No, 40m2 kitchen and 5m2 for individuals to take a seat.

Matthieu David: Oh. So just
to select up the food principally.

Benjamin Patin: Exactly. We have now some chairs. If you need,
you possibly can sit down. There’s sufficient area to take a seat down and eat there if you would like,
but the point is we simply need to have
individuals choosing up their food or doing advance and choosing it up.

Matthieu David: When did you open?

Benjamin Patin: We opened final Monday formally.

Matthieu David: Wow. Very current. Where is it?

Benjamin Patin: It’s essential discover it.

Matthieu David: On your website, it’s written, right?

Benjamin Patin: No, what I’ve accomplished is like we revealed an
article that that you must discover the place. We’re going to release the date in the
subsequent few weeks. I can inform you.  I imply
for those who don’t publish the video instantly, I can inform you.

Matthieu David: In a single week?

Benjamin Patin: Yeah. So, the tackle is in Xinzha Street
1990.

Matthieu David: Okay. It’s an excellent location.

Benjamin Patin: Foot visitors is sweet. Yeah.

Benjamin Patin: Do you care about the foot visitors if it’s
5m2?

Benjamin Patin: Not likely, because we solely do deliveries,
however throughout occasions of advertisement and other people seeing the brand every
day, it’s fascinating.

Matthieu David: Another thing is it might truly be a very good investment as a result of it’s so
pricey to do advertising on-line, to buy Baidu as properly, to do WeChat…. and truly
being offline. Simply seeing the identify could also be quite environment friendly. I see. How are you
going to deliver? Are you going to use the regular
delivery like Meituan or you’ve got your personal
means?

Benjamin
Patin: We
are already on Meituan and Sherpas. Sherpas. It’s an English version.
S H E R P A S.

Matthieu David: Oh yeah. Positive. Okay. I see.

Benjamin Patin: Okay. So, we have been
working with them all the time three years ago. We now have our personal supply service additionally. So, you’ll be able to order from our web site.

Matthieu David: Why?

Benjamin Patin: Sorry?

Matthieu David: Why? Why do you’ve got your personal? It’s pricey.

Benjamin Patin: It’s extra worthwhile for us in the event you order
via my web site immediately because other platforms take a commission between
10% to 30% depending on the platforms.

Matthieu David: Depending on the climate as properly, proper?

Benjamin Patin: Sorry?

Matthieu David: Depending on the weather as nicely.

Benjamin Patin: The weather solely impacts the buyer. The
customer goes to pay extra of a delivery payment if it’s dangerous weather. But for the restaurant, they rely upon revenue. The
extra revenue you make, the much less commission you’d pay.

Matthieu David: Okay, I understand.

Benjamin
Patin: Whereas
for me, should you order from me instantly, we don’t have drivers. We outsource to a
third get together. Let’s say a DiDi of deliveries. So, you order with
us. We ebook a driver. He comes and decide up the food and delivers it to you.

Matthieu David: I see. So principally, Meituan and Ele.me make you pay. I imply Meituan
because I feel you didn’t mention Ele.me. So, let’s say Meituan truly makes you pay for finding the shopper.
They make you pay for the affiliation for the affiliate whereas once they go to
your website, you don’t pay for the buyer acquisition. You simply pay for the transportation, but you don’t do it by yourself. Okay. I perceive.

Benjamin Patin: So, for us, it’s more fascinating if individuals
can go to our web site instantly. Sadly, individuals are used to going to the similar platform day by day to order from
totally different eating places. That’s why we do promotions at totally different prices which might be only out there in case you go through our
platform. And we attempt to push individuals to order increasingly more with our website.
So, we try to improve the website expertise each day.

Matthieu David: Okay. If you say web site, is its web site
or mini-program as a result of now we talked so much about
mini-program.

Benjamin
Patin: Right
now, it’s an internet site. It’s an internet site additionally in China. There’s WeChat Pay, and Alipay built-in, so not an issue for Chinese language. We’re engaged on
a mini-program which can just be an
interface of the web site in a mini-program version. We’re engaged on it. It
ought to be actually quickly, but it’ll take
us a while to do it. Nevertheless it’s in progress.

Matthieu David: Okay. Okay. I understand. Is it the similar
food? Similar idea?

Benjamin Patin: Yeah, exactly
the similar food. Similar concept.

Matthieu David: Similar menu?

Benjamin Patin: Similar menu. We’ve improved some menu, however yeah. We have now some new dishes and
some new recipes, however principally, it’s the similar for 3 years.

Matthieu David: Okay. Do you assume you aren’t conversant in healthy food? And also you stated it is dependent upon
the way you prepare dinner it. So, you set oil. You set butter and so on. It also depends upon
the way you source it. Where did it come from?
How have you ever found a dependable source to choose healthy food from?

Benjamin Patin: Good question. In China, it is quite
difficult. China’s
healthy food market is sort of difficult.

At the very starting, we needed to have as many organic merchandise in China
as attainable. Yeah. And I went to many organic farms right here and there to truly see the high quality of the product. The
certification of the land may be organic.
The land was
only recently reworked into an natural
land, however deep down, you knew it was not
that natural. And next to it was a manufacturing unit, like rejecting… I don’t know what. So, you’re prefer it’s not
that organic at the finish. We import rather a lot of organic merchandise in China, but they promised China
that they don’t permit to have an natural
degree in imported organic merchandise in China until they have authorised the manufacturing unit. So,
it’s variety of difficult to have natural products in China from abroad. We know it is.
We market it. We will’t market what’s natural.

So, it’s a problem. For China, we have now good suppliers that give us good merchandise. We trust them. We examine the
quality. Some of them are natural. Some of them will not be. But we don’t give attention to
this as a result of it should impression the buyer to have a worth means too high for the
food they might eat. And we choose to eat properly and sufficient then just to pay for organic merchandise in China which may not be.

Matthieu David: Okay. Okay. And also you talked about the method on
how one can communicate to the finish shoppers on how you source because you could have achieved
all this work; to the supply, to bid it and so forth. Is it one thing you’ve gotten
considered speaking? I feel that rather a lot of eating places say, “My
meat is coming from Australia. My food is organic. ” However truly, as a buyer, we’ve got no approach of
checking. We’ve no approach of getting some sense of what has been accomplished and what is true and what’s not even true.

Benjamin Patin: With extra manpower,
I might do it. With more individuals in our workforce and more employees, we might assume
about it proper now. We are, let’s say, a small group so we attempt to give attention to what’s essential
and necessary is to make individuals know us
and order from us regularly.

Matthieu David: I see.

Benjamin Patin: We try to talk rather a lot into our meal plans.
The meal plan is the most important enterprise. So, the restaurants order one salad a day.
It’s good for us. The top product is our meal plans. Meal plans shall be for me
to deliver each day based on
no matter requirement your body needs with totally different choices as a vegetarian,
ketogenic weight loss plan, gluten-free food plan, and all this stuff. So, we meet lots of
needs for those who won’t have the ability to discover what they need each day.

Matthieu David: How did you get this data? I discovered on
your web site, common eating regimen, ketogenic weight loss plan, and detox weight-reduction plan.

Benjamin Patin: Yeah.

Matthieu David: How did you get this data? Did you get
certified? Did you comply with some courses? Did you simply
watch rather a lot of movies and skim blogs?

Benjamin Patin: For all of the menu, often what happens is
like we create recipes the means we expect it will be nice. After which with one of
our partners, who is a nutritionist, we verify all the things.

Matthieu David: Okay.

Benjamin Patin: We examine that every little thing truly follows the Wheat Co. tips. That
approach, we will make it possible for all the things is the means we would like it to be and that it
respects this much quality, this a lot energy, that a lot fat per meal and that
much protein per meal. And then we simply
work round it to ensure that every meal is constant for one individual for
one meal.

Matthieu David: I don’t assume you talk that much on
the nutritionist, which is something I might be very satisfied by—that you’ve
designed with a nutritionist. Why don’t you talk
more on it?

Benjamin Patin: We’re sort of
saying mentor, but I might level it out for the subsequent time. We have now a
nutritionist type on-line, only if you’ll be able to see on the website, where you’ll be able to truly put your personal info, and also you get
a free suggestion from us to understand how a lot your body must eat.

Matthieu David: It’s a bit sluggish, but I’ll verify. Okay. I perceive. Might you be more precise
about the meal plan? Does it imply that it’s a subscription business the place I pay
for each week or a month after which, I receive it at house? Might you elaborate
more about it?

Benjamin Patin: No. In the world, this type of meal plan
enterprise is number one. Like you pay a subscription. You pay for one month, and also you increase your food every day. Say some other companies
in China can be like, you buy one week, you purchase five days, ten days or 20 days
and we’ll deliver to you. We actually
need to push into enterprise individuals, busy individuals, which may not be capable of have
breakfast every single day or can have a enterprise dinner or can have a business journey
or so. So, we actually personalize the
supply in phrases of you wanting in the future of meal plan tomorrow; you possibly can have it.

Do you need to have two days? You’ll be able to have it. You need to
have two days, but with out one dinner? You possibly can have it. So you are able to
personalize your order in line with what your schedule is, which could be very
essential because when you’ve got one workplace job that you simply do from 9-6 each day and
by six, you’re residence, you’ll be able to order from any person else and have your food each
day, the four meals, at house. I do know that many individuals journey. I do know that many
individuals have a enterprise dinner or a enterprise lunch, or business breakfast even,
but they may not give you the option all the time to have four
meals. So, we actually work into
making a customized answer for individuals to have the ability to adapt in response to
their schedule.

Matthieu David: However how are you going to have a meal plan if half of
the food I eat shouldn’t be from your restaurant? Then it’s not consistent, so I have to go each day.

Benjamin Patin: So, what we do is in the event you can’t have our
breakfast from the meal plan, because you’ve been consuming it for a number of days, you
know, kind of, what it’s worthwhile to do. Then it’s up to you to have an excellent omelet or croissant with butter and
Nutella. We will’t pressure individuals to not eat
what they see once they don’t eat with us.

Matthieu David: I perceive. I imply my considering was I’d truly
adapt my meal, what I have to eat depending on what I ate with you or what I
ate with someone else. Is it one thing you’re also advising because I am on
your web site now, however I don’t see the advisors you’re mentioning? I see ‘Order
Now.’ Oh, ‘Nutrition Consultation.’ I see.

Benjamin Patin: So, the vitamin consultation is for you to
get an concept of how much energy your physique ought to eat each day in line with what objective you
need to achieve.

Matthieu David: I see.

Benjamin Patin: It’s only a suggestion. It just free ideas. So, it’s in accordance with how typically
you work out or whether you’re taking protein every single day or like all these sorts of
questions. And from that, we will determine what’s the greatest meal plan for you or
the greatest calorie consumption plan for you.

Matthieu David: Okay.

Benjamin
Patin: Then,
from that, you’ll be able to either order on-line. We’ve got all the energy on all the products, so you’ll be able to
see what you need to eat. Or when you don’t need to assume, you’ll be able to just order a meal plan, and you will obtain four meals for the next day in line with this
quantity of energy.

Matthieu
David: On
your web site, you might have a really long listing of partners. Why do you need companions?
What’s the hyperlink between Dragonfly and you? What’s the link between Esthete
Paris
and also you? What’s the hyperlink between Spinback and also you?

Benjamin Patin: We’ve a cross-partnership. We promote them
on our web site and in our articles. We write articles about them. They do the
similar. Typically, we give discounts to their clients, they usually give reductions to
our clients. It’s just a win-win relationship.

Matthieu David: You share the similar group, proper?

Benjamin Patin: We attempt to make their clients know that we
exist. So, we provide products to their clients after which we will reach out to
new individuals and ship for them.

Matthieu
David: Yeah,
since you share comparable communities. You wouldn’t do this with KFC, which is not your group as a result of individuals would go to
Dragonfly. Individuals would go to Z&B and others to improve their health.

Benjamin Patin: Yes. That’s proper.

Matthieu David: Okay. I see. I understand. What’s the huge
dream now? What’s the massive plan for the coming five years?

Benjamin Patin: Six months in the past, we have been like, “Okay, we
want funding. We need to go to all the acceleration and see if we will have
funding and stuff”. I had some funds, however
I had a nasty experience with it. So, we variety of
backed off utterly from that. And now
we’re specializing in…

Matthieu David: An accelerator?

Benjamin Patin: Yeah.

Matthieu David: Might you share the dangerous experience that they had
by not mentioning names? Might you share the varieties of expertise to avoid?

Benjamin Patin: So, let’s say they acquired funded ¥X,000 and
with advisors, right? So, you go to this program, they usually allow you to to make your company higher. So, they provide you
cash, after which they make it easier to to do this
and that to make a more sensible choice, better choice, and all this stuff.  What occurred is that they have been assembly with
mentors and the mentors didn’t even find out about the tasks because they discovered
so many corporations that the mentors have been so busy that they didn’t even keep in mind what firm was doing what.

So, they have been spending that point telling the mentors what
they have been complaining about. Subsequently,
it was utterly a waste of time for
them because it was a weekly assembly with new individuals, they usually never knew what the firm was doing. So, for me to have
this type of help…. okay, you get
some cash, but in case you don’t have precise input about your small business and numbers
and reflection in this, I don’t actually
see it could possibly be of any added value for us.

Matthieu David: I see.

Benjamin Patin: So, we added some family investments. Right
now, it’s tighter. We’re going to stay to that. We’re going to focus more on
creating our one retailer technique after which attempt to open one or two or three more
shops with a really low investment because
one other concept could be very low in terms of
value. And we’ll attempt to do a franchise business if it’s attainable.

Matthieu David: Franchise enterprise. Okay.

Benjamin Patin: Yeah. As in Shanghai.

Matthieu David: I see. Okay. However with franchising, how would
it be just right for you? You would offer the model. You would offer the menu. You would offer the sourcing, and the franchise would discover the location and
run it.

Benjamin Patin: Exactly. Actually,
what we try to do is that the only thing we have to do is to lease the
area, pay for the development, and hopefully we will even practice the employees in
your restaurant. You don’t need to do something. Like I stated, immediately if I’m right here
or not, the restaurant is working by itself.

Matthieu David: Okay. It might be an funding for somebody.

Benjamin Patin: Sure. Yeah.

Matthieu David: Perhaps not solely your essential business. It could possibly be an funding for someone. The sourcing
would go through you. So, you will make some cash out of the sourcing of the elements, the natural products in China.

Benjamin Patin: Sure, that’s the plan. That’s the plan of
performing some franchisee technique. Sure.

Matthieu David: Greater than paying for the
brand as a result of initially perhaps the brand won’t drive that a lot visitors, but
sourcing natural products
in China and writing the menu is an asset to run in a short time and really
simply with out excited about that.

Benjamin Patin: We noticed that in two weeks you may have the restaurant operating. So, it’s very fast. It’s a small retailer, so renovation doesn’t require much gear.
It’s all primary gear. So, in two,
three weeks, you could be operating. So, in terms of lease, it’s good as a result of often, it takes two to 3
months to utterly renovate the place.
After which it’s two months or three months of lease already with no income. So,
we are going to do one thing nice. It might take us time, however we are completely happy
with all the wrestle of the past yr. That helped us attain this point at this time
that we see we will do an awesome job and hopefully do an excellent business in that
sense.

Matthieu David: I feel you’re very cool about every part. I mean, you’re managing stress very properly.
What’s stressing you out on this restaurant business in China?

Benjamin Patin: Last yr, I used to be very careworn because we
were not breaking even with an enormous retailer. So that was demanding. At present, it’s a
small store — much less danger. We lost money
final yr. Hopefully, we will make it up quickly. It’ll take a while. However in
terms of stress, it’s much quieter than subsequent yr. It confused me. You possibly can ask
my associate. I don’t know. I’m careworn because I didn’t present it.

Matthieu David: You don’t show it.

Benjamin Patin: Yeah, in all probability.

Matthieu David: Okay. Thank you very a lot. Congrats for this
thing you probably did. I’m wanting ahead to visiting
your location or to order from your restaurant. To comply with you on WeChat
shall be simpler than the website. Thank
you very a lot for joining me on this new episode of our China enterprise podcast, China Paradigm, and I hope everybody enjoyed the speak. Thanks.

Benjamin Patin: Thank you on your time. Thank you in your
invitation to China Paradigm. See you quickly.


China paradigm is a China enterprise podcast sponsored by Daxue Consulting the place we interview successful entrepreneurs about their companies in China. You possibly can access all obtainable episodes from the China paradigm Youtube page.

Do not hesitate to succeed in out our challenge managers at [email protected] to get all answers to your questions

About the author

verifiedtasks

verifiedtasks

Sukhdev Singh is a Business management graduate, with superb managerial skills and leadership abilities. He always has an approach of “leading from the front” which keeps us all motivated and inspires us to work more efficiently. He has an incredible amount of experience in the blockchain field as he has worked with a Crypto start-up based on blockchain. His cheerful personality always lifts our spirits and always makes sure that the work at VerifiedTasks is top-notch.
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