A healthy start for overseas investors

In recent years, eating healthier foods has become increasingly popular and the UK public, in particular, has increasingly been on the lookout for new and exciting ‘healthy food’ concepts. One company that is hoping to turn the growing trend for healthy eating into a thriving chain of restaurants in the UK is Glo Group/Nature Food.

Glo Group is based out of Hong Kong, where it specialises in food related products.

In 2003, the company decided to expand abroad, by investing and building out a chain of outlets in Europe, opening their first ‘pilot shop’ in the UK, and started the Glo Rice and Noodle Café brand.

Spotting a good market opportunity

“Global tastes in food are changing at the moment,” explains Johnson Chen, chairman of Glo Group. “Just a few years ago, very few people were eating sushi, or thai and vietnamese food; today, these are very popular.

We saw that there was a high demand for these types of oriental food, and recognised that there was an opportunity in the market to build a good rice and noodle chain, which offers a healthier and more exciting alternative to the usual high street fare.”

Before they decided to open in the UK, Glo Group also explored other culturally diverse cities, including New York, Frankfurt and Amsterdam, where they thought their concept would work well.

Searching for the right location

“We were looking for somewhere where it would be easy to do business; and where we’d be familiar with the language and legal and accounting structures,” says Chen.

“In the end, we chose the UK primarily because we had a language in common, and because coming from Hong Kong, we were very familiar with the English legal and accounting systems.”

As part of their research process, Glo Group contacted the British Consulate General in Hong Kong, who put them in touch with UK Trade & Investment.

“We were looking for somewhere where it would be easy to do business”

Talking to the right people

“Initially, UK Trade & Investment helped us by giving us contacts to ThinkLondon, the region’s main development agency, as well as a few other relevant agencies and organisations within the UK,” says Chen. “This helped to point us in the right direction, and to start talking to the right people.

“For example, as a consumerorientated business, we needed to find restaurant locations that had the right sort of customer profile and foot traffic. So we had to find the right specialists to help us identify the right sites for our shops. UK Trade & Investment did help to save time in finding the right people and resources we needed in the early stages.”

A steep learning curve

The first Glo Rice and Noodle Café opened its doors in Paternoster Square, London, in 2004. Subsequently, the company has also opened a branch in St Mary Axe, London, and is in the process of opening a third restaurant in the Festival Place Shopping Mall, in Basingstoke.

But it hasn’t all been plain sailing. Like many businesses looking to expand abroad, Glo Group had a very steep learning curve. “We had a couple of surprises along the way,” says Chen.

“UK Trade & Investment helped to point us in the right direction, to start talking to the right people”

“Firstly, we were very surprised at how long it can take to acquire and sign on a new shop lease. In Asia, landlords are very eager to hand over the keys and start collecting rent, but in the UK, it doesn’t work that way.”

It also took the company some time to really understand what their British customers were really looking for, and to match their products accordingly. “UK Trade & Investment gave us some profile data on the spending patterns, so that we’d have a rough idea about British tastes and preferences before we started, but it still took us a long while to really perfect our offering here. In fact, we had to go through three iterations before finding it.”

Building a strong “Glo” brand in the UK

With all the teething problems worked out, Glo Group is now planning to open a number of additional shops. “By 2008, we hope to open another 13 restaurants,” says Chen. “We’ve built up a strong ‘Glo’ brand in the UK over the last three years, and now we want to build on this foundation to develop more outlets throughout the UK. Then, we want to use the UK as our main base of operations, to try and expand the chain into Europe.”

Does Chen have any advice for other companies, hoping to break into the UK market from abroad? “Don’t rush your pre-planning and research,” says Chen. “Time spent in pre-planning your entry into the UK will really pay off in the longer run.”

Sector focus

• Food and drink account for about 4 per cent of all UK exports, and is continuing to rise strongly.

• The food and drink industry is the UK’s largest manufacturing sector. With sales of £73.7 billion, it accounts for 14.2 per cent of all manufacturing gross value added.

• Almost 7,000 food and drink companies employ 417,000 people – 13.9 per cent of the manufacturing workforce.

• In 2005, consumers spent £153.82 billion on food, drink and catering services – 20.6 per cent of total household spending.

• UK consumers are increasingly health aware, encouraged by media coverage and government healthy eating campaigns. There is a strong trend towards organic food, which is becoming more widely available, and also rapid growth in low fat, healthy options, allergy related and nutraceutical products.

• Britons are increasingly reluctant to cook for themselves, and sales of restaurant and takeaway food continue to grow.

• Spending on catering services grew 5.7 per cent, passing the £75 billion mark in 2005 – almost half of total food and drink expenditure.

• For catering services, too, the trend is towards healthier eating.

Did you know?

The UK Government wants the food industry to be promoted as an employer of choice, helping to boost the standard of workforce training through the national network of Centres of Vocational Excellence (CoVEs).

More than 40 Centres of Vocational Excellence now cover food technology, manufacturing, hospitality and catering, and part of their role is to encourage more industry involvement in the development of skills training.

The UK is providing an ideal gateway to the large EU market, which has broadly uniform regulatory requirements when it comes to food and drink.