Chinese New Year: Sellers of barbecued pork slices keep prices steady by absorbing costs

Key Concepts

• Bak Kwa: Chinese barbecued pork slice, a popular Chinese New Year treat.
• Supply Chain Disruption: Unexpected events (like the fire) impacting production and delivery.
• Cost Absorption: Businesses maintaining prices despite increased expenses.
• Operational Efficiency: Improving processes to mitigate rising costs.
• Sustainable Packaging: Shifting towards reusable and eco-friendly packaging options.
• Retail Innovation: Utilizing strategies like blind boxes to drive sales.

Century Bakwa Fire & Production Halt

A fire broke out at Century Bakwa’s Little India kitchen approximately two days before Chinese New Year, at around 11:40 a.m. The Singapore Civil Defense Force (SCDF) extinguished the blaze using water jets and hose reels. The fire originated in the exhaust system and spread to the second floor. One chef sustained burn injuries to his hand. Century Bakwa anticipates a one to two-day delay in deliveries while they work to resume production. The kitchen is currently cordoned off at the intersection of Dunlop Street and Parak Road.

Record Sales & Cost Management at Century Bakwa

Despite the fire, Century Bakwa reported a record season, selling over 21,000 kg of bak kwa – a 30% increase compared to last year’s sales. The company has strategically absorbed rising costs to maintain stable prices for consumers. A key ingredient, Spanish pork, has increased in price by 15%, now costing approximately $50 per kilogram. The owner attributed their ability to maintain prices to investments in skilled manpower and improved operational efficiency. Specifically, they transitioned from manual, small-batch production to a faster process facilitated by a more skilled workforce. As stated by the owner, “last time it used to be like…playing, you know, and then mixing small quantities and things like that. But then now that we we have more skilled manpower, we invest in um people. Then the production has been faster.”

Price Adjustments & Packaging Innovations at Being Hyang

Being Hyang, another bak kwa retailer in Chinatown, implemented a different strategy. They increased prices by $2 per kilogram just prior to the peak in sales to offset increased labor costs. This adjustment was made as sales began to surge leading up to the festivities.

Being Hyang also focused on packaging innovation. They replaced traditional, bulky hampers with reusable gift boxes designed as trunks. These trunks were sold out by mid-January due to high demand from corporate orders. The shift was motivated by a desire for more sustainable and stylish packaging. As described, “The traditional hampers is like the very big, the old school kind. There's a lot of packaging, but this year we wanted to make it more reusable, more stylish. So, we introduced them in the form of trunks. So, these trunks are reusable. So, it looks very uh classy and then uh it's very value for money.”

Retail Strategy: Blind Boxes

On the retail side, Being Hyang introduced “blind boxes,” which proved to be highly popular and quickly sold out at most outlets. This strategy appears to have been successful in driving consumer engagement and sales.

Connecting the Strategies

The report highlights two distinct approaches to navigating rising costs and increased demand during the Chinese New Year season. Century Bakwa prioritized cost absorption through operational improvements and workforce investment, while Being Hyang opted for a modest price increase and focused on value-added packaging and innovative retail strategies. Both companies experienced strong sales, demonstrating the viability of different business models within the same market.

Conclusion

The Chinese New Year bak kwa market demonstrates resilience despite economic pressures. While Century Bakwa faced a significant disruption due to a fire, both companies showcased adaptability – Century Bakwa through operational efficiency and Being Hyang through pricing and packaging innovation – to capitalize on the seasonal demand. The success of both strategies underscores the importance of responding to market conditions with proactive and customer-focused solutions.