In stark comparison to mass-market fare that dominated in previous decades, Asia’s F&B retail sector has evolved throughout the years with the addition of homegrown, gourmet and upmarket brands differentiated by artisanal methods of product creation and a focus on premium ingredients.
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One such brand that has gained momentum in Asia is Venchi, a luxury confectionery company that originated in Turin, Italy, more than 140 years ago. Purveying hazelnut or nut-based chocolate and gelato with no colourings, chemicals, thickeners and other chemically derived ingredients, Venchi – no stranger to those who have travelled to Italy – established its regional headquarters in Hong Kong in 2007 to pave the way for its Asia expansion.
When Venchi opened its first store in Hong Kong in 2011, business “grew by word of mouth,” says Venchi’s CEO for Asia-Pacific, Marco Galimberti, who relocated to Asia in 2017 to lead the brand’s expansion in the region.
At the time, he says, Venchi’s sales were driven by personal consumption of chocolate connoisseurs, though gifting has since become a formidable growth driver thanks to numerous local festivities in Asia.
Today, Venchi has almost 100 stores across Asia – in Hong Kong, Shanghai, Beijing, Singapore, Sydney, Taipei, and Tokyo.
Premium F&B retail brands such as Venchi have boosted stability for commercial real estate – especially in a post-pandemic era of consumption.
“F&B does remain a key traffic builder even post pandemic – it’s one of the main reasons for customers to consume out of home,” Galimberti says. “This is the reason we can observe more developers upgrading their malls with more premium offerings, not only with wider options of light refreshment but also with new concepts of restaurant and cafés.”
Regional expansion underway
Venchi is set to focus on expanding across Southeast Asia.
“Singapore, Malaysia, Indonesia, and Australia, are the countries where we expect the majority of openings happening in the next few years,” Galimberti says. “We’re landing soon in the Philippines as well – the emerging market that has surprised me the most in terms of retail landscape.”
“South East Asia – specifically the first stores in Singapore – quickly gave us insight into consumer preferences for this type of gourmet product. With Venchi’s support and our agility as a business, we were able to deliver on the brand’s promise as well as swiftly respond to local desires in terms of consumption habits. We look forward to our upcoming launch in Malaysia,” added Nelly Ngadiman, managing director, Bluebell South East Asia & Australia.
In November, Venchi is set to open its first physical store in Malaysia, located in Pavilion Kuala Lumpur, to be followed by another store at TRX in Kuala Lumpur. The Bluebell Group is Venchi’s partner in Singapore, Malaysia, Taiwan and Australia.
As well as Southeast Asia, in mainland China, where Venchi now has 45 stores, Galimberti says the plan is to continue to strengthen Venchi’s presence through new cities, marketing activities, and existing store upgrades.
“We will continue to expand Taiwan as well, which is another potential sizable market for us, together with Japan, the second most important market for confectionery after the US,” Galimberti says.
“Taiwan has proven to be a very strong market for the brand. In the first month of opening our first store at Mitsukoshi A11’s ground floor in December 2020, we sold a total of 6,134 ice cream cones – this was a testament to the brand’s strong promise and product quality. By the end of 2023, Venchi will have seven stores in Taiwan and one local e-commerce site with new exciting projects next year to answer local demand in different cities and consumers enjoying the products for themselves, and also for seasonal gifting,” says Samy Redjeb, managing director, Bluebell Greater China.
Venchi’s latest store in Taiwan opened in early September.
Keys to success
Challenges are common for F&B retail players, but even wider opportunities are on the horizon. “F&B is expected to gain more and more traction in the coming years from a real estate perspective, therefore we need to continue pursuing our store concept innovation path, and continue investing in elevating our customer experience together with our digital capabilities in order to reach our customers beyond our offline stores,” Galimberti says.
With Asian consumers’ growing consciousness for health and wellbeing also comes a demand for higher-quality products. “We’ve definitely seen a shift in the premium confectionery and premium artisanal gelato market post pandemic, due to a higher health awareness of consumers who tend to prefer to buy less in quantity but who have developed stronger preference for quality products,” says Galimberti.
To this end, Galimberti says Venchi has devoted its efforts to developing ‘zero added sugar’ and ‘lower sugar’ ranges, though its range of dark chocolates or hazelnut-based chocolates – often naturally vegan and with less sugar – has already given Venchi a competitive edge, in terms of assortment.
“The premium segment of these two markets – chocolate and gelato – are recording higher levels of growth in percentage versus the traditional segment, or mass-market confectionery, which is still very much sugar dependent,” Galimberti adds. “Remaining true to our values of delivering truly good products that make you feel good – and not guilty – has been probably the key factor that helped build our reputation and customer’s loyalty.”
Consistency is essential
According to Galimberti, consistency has played a crucial role in Venchi’s success in the region, and local initiatives for Venchi have been carefully curated. Launching in time for Chinese Valentine’s Day, its latest campaign in mainland China, for instance, features a collaboration with Valentino, another Italian legacy brand.
“We’ve brought to the rest of the world the same customer experience we delivered in Italy, avoiding excessive localisation work. We believe this is the way to protect and preserve the brand equity and guarantee that the product you will enjoy in Rome will be the same one you will enjoy in Tokyo, Sanya, or Jakarta,” he says.
“Consumers wish to have authentic experiences – and tend to be increasingly sceptical of distortions or fake localisation. We’ve chosen to be an authentic Italian lifestyle brand and decided to focus on what we do well: high-quality chocolates, in all forms, and artisanal gelato, made fresh, every day.”
Retail in Asia is part of the Bluebell Group.