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All photos by Euromonitor International
The specialist coffee shop segment has grown to become highly popular in many Asia Pacific markets, as young, urban consumers are attracted to their indulgent baked goods, hot coffee or tea, and social atmosphere. This has meant rapid growth in the region for specialist coffee shops as a category, at 14% value growth in 2013, but it has also led to fierce competition particularly in premium locations.
This competition has led to a need to differentiate, causing operators to think beyond the Starbucks-led coffee and espresso model and find different ways to pair the third-place benefits of modern coffee shops with various cuisines and concepts. One such resulting trend is the rise of the French bakery café, a niche that has gained popularity in higher-income markets such as South Korea and Singapore. These outlets pair the premium atmosphere and sleek, modern décor of a specialist coffee shop with the menu and service model of a more traditional café, offering consumers a more luxurious drinking and snacking experience that serves a wider variety of dining occasions. Paul bakery exemplifies this trend, combining a traditional French ambience with more modern amenities that appeals to high-income locals, European expats and tourists alike. Euromonitor visited an outlet in Singapore to get a better sense of the format’s key benefits and appeal:
Counter to the modern, often minimalist décor of some specialist coffee shop chains, Paul bakery outlets are cozy and luxurious, with French-themed décor. Singapore outlets have floor-to-ceiling curtains, upholstered chairs and fixtures accented with gold trim. Outlets are designed to invite dine-in traffic in addition to serving takeaway traffic when necessary, serving a broad range of social and convenience-based occasions.
This French theme also lends credibility to the concept’s positioning, which is that of an artisan bakery. The chain’s far-reaching roots in France (its origins trace back to a single family-owned restaurant in the late 1800s) further bolster this image. All of this combines to offer customers what is perceived to be an authentic French bakery experience, something that is highly appealing to Singaporean consumers who are seeing their disposable incomes rise and looking to splurge on premium foodservice purchases.
Paul is not the only one cashing in on this trend, however, and other modern, premium cafes are also rising in popularity. The common theme among these is Western-style positioning and indulgent Western food, such as waffles, sandwiches, pastries, cakes, coffee and tea.
Beyond the food and décor, Paul bakery targets young, high-income consumers who are looking for venues in which to socialize. Like specialist coffee shops, Paul offers customers somewhere they can meet with friends, conduct business, or spend time alone to study or relax; however, in addition to offering the coffee and tea that serves as the foundation to these kinds of get-togethers, Paul serves desserts, snacks, and even small meals so as to address the full spectrum of social dining occasions.
Paul bakery outlet locations also help to maximise this social appeal: Many local outlets—including the one visited—are located within popular, premium shopping malls. These locations allow the chain to tap into the mall’s semi-captive, high-income population, offering them a place to gather for drinks or snacks between purchases.
Paul bakery serves coffee, tea, espresso, desserts, sweet and savoury pastries, omelettes, and even seafood and beef-based dishes for lunch or dinner. This broad menu allows the chain to set itself apart from the many specialist coffee and tea shops already operating within many key Asia Pacific markets, and it also allows individual outlet operators to tailor their offerings to best fit with their core customer demands. For example, some outlets in Singapore serve heavier breakfast and lunch traffic due to locations nearby business districts, while others in more residential locations more prominently feature dinner selections.
Paul bakery is part of a larger trend toward dessert bakeries in Singapore, and across Asia Pacific as a whole. Many of these outlets, which combine specialist coffee shop positioning with broader menus often build around a themed concept like fruit, pastry or ice cream, are designed to carve out a new niche in a lucrative and fast-growing but competitive category. In Singapore alone, French bakeries have become a niche category of their own, which includes such competitors as Maison Kayser and Tiong Bahru Bakery. Both concepts sell French pastries, coffee and tea, and are perceived by consumers to have an authentic credibility due to their involvement with locally known French bakers Eric Kayser and Gontran Cherrier, respectively.
However, they’re also part of an even broader global trend toward a wider variety of casual, social dining concepts that serve a variety of cuisines. This has been suggested by diversification in the specialist coffee shop category, but also by rapid growth in the fast-casual dining segment and the blurring of category definitions in many developed markets, as operators in all manner of quick-service formats seek to expand their occasions and poach traffic from other categories. Above all, such chains speak to a growing desire among consumers in many global markets to seek out premium, social dining environments where they can choose to eat, drink, socialize or simply relax. While once such traffic was tied specifically to a foundation in coffee or tea, the popularity of bakeries like Paul show this could be changing, opening up opportunities for an even wider variety of concepts to vie for this growing demand over the long term.