How a coffee chain conquered Cambodia: Brown’s success story

Brown café is one of Cambodia’s most recognisable brands. As the company prepares to open its seventh and eighth stores in Phnom Penh, Emily Wight reports on the science behind its success.

It’s 10am on Monday morning and Phnom Penh’s streets are jam-packed with cars, motorbikes, tuktuks and bicycles zig-zagging each other in a desperate bid to go about their day.

Solace can be found in Street 51’s Brown. The air conditioning seems to freeze the sweat on your brow; beaming, attentive staff repeat “sousdai” at first glimpse of a potential customer, and a curious soundtrack of acoustic covers of Western pop songs, from Chris Brown to Lady Gaga, plays non threateningly in the background. For expats it offers a home from home, serving up cappuccino, espresso and lattes as well as a glorious array of sandwiches and pastries. But most of its clientele are young Cambodians.

When noting the prevalence of Brown’s outlets around Phnom Penh, the untrained eye might be forgiven for assuming it was another Western chain. But its success is very much attributable to an entrepreneurism that is wholly Cambodian.

On this hectic Monday morning, 24-year-old Paulette Phay is sheltering from the congestion outside - but she usually comes to Brown every evening. “I love to come here alone because I can relax,” she says. “It’s a very friendly environment.”

Phay, who is studying part time alongside her job as an accountant, interrupts our chat - and her Mocha Frappe with whipped cream - to take a call on her iPhone. But no matter: there are plenty of Brown customers of a similar demographic in the 51 store that morning, all of whom cite quality coffee, excellent customer service, and a relaxed environment in which to hang out with friends as attractions of the cafe.

More than half of Cambodia’s population is under the age of 25, and the country’s rapid development has instilled among them a growing desire to be independent. Among the expanding middle class, more and more young people are choosing to spend leisure time with friends. The concept of “hanging out” is becoming prevalent. Youth culture is staring Cambodia in the face.

Brown is staring right back. Four years after launching its first branch on the capital’s Street 214 in 2009, the coffee chain opened its sixth outlet, on Sothearos Boulevard, almost a month ago. The company also owns Fox wine bar next door, which has been open for just over two months. Brown is halfway through constructing a new outlet in Tuol Kork; planning on an eighth outlet that will offer a grocery, to open by the beginning of next year; it has also just opened Gong Cha, a bubble tea cafe in BKK1, which is a joint venture with a Taiwanese company. It’s expecting to open stores in Siem Reap in the near future. Over all its operations, including head office, it employs 320 people.

The brains behind Brown are five young Cambodian men, all under 30. Its co-founders are high school friends, each of whom has spent time studying abroad, and each one of them bringing a different skill-set to the table. Managing partner and co-founder Chang Bunleang is just 27 years old, and studied Education and Communications - including a Management course - in Australia. The rest of the team consists of an architect, a pastry chef, and two structural engineers.

Brown is Chang’s first business venture. On his return to Cambodia after studying, he initially went into the non-profit sector, but funding was sparse due the the global economic downturn, and he found that it didn’t pay the bills. Along with the co-founder of his non-profit, he joined up with the other three, and they pinpointed coffee as an opportunity. Chang said: “At the time, there weren’t as many coffee shops in Phnom Penh. I’d seen from Melbourne and other parts of the world that cafés are features of a modern city.”

But this opportunity wasn’t solely down to an unsaturated market. Brown’s particular line of coffee shop is, one would think, synonymous with the western world. Its standards are high: when making espresso, baristas are trained to use the hailed technique of pushing water through coffee for exactly 30 seconds. Initially, the company bought coffee beans from Italian companies Illy and Lavazza to test their popularity; it now sources from Chiang Mai in Thailand. There are numerous parts of the world in which you could plonk a café such as Brown, but no matter how hard you tried, the bitter aroma of steaming espresso and the shapes of chocolate powder on a cappuccino would alienate rather than entice.

With the popularity of iced drinks to ease the tropical climate here - which Brown, with its offerings of iced teas and coffees, frappes and smoothies, certainly recognises - you might wonder why the company bothers with hot drinks at all.

Chang said: “At first, we aimed for 50% of our target market to be expats. Not many Cambodians drink coffee, they just need a place to hang out, so at first we thought we needed a bit of time to educate them about what a cappuccino is, or what a macchiato is. After a while, though, we saw the trend kind of tilt towards the Cambodians.”

Chang pointed to a growing demand for quality, Western-style coffee among young Cambodians, using the example of those who have recently returned from studying in the West: “Lots of Cambodian students who are educated overseas are coming back, and they’ve been exposed to this kind of coffee shop. They want a place to hang out and good coffee to drink.”

Appreciation of coffee as a delicacy isn’t the only draw to Brown. According to its customers, design plays an important part in its success. Acclaimed photographer Kim Hak, drinking latte in Street 51 with his friend, put his finger on it nicely. “I feel it’s somewhere between the office and home - not really like the office, but not really home. I like the space and the architecture,” he said, before listing the wifi, air conditioning and comfortable seats as particular attractions. “The design is somewhere between warm and cold, Western and Asian,” he added.

According to Chang, Brown’s design is heavily influenced by independent cafes in the West: “We looked a lot at independent cafes in Melbourne, and I was travelling quite a lot in the US last year. I was in Portland, which they say is the coffee capital of America, Seattle, and New York, where they have very good coffee.”

He added: “The design is more or less very western - probably because our architect was trained in the US for a few years, and was also in both Denmark and Tokyo for some time. But we’ve adapted it to our market: for Cambodians, convenience is a top priority, which is why most of our stores are on a corner, so their parking spaces can accommodate up to 20 cars.”

Of course Brown isn’t operating in a vacuum. Gloria Jeans, True Coffee, and The Coffee Bean are just a handful of the cafes drawing Phnom Penh’s middle classes to the trendy BKK1 area - not to mention Costa Coffee, which imprints its unmistakable maroon stamp on the corner of 51 and 294. Costa is the second largest coffeehouse chain in the world. Express Food Group, which owns the Costa franchise here, opened in Phnom Penh last year, where it now has three outlets in the city, and one at the airport. According to Rami Sharaf, CEO of RMA Cambodia, the parent company of Express Food Group, another outlet at the Vattanac Tower is due to open in the next few months.

There is a discernable difference between Brown and Costa’s clientele. Costa, while drawing in the obvious expats and tourists, happy to see a familiar brand from back home, attracts an older Cambodian customer base than Brown. Sharaf said: “Our clientele are more businessmen, employees of companies - the age group is a little bit higher than that of other chains. The ambience of our Costa in BKK1 makes it a very convenient stop for businessmen.”

Sharaf pointed to the fact that Costa is a well established global brand. He said: “Costa is the number one coffee brand in the UK, and the leading one in Europe. We come second worldwide and we have 41 years of experience in coffee. Of course people in Cambodia recognise the brand.”

Unlike Brown, which is able to offer iced drinks to tentative customers alongside European style coffees for the more sophisticated palettes, Costa is tied down by a global company policy on what it can and can’t change. They can adapt the food - the seafood wrap is a particularly popular choice in Phnom Penh - but not the coffee itself. Sharaf said: ‘Everywhere we go - Brussels, Bangkok, London - we should provide exactly the same cup of coffee. These are the conditions of Costa worldwide. We have central preparation in the UK and it’s all imported over here. We are very insisting on no compromises with the machines we use and with the beans we import.”

Being tied down might sound risky. But more and more Cambodians are appreciating good quality coffee. And it means that expats can enjoy the tastes of back home. Sharaf added: “Because of this we get a lot of compliments from European customers, especially the British ones - finally they can have their coffee exactly like they did in London.”

Is there another coffee giant creeping towards Cambodia’s borders? Starbucks is the largest coffeehouse company in the world and has 20,891 stores in 62 countries, next to which Costa’s figures seem to pale. The multinational corporation opened its first outlet in Vietnam earlier this year, and records from July show a 30 per cent growth in the Asia-Pacific region. Starbucks isn’t yet operating in Cambodia, but go outside for 10 minutes and you’re bound to see one of Phnom Penh’s trendsetters sporting its logo on T-shirts.

Is the T-shirt an ominous sign of what’s to come? When contacted for comment, a Starbucks spokesperson said: “Starbucks will continue to accelerate our growth in the Southeast Asia region, however, at this time, we do not have any plans to enter Cambodia.”

Juveris Tenisons is the creative director at the branding and communications firm AD Communications. He is doubtful that many Cambodian people know what Starbucks is, even if they brandish its logo on their clothes, adding: “It might help Starbucks in the short term, but it would be a real struggle for Starbucks to become competitive with Brown.”

Even so, Chang said he is fully aware of the threat posed by Costa and Starbucks, and is doing all it can to prepare. Chang said: “Of course we see them as a threat to us. Logistics wise, (Starbucks) shouldn’t be here in very long - to travel from Ho Chi Minh to Phnom Penh is just six hours. A lot of customers in Asia particularly like the Starbucks brand. But it’s all the way from the US, so they’d have to be very experienced in the Cambodian market. We’re just focusing on training our staff to be ready for the competition, and on having excellent customer service.”

Tenisons believes that Brown has a firm grip on the coffee-drinking market. He said: “Many coffee shops opened just after Brown opened the first shop in BKK1, but most of them are closed already and did not succeed. Again - mostly because everyone tried to copy Brown. Other international coffee shop brands opened their shops recently and are trying to get a piece of the coffee drinking audience. It will be hard unless they create really strong added value.”

He added: “Brown took many good ideas from internationally successful coffee shops and adapted them into a local brand that knows what the growing middle class wants, and it works very well in Cambodia. They created the trend.”

What of the name “Brown”? It seems so… well, English. But translated into Khmer, it’s “t’not” - also the name of Cambodia’s beloved national sugar palm tree. Rather like the coffee shops themselves, it’s a catchy name for the expats to remember - all the while remaining deceptively Cambodian.

Sourced: The Phnom Penh Post