The story of Bengawan Solo

Bengawan Solo is one of Singapore’s most successful bakery chains, having built its reputation on the quality of its popular nonya-style cakes and pastries. Founded by Anastasia Tjendri-Liew in 1979, the company has grown from a single shop to a chain of over 40 outlets, with a turnover of S$43 million in 2008.

Background
In 1970, company founder Anastasia Tjendri-Liew moved from her hometown of Palembang in Indonesia to Singapore. Marrying accountant Johnson Liew in 1973, she turned her keen interest in baking and cooking into a home business two years later by producing butter and chiffon cakes from the kitchen of her four-room flat in Marine Parade. Tjendri-Liew sold her products by word-of-mouth, and they proved so popular that she eventually started supplying them to shops.

However, she did not have a food-manufacturing license, and was told by government officials to shut down the home operation in 1979. The demand for her products continued and a few months later, Tjendri-Liew opened a shop at Marine Terrace. As the previous tenants had not done well, she was able to obtain a low rent of S$1,200, and named the shop Bengawan Solo after an Indonesian folk song. Her cakes and traditional Southeast Asian kueh remained popular, with demand increasing significantly after a positive newspaper review.

Expansion
Customers urged Tjendri-Liew to open another shop in a more central location, and a second outlet at the Centrepoint shopping mall on Orchard Road opened in 1983. By 1987, the company had five outlets and required a central kitchen, which was opened on a 9,500 square foot plot at Harvey Road. Bengawan Solo’s utilisation of a central kitchen was a first for Singapore’s confectionery industry, and the move drew much media attention, as well as paving the way for other bakeries to do likewise. Sales grew to around S$8 million in 1991.

Having grown to 25 outlets by 1997, Bengawan Solo shifted central kitchen operations to a larger, S$6 million factory in Woodlands. Business continued to thrive, and in 2000 the company’s turnover was close to S$30 million. Within a few years of the opening of the Woodlands factory, the company found that it needed more manufacturing capacity, and explored the possibility of opening factories in neighbouring countries.

Bengawan Solo’s rise was reflected by its entry into the Enterprise 50 list of Singapore’s top privately held companies. In 1998, the Association of Small and Medium-sized Enterprises named Tjendri-Liew the first recipient of the Woman Entrepreneur of the Year award. According to Tjendri-Liew, over the years Bengawan Solo has attracted offers to buy out the business, but she has declined all bids as Bengawan Solo was her “baby”.

Johnson Liew joined Bengawan Solo as the company’s accounts director in the early stages of its development. After 2000, their son Henry Liew also joined the company, working in the area of business development. His vision for the company included expanding the business overseas and developing it into an international brand, improving production and operations, and introducing promotions such as cake vouchers, while maintaining Bengawan Solo’s traditional customer base. The company also began experimenting with new cakes and kueh offering an innovative take on traditional recipes, new desserts and café-bakery style outlets.

In 2006, Bengawan Solo’s sales turnover was S$36 million, continuing a trend of annual growth of around 10% to 15% each year over the previous decade. A second factory in Woodlands was built at a cost of S$5.2 million, and its opening in 2009 doubled the company’s production capacity.

Plans to expand Bengawan Solo overseas have been discussed since 2003, but the company has preferred to take its time to research markets, think through production issues and quality control, and test responses at overseas trade fairs. With the majority of its customers at Singapore stores comprising tourists, in particular from Hong Kong, Japan and Malaysia, Bengawan Solo is focusing on these countries for its first steps abroad. With a good record of continued profitability and no debts or bank borrowings, the Liew family has expressed its desire for Bengawan Solo to become an internationally renowned brand while remaining a privately held family business.

Business philosophy
Having built its reputation as a maker of high-quality cakes and kueh, Bengawan Solo has sought to maintain its market position by following Tjendri-Liew’s business philosophy of maintaining rigorous standards in production and using premium ingredients. When customer feedback reported a slight dip in the quality of its products following a major expansion of outlets in the 1990s, Tjendri-Liew personally investigated the manufacturing and operational processes and instituted a standards system. She continues to gather customer feedback from outlets and conduct daily inspection rounds at the company’s factories.

Most of Bengawan Solo’s range of over 50 different types of cakes and kueh retain a handmade element to maintain a traditional taste. However, the company has employed technology where possible to improve the production process. For example, Japanese encrusting technology is used to ensure consistent crusts on its pineapple tarts, and air-mixers and depositors are utilised for sponge cakes. Custom-made revolving ovens and a rotating-steaming conveyor system were also installed for kueh lapis and kueh salat respectively.

While the company has built its reputation for quality, marketing efforts have also focused on tie-ups with family-oriented companies, shopping centres, credit card companies and banks for offers and packages. Festive periods have traditionally brought increased business, and Bengawan Solo has capitalised on this with festive season and occasion-specific products and marketing. Customised cakes and cakes featuring licensed characters such as those from Disney have also formed a large portion of the company’s business.

Author
Alvin Chua