TOKYO — Pace Development Corporation is gearing up to open 500 more outlets globally of Dean & Deluca, the New York-based gourmet grocery store and café chain it acquired last year, as it foresees bright prospects in the specialty food industry.
The SET-listed luxury property developer is confident Dean & Deluca will generate 3.3 billion baht in revenue this year.
Pace chief executive officer Sorapoj Techakraisri targets to open 500 new Dean & Deluca outlet worldwide.
Pace chief executive officer Sorapoj Techakraisri said the company's residential property development had a backlog worth 14 billion baht at present and part of its revenue would be set aside for Dean & Deluca store expansion.
Under the expansion plan, Pace will open 500 Dean & Deluca stores worldwide, adding to the current 44 stores in seven countries, including Thailand, Japan, Kuwait, South Korea, Singapore, and the Philippines.
There are two types of Dean & Deluca stores — those owned by Pace and licensed stores. Of the total stores today, 11 stores in the US and four in Thailand are owned by Pace, while the rest pay royalty fees to it.
"Expansion through licensing is our focus. We plan to increase the number of Dean & Deluca licences throughout Asia, Australia and Europe, as well as Central and South Africa, where the demand for a gourmet food brand is high,’’ Mr Surapoj said during a press conference in Tokyo on June 5.
He believes Dean & Deluca had huge room to grow both in the US and overseas due to its strong brand, as well as premuium food products, coffee and cooking ingredients.
"Dean & Deluca is in a unique segment. It is positioned between fast-food and high-end food and beverages segments. Our market research showed the segment has potential to grow. As customers become increasingly selective and demand diverse lifestyles, they are looking for a trendy and high-quality restaurant,’’ said the 37-year-old executive.
Dean & Deluca stores are mainly operated in the specialty café and market formats. In expanding the chain, Pace will focus on the specialty café format. Due to its small size and relatively smaller investment, the café could be rapidly expanded while generating high returns, said the property developer-cum-gourmet food operator.
Stores operated under the specialty café format require operating space of only 100-300 square metres each, much smaller than 700-1,000 sq m of each market format.
A specialty café requires investment capital between US$350,000 to $1 million (11.78 million to 33.66 million baht), while about $2-3 million (67.34 million to 101 million baht) is needed for each specialty market, he said.
Investment in the specialty café format could break even in three years, he said.
In addition to the store expansion plan, Pace planned to list the Dean & Deluca business on the US stock exchange within three years.
Mr Surapoj said revenue from the gourmet business was more sustainable than that from property developments. He believes income from Dean & Deluca would exceed property revenue in the long run.
Pace entered into an agreement for the acquisition of the American premier gourmet food brand, including the supply chain and operations of 11 outlets in the US as well as its global business, and assets for $140 million (4.55 billion baht) from Dean & Deluca Holdings Inc in the US last year.
Jiro Nakai sets to add at least five Dean & Deluca outlets in Japan each year.
Dean & Deluca (Thailand) currently operates four branches under Pace-owned investment and will open its fifth store at Emquatier in the next few months.
Jiro Nakai, general manager of Dean & Deluca (Japan) Co’s market department, said the New York-themed café outlets were warmly received in Japan.
Shinjuku-based Dean & Deluca speciality café attracted an average of 1,787 visitors a day, said Mr Nakai, who oversees 21 licensed outlets in Japan.
Most customers were businesspeople, office employees and foreign expatriates.
Dean & Deluca stores in Japan mainly operate in the specialty café format situated in subway or prime business locations.
The company has set a target to expand four to five stores in the specialty café format and one store in the specialty market format a year, said Mr Nakai during a press interview.