Singapore-based Keith Tan is the CEO and founder of Crown Digital IO, whose smart cafés pioneered the revolutionary robotic barista, ELLA. A wealth manager turned entrepreneur and self-professed “digitalization evangelist”, Tan’s passion for good coffee and interest in technology meant that Crown Coffee’s journey to success (last month, the company signed its first major, cross-border deal with JR East Business Development SEA Pte. Ltd, a subsidiary of East Japan Railway Company), has been meteoric since 2016.
How did you get into hospitality?
In 2015, I was in finance, working for a multi-family office. I was 35 and had just got married. I thought to myself, I could take some risks: I want to be an entrepreneur and I want to have a story to tell, just like all the entrepreneur customers that I support. So, I started my company, Crown Coffee, because I’m into hosting and looking after clients. And I love coffee. It started off as a very small cafe in the middle of industrial estate in Lavender Street, Singapore. I didn’t realize that I was right smack in the middle of a lot of tech companies.
Very quickly, in my first six months of business, I was given a chance to open up a second outlet in the DHL Innovation Center. I was exposed to a lot of technologies there. They had the first collaborative robots there. I thought, ‘Wow, this is cool’. Everyone was talking about digital transformation and the Internet of Things (IoT). That was the buzzword back then.
As I scaled the business, I faced a lot of challenges in running a traditional coffee business. I told myself, ‘Gosh, I missed the boat because I’m in coffee and the world’s going digital. That’s the future, right? But I told myself ‘if I could get on to the digital wave I would do it in a heartbeat. If there’s a chance I’ll have to pivot’.
How did you manage the growth?
We had four locations, but we faced a lot of challenges with manpower. F&B is hard. It’s long hours and it’s hard to train and retain. We started hosting a lot of IoT workshops in the café. I was exposed to it and thought, ‘We should use digital technologies to turn this into a ‘smart café’ because food is so old school. There’s got to be a better way’.
Next to our fourth outlet café, was Intel. One day, I just walked up to them while they were enjoying our coffee and said, ‘Hey, guys, we’re going to go into technology now. One of the ladies happened to be the APAC marketing manager. She said, ‘Keith, your story is amazing. I’m going to connect you with our Internet of Things group’. They introduced me to their ecosystem partners. Today, we are a go-to market-ready, solution provider partner of Intel. They helped me with my first proof of concept to solve my manpower challenge. They introduced hardware vendors and that took off.
What were the key milestones once ELLA had been prototyped?
The first customers were Alibaba and Marina Bay Sands convention center. That opened up new opportunities for us. We got paid to do coffee for events. And that’s the most challenging, because you have thousands of people having coffee at the same time. We refined our solution a lot over time. The milestone was when we did the Standard Chartered Marathon. They had 50,000 people coming in that day, to pick up their running packs. We did 2,000 cups of coffee in the day, non-stop for 10 hours.
Within a very short period of time we have been to over 40 events around the world. Intel brought us to Sydney for its Partner Connect event. In Australia, they are coffee snobs, and they loved it. Then we went to Hong Kong, New York, and the GITEX 2020 show in Dubai. ELLA has been around the world.
What are the real benefits ELLA delivers?
ELLA brings real value. She’s fast, compact and makes a great coffee consistently and unmanned. ELLA solves four traditional retail problems: high rental, because Ella is now really small and she can fit into retail spaces where you can’t run a café; we save on manpower with automation; we save on the cost of training, retraining and hiring staff; then you have inconsistency in quality.
What other opportunities have seen you grow the business?
I met with the Japan External Trade Organization (JETRO). Their job is to bring tech companies into Japan. JETRO said, ‘East Japan railway has an office in Singapore and had the concessions to build the new Thomson East line – they have a joint venture with the local train operator’. They connected us, their CEO loved ELLA, and told us, ‘We have a mandate to refresh our train stations and a 20-year plan to incorporate AI and robotics into our train stations – this is fully aligned to our future plans. We got to invest in your company and grow with you’.
We concluded investment in December. They came in at the holdings level. We span off Crown Coffee as a retail brand, Crown Digital does all the digitalization work. The plan is to bring us to Japan and scale up into their 1,700 train stations. They have 17 million passengers on a daily basis. They own about 168 shopping malls and 40 commercial buildings. They are one of the largest landlords in Japan.
So, the next plan is to execute our 30 locations in Singapore, then enter Japan by June, test marketing in time for the Tokyo Olympics.
What new innovation and investment are you working on?
ELLA has a mobile app – you can pre order your coffee on your phone, ELLA prepares it and when you arrive, you scan your QR code and collect your coffee. It’s contactless, so a very seamless online/offline experience. With a pandemic [and the need for] social distancing, contactless has become important.
We are going into the public attractions, like the Wildlife Reserve in Singapore, and we have corporates with thousands of employees who want the solution in their building. Our relationship with Standard Chartered has blossomed. They’ve ordered an ELLA, she’s going to be deployed to serve their 4,000 staff.
We met with oil companies in Dubai. They want to revamp their petrol stations and see contactless and automation as part of the future. Besides transport hub, you have hospitals, that are running 24/7, they could use ELLA.
What does the future for this technology look like?
I think we are just at the very beginning of robotics, AI and automation in food. This is a starting point – just doing coffee and tea – that will continue to evolve and innovate. We have a collaboration with Olam to do the traceability, transparency and provenance of the raw materials. We’re pushing out for a very nice sustainability story whereby you can buy a cup of coffee or chocolate from us and trace it back to the farm, to see exactly who’s impacted. Consumers today want to know who’s getting paid for the work – we can do that, showing the whole journey. There’s no turning back. With the pandemic, the world is moving forward very quickly into e-commerce and digitalization. Those companies that can’t evolve or adapt will be out of business. With the ‘new normal’, a lot of people are now looking at these solutions. Once you go digital, you can predict inventory, an optimize the supply chain, and understand consumer preference for more customization.
It’s a no brainer. Once you get into [digitalization] there’s no turning back. The world’s out there for the people who dare to innovate, and then to seize the market.
Digital kitchen management