Fruitful transition: Hey! Chips’ strategic switch to domestic market yields increased sales, rising brand awareness
Despite a “general growth in revenue”, Hey! Chips has undergone pivotal changes in business strategy since FoodNavigator-Asia first spoke to the brand last year.
Specifically, it has scaled back on overseas expansion and channelled its resources to grooming the brand in the domestic market, which has met with significant success, according to founder Emily Chu.
Beyond online channels, the brand’s fruit- and vegetable chips are now available in major supermarket chains including FairPrice Finest, Cold Storage and CS Fresh, as well as specialty grocers like Little Farms.
“It requires a lot of funding to grow a brand overseas through marketing activities and having a team stationed there. In 2023, we decided to really focus on the local market, where our manpower is and where we saw untapped opportunities.
“Over the course of the year, we found that Singapore, whom we thought were ‘too small’ to invest heavily in, is in fact a very profitable market after growing our brand to a certain level. Now that we have entered the supermarkets and by being a lot more visible to local consumers, there have been many unexpected spinoffs,” Chu told us.
These spinoffs include being approached by Singapore Airport Terminal Services (SATS) and other firms to develop menu dishes, such as desserts, using its chips as ingredients and garnishes.
With a continued focus on the local market, Hey! Chips has been actively participating in pop-up events and trade shows this year.
“Market research data doesn’t tell you that such a small market can actually consume so many chips. After doing all the pop-ups, we observed that our brand recall among consumers was on the rise.
“Most people who come to our booth no longer ask what we do. Instead, they say, ‘oh, we can get a better deal here’ because they have been buying our chips. So, it’s different from before. I don’t think we can fully replace traditional potato chips, but I think healthy eaters, who are our primary target audience, are definitely becoming more aware of better-for-you snacks and are increasingly looking for them.”
Another area that Hey! Chips has fruitfully ventured into is supplying to company pantries, which makes up one-quarter of its total revenue.
A range of “minis” has been created to cater to these corporate clients. Although they are available for purchase in bundles on e-commerce platform Shopee, Chu said that these smaller packs are primarily produced to serve its B2B customers.
Battling competition
While success is sweet, it also breeds competition, as Chu has noticed an increasing number of healthy snack brands entering the market and fighting for a slice of the pie.
“When we were still trying to build our brand just a year ago, the buyers from supermarkets didn’t know where to place us on the shelves. We could be in the healthy snacks or the free-from section; we can’t be in the organic section because we don’t have the certification, neither are we strictly for babies and kids.
“We’ve always had this debate on positioning as we are a trailblazer in this new category, which is in between everything. Then, we started seeing competitors coming onto the same shelves. We are now also available in some pharmacies, and even there, we are seeing one or two new brands entering. This year, the competition has been much stiffer.”
To thrive in this market environment, Hey! Chips has adopted the main strategy of increasing visibility on the shelves through marketing activations, such as sampling events.
“In places where we see greater competition for shelf space, we will put in more marketing efforts. For example, we will go to a supermarket in that particular neighbourhood to do sampling events, which places us in a more prominent location in the store.
“Sampling events aren’t for a quick win or a huge boost in revenue. What we realised is that a good shelf space gives us a lot more visibility in the long run. It’s like a physical advertisement. When people see our brand everywhere for long enough, it will really stick with them,” Chu shared.
NPD goals
Asked on her target for next year, Chu revealed that she hopes to add a “whole new collection” into the brand’s line-up.
“It’s likely going to be seed- and bean-based protein chips, but we are still looking at how to formulate the flavouring without losing our brand ethos, which is all about not putting in chemicals. Protein chips in the market right now are filled with ultra-processed ingredients, so the most important thing for us is to crack the formulation code.
“Many existing flavourings have a long list of ingredients. If we make protein chips with broccoli flavour — our all-time bestselling flavour — I will want to use our own broccoli chips. But how can we bind them together without chemicals? These are very scientific questions that we have to answer.”
As such, Chu expects the development process to “take a bit of time” before the new product can be made commercially viable.
“We started thinking about it three to four months ago. I foresee it will come out in probably a year’s time. Our factory is capable of producing protein chips; it’s just the flavouring that requires more time to study because we are developing something that is not in the supply chain.”
