How Famous Amos Battles The COVID-19 Crisis Despite Falling Revenue
The very image and taste of traditional chocolate chip cookie The famous Amos has become synonymous with the crunchy delicacies it peddles.
In fact, when a Malaysian woman claimed to have cracked the secret Famous Amos recipe earlier this year, the internet went completely crazy.
The company remains unperturbed, however.
“Attempts by bakers to crack the recipe are welcome,” says David Chan, director of Famous Amos Singapore. “Imitation is the most sincere of flattery.”
The brand name has even been used as a political satire to sum up the praise of local politician Jamus Lim in the GE 2020 elections, by coining the term “Famous Jamus”.
Singapore outlets hold up
The famous Amos is so famous (pun intended) that it sort of took a back seat as one of those brands that you think half-exist as natural features of local geography like McDonald’s or 7 -Eleven.
It is in part because of its iconic status that Famous Amos is able to withstand pandemics like COVID-19 without trembling.
“The famous Amos has certainly not been spared the effects of the Covid-19 pandemic. (It) interrupted some of our plans for now, ”David admits.
Despite the Famous Amos outlets closing during the breaker period, the main source of revenue is still its storefronts, although performance varies.
“The stores in the central region weren’t as good as those in the suburbs. The exception would be the Paragon outlet, which really came to life during the breaker era, ”says David.
The notorious Amos is said to have seen his income fall by 30% in the early days of the virus outbreak, but has seen a rapid recovery to match his 2019 performance in June.
In Singapore alone, the famous Amos Fresh Bake studios have a total of 20 outlets across the island.
“We are more conservative in our spending and seek to put projects on hold that are not urgent. (The positive side is that) there has been a lot of time to experiment with new products. “
David also points out that Famous Amos Singapore is expanding and hiring new employees despite the drying up of jobs during the pandemic period.
A story of acquisitions: the fall of Wally Amos and the rise of Ferrero
The Famous Amos brand serves pastries like cookies, brownies, muffins in the form of packaged goods sold in supermarkets as well as freshly baked goods sold in outlets.
The brand is owned by the Ferrero group (in turn Ferrero International SA), which has F&B subsidiaries such as Ferrero Pralines, Nutella, Kinder and Tic Tac.
The conglomerate sells its products in more than 170 countries. In 2019, the group closed the year with a turnover of 11.4 billion euros (18.1 billion Singapore dollars), an increase of 6.2% compared to the previous year.
Despite its current iconic status, Famous Amos started out as a small cookie store in Los Angeles under the management of founder Wally Amos in 1975.
A high school dropout, Wally was a former talent agent armed with nothing more than a network of famous friends and entrepreneurial zeal.
The “cookie man” started the first Famous Amos Cookie Company with a loan of US $ 25,000 (S $ 34,500) from singers Marvin Gaye and Helen Reddy.
In 1982, business was booming, and cookie revenue reached US $ 12 million (S $ 16.5 million).
America was charmed by Wally Amos’ wealth story, but the business got off to a bad start. In 1985, Famous Amos’ revenues dropped to US $ 10 million (S $ 13.8 million).
A series of partnerships with investors who bought out Amos’ stake in the company led to the purchase of Famous Amos by the Shansby Group in 1988 and Wally was relegated to the figurehead.
Since then, the company has changed hands on several occasions, ultimately falling under the management of Kellogg, the then Ferrero group, in 2019 for US $ 1.3 billion ($ 1.8 billion).
Perhaps the bright side of the change at the famous Amos estate has been his successful rebirth as iconic cookie brand, with benefits to match.
The outlook remains positive despite the pandemic
“Without delving into the numbers, there has been positive and consistent growth for the brand over the past decade,” comments David cryptically.
“Rather than following trends, consistency is the key to Famous Amos’ success in Singapore.”
A report by Channel News Asia estimated that Singapore’s local F&B industry revenue fell 36% in the first quarter of 2020.
Small businesses in the F&B sector have been crippled by the pandemic, but big brands like Famous Amos have not been spared.
In addition to business closures, disruption of supply lines, and fears over coronavirus transmissions through food packaging, several coronavirus scares have emerged in baking factories.
The Ferrero Group closed a factory in Brantford, Ont., In April after seven of its workers tested positive for COVID-19.
In March, however, Ferrero announced plans to increase investment in China.
Taking advantage of the pandemic, the company said that “(they) expect the epidemic to lead to new opportunities and new business models in China, especially in e-commerce and consumption,” explains David.
“What can be said for sure is that stores will continue to bake and cookies will continue to be available to customers for the considerable future.”
Featured Image Credit: Mothership / Famous Amos
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