STI: Are they nuts?

Apr 6, 2004

Are they nuts?
by Leong Chan Teik

WHEN Mr Winston Tan left the safety and security of a Ministry of Finance post to run a health-food business, friends said: 'Are you nuts?'

He was an assistant director for financial policies, involved in policies such as those relating to how government ministries spent their budgets.

He swopped that heady career for a business selling mainly nuts and dried fruits with a friend from their Nanyang Technological University (NTU) days.

Even their capital was peanuts - just $50,000.

Astonished bosses at the finance ministry told their departing colleague that if it came to the crunch: 'There's always a job here for you.'

But four years down the track finds an upbeat Mr Tan, 33, who says: 'Instead of putting money into stocks and bonds, we invested in a business that is not high-risk. It's steady and we are confident of the returns.'

His wife, Rossina, was shocked at his decision to quit the ministry but expressed her support for his move anyway.

They did not have pressing money commitments to worry about - just a mortgage on their five-room Housing Board flat in Ang Mo Kio.

And they could get by on the income of Mrs Tan, a finance manager with a media company.

'We figured we would just live more frugally,' recalls Mr Tan.

His partner, Mr Nicholas Lee, 32, who is single, remembers that friends and colleagues raised their eyebrows when they heard of the business.

'They said: 'After all the years of studying, and you are going to sell kacang puteh?' '

Mr Lee, a business graduate, got his inspiration as a project executive with Spring Singapore, helping to upgrade small businesses.

'I met successful businessmen, and was inspired to try something on my own while I'm still young and have minimal commitments.'

Today, the pair operate out of the new Hudson Technocentre in Paya Lebar, which they moved into just last month.

At 1,500 sq ft, their office is spacious and shared with two start-ups run by friends from school days.

It is air-conditioned - a convenience they did not have at their first office which was an oh-so- tiny 80 sq ft, in Woodlands. They were there for about 1 1/2 years.

Their new office is a strong sign of how far their business, Fave, has come.

Their progress reinforces their early conviction that the health-food business is one with a glowing future.

They had done their research for over a year while they were still in their old jobs. The pair surfed the Web, and they asked friends who were living overseas for help and information.

Says Mr Tan: 'Our business concept is a lifestyle concept that will grow with each generation.

'It's unlikely that people will cut back on wellness as they get richer.

'Instead, they will spend more on exercise and on health food.'

Mr Lee chimes in: 'Singaporeans love to snack, why not snack healthily, minus the preservatives, salt, oil and harmful agents?'

Holding up a packet of pistachio nuts, you get curious about their 'unclean' appearance and the label which says 'Unbleached pistachios'.

Mr Tan explains: 'Unbleached means it's 100 per cent natural - what you see on the tree.'

In contrast, pistachios are normally bleached to remove stains on the shells. But some customers are sensitive to the bleaching agent, he says.

The nuts and dried fruit such as apricots, cranberries and flax seeds are sourced from traders in Singapore and overseas.

Fave sells 36 items which come from countries such as Australia, the Middle East and the United States.

A key selling point is its below-market rates. For example, Fave sells cranberries for $3.50 per 150g compared to $4.50 per 100g in health-food outlets.

Still, the initial one or two years were tough for Mr Tan and Mr Lee.

They worked from 7am or 8am until late in the evening, and sometimes over the weekends. They still do.

Being a small start-up, the pair were often treated shabbily. They tried to hold promotional events at department stores and supermarkets but were ignored.

Initially, they sometimes paid themselves $1,000 a month, sometimes nothing. But they doggedly kept selling the nuts and fruits and organising workshops on wellness and nutrition.

They can custom-pack as many as hundreds or thousands of goodie bags of health food for corporate clients during events such as health-promotion days or walk-a-jogs. They also do private labels for health-food retailers.

Clients have included schools, the Immigration and Checkpoints Authority, NTU, Economic Development Board and Singapore Press Holdings.

Sales now reach between $30,000 and $50,000 a month. In a year or so, they hope to break the million-dollar mark in annual sales, says Mr Tan.

It doesn't look likely that his former bosses at the Ministry of Finance will be getting him back.