This week, Mexican restaurant chain Mad Mex reacquired 50 per cent ownership of the business from its Singapore-based venture partner, 4Fingers International, after strict lockdowns in Singapore and Malaysia stifled growth. The move marks the end of the company’s ambitious expansion plan in Asia, shifting focus to the Australian market for the foreseeable future. Here, Clovis Young, founder and CEO at Mad Mex, shares the struggles the brand faced in Asia, the strategy for growth in Austral
ustralia, and how the brand is ramping up its healthy eating message in stores. Inside Retail: How do you feel about bringing the brand back to Australia? Is it an emotional move for you? Clovis Young: Yeah, 100 per cent. I’m very excited. I started this business in 2007 and we’ve worked tirelessly over the last 15 years to build it so it’s great to be back to 100 per cent ownership. IR: Why did the business struggle to take off in Singapore and Malaysia? Was it purely related to Covid lockdowns or were there other factors at play? CY: We opened a restaurant in Singapore in September of 2019, and we opened the second restaurant in Kuala Lumpur, KLCC Centre, in February of 2020. Then both countries went into severe lockdown in March/April of 2020, and they really didn’t have the same break [from lockdowns] that we had [in Australia]. The other big difference between those countries and Australia, is they didn’t have the same Covid leasing protections that Australia put into legislation – the restaurants were expected to be closed and pay rent which is not a viable situation. So unfortunately, both of those stores have closed and will not reopen. Neither one of those businesses had a chance, so to speak. IR: Do you think under different circumstances, the brand could have been successful in those markets? CY: Yes, 100 per cent. The team, both in Singapore and Australia, did an amazing job putting those restaurants on the ground and setting up the Halal supply chain for both Malaysia and Singapore. Everything was going really well but, as they say, ‘You can plan a pretty picnic, but you can’t predict the weather’. It was just very unfortunate timing. Every country has had a slightly different Covid experience and a slightly different best practice for how to respond. What we did in Australia would not work in Singapore and Malaysia, and [their response] definitely wouldn’t work in Australia. So, almost by the nature of how Covid impacted different countries, our strategy and the strategy of 4Fingers Group were very different – different enough that it didn’t kind of make sense strategically for us to continue to work together. That said, they were great partners, we worked well together, they put a lot of effort, we put a lot of effort in, so it’s frustrating. One of the casualties of Covid is that international work is much harder with no travel. IR: What does the growth strategy look like for Australia in the next 12 months? CY: The rule of thumb is we’re trying to grow at about 25 per cent per year in terms of store numbers. Between July and Christmas this year, we will have opened 11 stores. We’re opening four this week! We’re taking this Covid opportunity to be aggressive and grow quickly as opposed to being conservative and seeing how it all plays out. We [want to focus on stores] outside of the CBD locations. We think CBD is a critical piece of where we want to be, but we think it’s gonna be two years before it settles into whatever the new normal is. Over the next year or two, we think landlords will perhaps become more realistic around what kind of deals they’re going to put to retailers. The short-term [plan] is A-grade shopping centres and some convenience-based shopping centres in neighborhood areas. IR: Health is a big focus of the Max Mex strategy. Being a quick service restaurant, is it hard to differentiate yourself from unhealthy fast food retailers? How do you ensure that a healthier eating message cuts through to consumers? CY: We’ve got a program called Fresh Fuel for Life where we sponsor young people [to pursue] surfing, skateboarding, biking [etc.] and we play video content in the restaurants of people living a healthy lifestyle. One of the ways we’re educating people around health is to create an entertainment element in the restaurants that channels that healthy lifestyle. We publish our nutritional calculator which has all the details of the food and how it’s good for you, so that’s another layer of transparency. Then, fundamentally, I think people can feel the difference. Our food is clean, real food – all the things that are visible to people that care about that kind of thing. IR: Is plant-based meat a part of that? CY: Mad Mex is [one of the] leaders in the QSR space for vegetarian and vegan food. We’ve had vegan offers on the menu for the last three years. We do a Meat-free Monday promotion to encourage people to [eat] vegan. We have the best plant-based chicken product that we’ve ever tasted and I think it’s probably the best in Australia. We think [plant-based food] is an important strategy, both from a health perspective but also from an environmental perspective and we’re committed to being a leader in that space. IR: Do you hope to explore other international markets in the future? CY: We continue to build our capability to support international growth, but until international travel normalises, it’s what we call a medium-horizon project. We do believe that there are great opportunities [for the brand] overseas.