Harnessing tradition to safeguard for the future
From family recipe to regional recognition
“Most people do not know much about soya sauce. We think it’s a condiment and always the same: it’s black, it’s salty, and it has some flavour. But it is not.” Ken Koh, the third-generation owner of Nanyang Sauce in Singapore, bet the company on this knowledge when he took over what was a loss-making business eight years ago. His hunch: that today’s consumers were willing to pay a premium for the traditional qualities of soya sauce, made according to the private recipe that had been handed down within his family for 19 generations. Koh has had more success than he dared imagine. Nanyang Sauce is a now a profitable company that has become known in culinary circles throughout Asia. It is also the torchbearer of an artisanal method of making a dietary staple, making Koh something of a culinary star in regional media and beyond.
A legacy of traditional soya sauce making
His journey to revive the family business has not been conventional or straightforward. Koh’s grandfather moved to Singapore from China in a time of global upheaval, during the Second World War.His grandfather comes from a long line of soya sauce makers and brought with him a jar of koji to Singapore, a fungus that is used in China and Japan for fermenting food – in particular in the making of sauce from soya beans.
His grandfather started making soya sauce in Singapore and selling it to restaurants and traders. Koh remembers visiting him as a child, and seeing how the traditional technique worked. It takes nine months to make soya sauce from beans this way, compared with less than a week using industrial methods.
We were stuck. The price of the product had to stay the same, because it was the same price as the big commercial brands of soya sauce.
When Koh was just 12, his grandfather died and the business passed into the hands of the next generation. Meanwhile, Koh completed his education and became an entrepreneur, setting up and running a training business for students and executives. He admits he did not have any plans to go into the family business. “But then I saw that my parents’ generation were at the age where they wanted to stop working,” he explains, referring to his several uncles who were also involved in the business, “and nobody of my generation wanted to take over.”
Koh joined the business when it was in a challenging commercial situation, consistently losing money. “We were stuck. The price of the product had to stay the same, because it was the same price as the big commercial brands of soya sauce. But the cost of ingredients was going up and margins were going down.” And it was taking them 40 times longer to make each bottle of soya sauce because they made it the slow way, by hand, through traditional fermentation.
Repositioning a loss-making business as a premium brand
Koh quickly determined that they should turn its slow process – until then, the albatross round the company’s neck – into a virtue: to sell the product at a premium, in a world where natural foods and processes were increasingly valued.
He met with resistance, however, from the senior generation, who were still running the show, and the business continued to decline. After a couple of years, the family decided to sell the building the business was based in, and Koh was tasked with making the deal happen. “I found a buyer, who made an offer, which we agreed to, and everything was scheduled to go through, but at the very last moment, for some reason, they changed their minds. So for me, that was someone in the heavens saying, ‘No! Don’t sell it’.”
At that point, Koh tried to convince his elders to allow him to start making and selling a range of more premium, aged soya sauces. Koh is candid about how difficult the conversations with his family were at this stage, as they were his elders in the family, and in Southeast Asian family culture, you do not challenge the methods of your elders. There was considerable opposition from certain family members, who eventually agreed on condition that he do it under a new brand, Nanyang Sauce, “so I would not disturb the existing modus operandi.”
There was no proper accounting system, no proper inventory management system, no enterprise software – it was very much based on trust.
“For the first year or two,” he says, “I was out there, getting the brand message out, getting workshops done. I realised that my sales, were going up. And it came to a point where, because we had limited production capacity (in the two companies), I had to talk to them, and see how we could marry the new company and the old company together. It was a challenge.” He says many of the old company’s processes were still stuck in a pre-digital era. “There was no proper accounting system, no proper inventory management system, no enterprise software – it was very much based on trust.”
Koh says that he had a “very difficult conversation”, pointing out that the old family company was still losing money, and that the whole business needed to change. The oldest family member involved in the business, who was around 70, refused to countenance Koh’s proposal, and decided to retire. “It was not a happy or proud moment; to this day I wish he hadn’t,” says Koh. “But the rest of the family members got on well, so I am lucky and grateful. We had casualties that didn’t survive the transformation. As a result of that, at least everyone aligned with me, and the two companies became one.”
Modernising a family enterprise for the next generation
Since then, Koh has become the face of the company and, effectively, runs it. He has an eye on the next generation: both his nine-year-old daughter and six-year-old son have spent time at the sauce maker. His daughter, he says, “loves soya sauce – she comes to the factory, she’s having fun in the same way as me when I was young, whenever she has her school holidays.”
Koh’s vision for the future includes vertical integration – the company has started its own soya bean farm in Bhutan – and diversification. Innovative new product lines include selling the salt that is a byproduct of the fermentation process being sold as a culinary delicacy, and a skincare brand, KITKOJI, made from the active ingredients discovered in their fermented soya beans, which he says have demonstrable cosmetic benefits. The next generation are likely to end up running much more than a humble maker of soya sauce.
Key highlights
Ken Koh’s grandfather, Tan Tiong How, moves from China to Singapore, carrying a jar of koji mould and begins making fermenting soya sauce with it, using his grandmother’s recipe.
He begins selling his homemade soya sauce door to door from his tricycle.
As demand for the product grows, the Nanyang Sauce Factory is established, selling soya sauce under the Golden Swan label.
The second generation takes over the business, when Koh’s grandfather dies when Koh is just 12.
Koh becomes director of Nanyang Sauce, his own brand of premium soya sauce operating from the same factory as his family’s original business.
As sales of Nanyang Sauce grow, Koh convinces his family to merge the two businesses – effectively taking over as the third generation.
Koh co-founds Kitkoji, a range of fermented skincare using the organic ingredients from his soya sauce production; and sells the salt that is a byproduct of the fermentation process.
The company continues to grow, now known in culinary circles throughout Asia for the quality of its products and as the torchbearer of an artisanal method; while Koh’s young children, the fourth generation, enjoy spending time in the factory.
