Mission: To help Hon’s Won-Tun “regain credibility” in the eyes of stakeholders
Assets: 11 years in the food industry including five as CEO of Happy Planet
Yield: A new job with huge challenges ahead
By Glen Korstrom
After 39 years as a family-owned restaurant and food-manufacturing business, Hon’s Wun-Tun House has a non-family member at the helm. The once-prominent enterprise was bought by a group of partners led by Ray Leung, who has been appointed CEO as part of a strategy to expand outside the chain’s traditional revenue streams and move beyond the near-bankruptcythat it faced last year.
“Innovation will be an important avenue to do that – making new products and packaging them in new ways,” said Ray Leung.
He intends to do for Hon’s Wun-Tun House what he did for Happy Planet between 2005 and 2010 when, as CEO, he helped the organic juice producer triple its revenue and launch new products such as soups, sauces and energy shots.
“At Happy Planet, the bottled product was great for people who were on the go and at coffee shops. But we came up with a larger carton because we wanted customers to be able to have that same experience at home,” Leung said.
“Hon’s Wun-Tun House products are already a home product. We will probably look at it in an opposite way: how can I make our products more convenient for people who are on the go and have very little time.”
Hon’s Wun-Tun House made headlines last year when it filed court documents showing that it owed more than $400,000 to a combination of creditors and employees.
It closed its Richmond restaurant and then sold its restaurants on Robson Street and in Chinatown, New Westminster and Coquitlam.
All pay an annual licensing fee to continue to carry the Hon’s Wun-Tun House name but the new owners are free to experiment with the menu as long as they keep core items such as potstickers, rice noodles and wheat noodles.
Essentially, the licensees of the Hon’s Wun-Tun House brand struck a similar agreement to that which Canadian A&W founder Dick Bolte hatched in the 1960s. He bought the rights for his private company to use the American A&W trademark in Canada however he wished.
That’s why Canadian A&Ws have teen burgers and mozza burgers whereas stores branded A&W in the rest of the world, and owned by Kentucky-based fast food conglomerate Yum! Brands Inc., instead have different burgers and hot dogs.
Most Hon’s Won-Tun House revenue currently comes from selling its noodles and dumplings to grocery chains such as Overwaitea Food Group, Safeway Canada and Loblaw Companies Ltd.-owned T&T Supermarket.
South of the border, Leung’s company sells most of its products to restaurant owners.
He has been in his new job little more than a month but already is entertaining the idea that Hon’s Wun-Tun House-branded packaged meals could be on the horizon.
That strategy has been successful for local restaurateurs such as Vij’s co-owner Vikram Vij.
Hon Ip founded Hon’s Wun-Tun House in 1972 by opening a restaurant at the corner of East Pender Street and Main Street. The chain grew to seven restaurants by 2001.
Leung would not reveal his private company’s exact sales figures but he said that noodles and dumplings account for about 80% of Hon’s Wun-Tun House’s revenue.
Those products are made in two Vancouver manufacturing facilities that combine to be about 40,000 square feet and employ about 55 people.
“Hon’s Wun-Tun House and Happy Planet are very similar. That’s what attracted me to the opportunity here,” Leung said. “They are both iconic brands that have long histories in Vancouver.”That said, Happy Planet has had a clearer growth trajectory since current Vancouver mayor Gregor Robertson and brothers Randal and Andrew Ius rented a Langley warehouse in 1994 and started making juice from fruit grown on what was then Robertson’s 50-acre organic farm.
Leung believes Hon’s Wun-Tun House “lost its way” by failing to sustain growth.
“We need to regain our credibility with our customer. We have to regain our credibility with our consumers and we need to regain our credibility with our business partners,” he said.
It is OK to make mistakes as long as you learn from them, Leung said.
He remembers his father telling him, “You first learn to walk after scraping your knees.”
Leung has been in the food business since 2000 when Soyaworld Inc. CEO Maheb Nathoo hired him to be that alternative dairy company’s CFO.
Soyaworld owns a 60% stake in Happy Planet, so Nathoo’s confidence in Leung helped Leung climb into the job as CEO of the juice producer.
He left in April 2010 in what he describes as a “calm” transition. After five years, it was simply time to go, he said.
He took a couple months off to spend more time with his wife Patti and the couple’s two pre-teen sons.
Leung then landed a job in July that he wishes he hadn’t.
Avalon Dairy Ltd. hired him to be its COO and Leung believed that the role would be one where he would be responsible for helping the company grow.
He soon learned that Avalon was in negotiations to sell most of its assets, according to a notice of civil claim that Leung filed in May.
On April 25, Colliers International listed a 1.26 acre property in Vancouver up for sale that included the 105-year-old Avalon Dairy site.
Leung seeks general, aggravated and special damages against the glass bottled-milk producer.
Originally from Hong Kong, the 43-year-old Leung immigrated to Canada with his parents when he was seven years old. He moved around a lot but grew up in the prairies before completing a commerce degree at the University of Saskatchewan when he was 22 years old.
A string of jobs followed until he was hired at Soyaworld in 2000.
Outside work he is active with The Executive Committee (TEC), which is a peer advisory group where executives are placed in cohorts of about 15 people who do not come from companies that compete with each other.
“What we try to do at TEC is get people who both accept advice and also can give it,” said Bob Turner who is chair of Leung’s TEC cohort. “Ray’s very insightful in the questions he asks his fellow members and in the ideas that he suggests. He’s not just a taker.”