Sweet success

German entrepreneur Patrick Heckelmann is building his food business on the Nanjing public's burgeoning taste for
pastries and chocolate.

German shortbread dipped in rich chocolate. Dark truffles
dusted with cocoa. It doesn't sound like your usual recipe for business success in China
but it's working miracles for Patrick Heekel-mann, founder of Nanjing Skyways food,
Narjing's only foreign owned and operated business in the food sector.
Skyways Bakery & Deli, located in Gulou district, has been one of the city's most popular hangouts since it
was opened in 1994. In the mornings, the deli fills up with a mostly foreign clientele
seeking fresh coffee with muffins or pastries and stocking up on bread and cheese. In the
afternoons, the crowd is more mixed, with local Chinese coming in to relax and enjoy the
city's richest offering of cakes and chocolates.
Although expatriates remain an important core clientele, Chinese clients now account for half of business turnover.
Heckelmann says the locals represent the future of his business, despite the fact that they
are not known for consuming sweet foods. Statistics show that on average Chinese
consume only about 16 grams of sugar a day, one-third the world average and 15 percent
of the typical American intake. But anecdotal evidence from Nanjing Skyways suggests that
could be changing.
"In the afternoons, a lot of Chinese come," says Heekelmann. "They
especially love the cakes and chocolates. Chinese are our biggest purchasers of
chocolate. They buy in bulk, a half kilogram at a time – I have no idea why. But often, they'll
buy a box and just eat it right there. Or they'll come in the morning and have cakes with ice
cream. And for whatever reason, they always order two cakes." The store sold 15kg of
chocolate the day before Valentine's Day.
The typical Chinese puzzlement at the bread-based Western diet may also be a thing of the past. "Lots of older Chinese clients come in as well," he says. "They particularly like the dark bread, and buy the second-day stuff
because the price is more reasonable. The latest trend is that sandwiches have become
more popular [with Chinese]."
Heekelmann also runs a local restaurant, Swede & Kraut,
run by his wife, Kaatje Philips. However, the bakery continues to be the major point of
growth for Nanjing Sky ways, whose revenues have been growing by 50 per cent a
year. "The bakery business has been the biggest growth factor. This comes despite the fact
that we've been very steady with our prices, while other places have low-ered their prices to
stay competitive."
Business is so promising, in fact, that Heekelmann and Philips are
now working to open a second deli in Xinjiekou district, the commercial centre of
Nanjing. "Our Chinese clientele is growing and Xinjiekou is the cen-tre for upwardly-mobile
Chinese," says Heckelmann. "Also, customer service is important to me, and I can see
given the demand here that the location is getting far too small. A new store will take some
of the pressure off this location."

Help for small businesses
Heckelmann is
positive about the environ-ment for small businesses in Nanjing, and says things today are
better than ever: "The mayor, Luo Zhijun, has really changed things. When he came into
office we [foreign businesspeople] began to appreciate the effi-ciency of the government.
They held press conferences to announce new policies. They issued questionnaires to all
companies to assess the efficiency of government institu-tions – and after that we would
hear about firings [of inadequate government staff]."
The only real challenge to
Heekelmann's business in the past was his original Chinese joint venture partner. He
claims that three years ago she demanded an expansion of her share in the business
despite not putting up any of the initial investment. The local government proved extremely
helpful in the matter, however, allowing Heckelmann to back out of his joint venture
arrangement and form a wholly-owned foreign company.
Asked if he plans to carry his
successful model to other cities in the region, Heckel-mann says this is unlikely. Great
chocolate may be one component of his success, but the most crucial factor for him is
being part of the community in Nanjing.
I like the personal infrastructure here, the
support system. People here help one anoth-er. They give you feedback. They tell you what
worked and what didn't. We attract our clientele through our personal services people
really feel at home here." he says.