This article first appeared in The Edge Malaysia Weekly on March 9, 2026 - March 15, 2026

IN the wake of Oriental Kopi Holdings Bhd’s (KL:KOPI) successful listing early last year, there has been a slew of deals in the highly competitive food and beve­rage (F&B) space, particularly involving home-grown brands.

Oriental Kopi Holdings Bhd, which runs a popular chain of halal kopitiam, was listed on the ACE Market on Jan 23 at 44 sen, valuing the company at 20 times its FY2024 earnings and giving it a market capitalisation of RM880 million. At the time, it operated 20 outlets.

Its market value has since ballooned to RM2.32 billion, based on its closing price of RM1.16 last Thursday (March 5) — nearly tripling in just over a year.

Part of the interest in local F&B stems from a marked shift in consumer tastes towards domestic brands, following the boycott of some Western brands after the Israel-Palestine conflict erupted in October 2023. Well-established brands such as McDonald’s, Starbucks, KFC and Pizza Hut were among those affected.

During this period, companies such as ZUS Coffee, which has outlets locally and abroad, gained traction. In October last year, the company marked a major milestone by opening its 1,000th outlet.

“Since last year, we have been receiving increasing inquiries about potential deals and listings involving F&B companies. I believe the successful listing of Oriental Kopi could be one of the key catalysts,” says Datuk Lock Peng Kuan, managing partner of Baker Tilly Malaysia, an accounting and business advisory firm.

“In previous years, we saw strong initial public offering (IPO) momentum among retailers such as Mr DIY Group Bhd (KL:MRDIY) and pharmaceutical players. Now, investor interest appears to be shifting towards the F&B space.

“While the sector is undeniably competitive, investors are increasingly focused on scalability potential. If [F&B companies] can find the right formula, they can expand efficiently across multiple locations.”

Lock challenges the long-held perception that F&B businesses necessarily require an extended gestation period before gaining meaningful traction, arguing that brands with the right concept, operational discipline and cost controls can achieve faster ramp-up than traditionally assumed.

“There are generally two ways to scale. One is through franchising, although that may come with trade-offs in terms of quality control and brand consistency,” he says. “The other is to partner with private equity (PE) firms, where owners can tap into capital and institutional expertise to accelerate expansion while maintaining tighter oversight. Overall, we think this will be the year for F&B.”

Areca Capital Sdn Bhd CEO Danny Wong reckons that changing demographics could be the key factor driving investor interest in the F&B space.

“Millennials and Gen Z currently make up the workforce. The middle-class group is growing and these two generations are more willing to spend on F&B purchases or travel compared to the previous generation, which preferred to save money to buy properties. This so-called ‘Yolo’ (you only live once) mindset among the current workforce is driving demand for F&B, as they prefer to emphasise experience and lifestyle ,” Wong says.

While the F&B industry is highly competitive and challenging because of rising raw material prices and labour costs, Wong notes that established chains are gaining popularity because they are better able to manage costs through centralised kitchens and economies of scale.

“The success of new F&B listings and more PE firms taking bets in this space are also among the factors attracting more public-listed companies to jump on the bandwagon,” Wong says.

Earlier in February, Creador Foundation, the philanthropic arm of PE firm Creador, and Censuria Capital emerged as strategic investors in café chain Hock Kee Kopitiam.

In a statement, the café company said the investments — whose amount was not disclosed — inject institutional capital, expansion firepower and operational discipline to accelerate network rollout, platform capability and long-term market leadership for it. Founded in 2018, Hock Kee Kopitiam has grown from operating a single outlet in Johor to having 17 outlets nationwide.

Creador itself has investments in F&B. In 2011, it was reported that the PE fund bought a 30% stake in Loob Holding Sdn Bhd — the holding company of bubble tea brand Tealive — for RM200 million to RM260 million.

Loob Holding runs more than 950 Tealive outlets and 140 Bask Bear stores across Malaysia and other countries. In June last year, it filed a prospectus exposure with the Securities Commission Malaysia to go for a listing on the Main Market of Bursa Malaysia.

Empire Premium Food Bhd, which operates the multi-format sushi chain Empire Sushi, is also planning a listing on the Main Market. It filed its initial prospectus last October. Having started in 2010 with grab-and-go sushi, Empire Premium Food now operates 132 Empire Sushi outlets across Malaysia.

RT Pastry Holdings Bhd also filed a draft prospectus last October. The company, which runs a chain of bakeries, plans to raise funds from the ACE Market.

Loob Holding, Empire Premium and RT Pastry have yet to announce whether their listings will take place this year.

PE firms are not the only ones eyeing opportunities in the F&B space. Since February, there has been a string of deal announcements involving parties ranging from publicly listed companies seeking diversification through strategic stakes in established operators to F&B players consolidating within the sector via acquisitions of complementary brands.

Together, these transactions point to two parallel trends unfolding at once — corporate Malaysia branching into consumer-facing businesses, while existing F&B groups bulk up to strengthen brand portfolios in an increasingly competitive market.

The latest involves Harvest Miracle Capital Bhd (KL:HM), whose interests span IT and information communications technology. It said last month that it would take up a 40% stake in Kaw Kaw Malaya Sdn Bhd (KKM), marking its entry into F&B. It entered into an agreement with G&T Brand Sdn Bhd — the company behind Bungkus Kaw Kaw and Ah Cheng Laksa — to subscribe for the KKM shares, comprising RM40,000 in cash and a shareholder’s advance of RM4.36 million.

KKM opened its first “Malaysian heritage-inspired” outlet at the newly refurbished Bangunan Sultan Abdul Samad in Kuala Lumpur in February, with a second planned on Jalan Kemuning, off Jalan Imbi.

Hextar Industries Bhd (KL:HEXIND) last month raised its bets on the F&B industry by acquiring a 51% stake in Woodpeckers Group Sdn Bhd — master franchisee of the llaollao frozen yoghurt chain in Malaysia — for RM177.5 million cash. Hextar is also the exclusive operator of China’s Luckin Coffee chain in Malaysia.

The proposed acquisition is an interesting one because it includes an average annual profit guarantee of RM29 million over three years. At the purchase price, Woodpeckers is valued at RM348 million, representing a price-earnings ratio (PER) of 12 times, which is lower than Oriental Kopi’s historical valuation of 37.54 times. However, the valuations are higher than SDS Group Bhd (KL:SDS) and Focus Point Holdings Bhd (KL:FOCUSP), which trade at a historical PER of 10.83 times and 10.25 times respectively.

SDS operates 42 F&B outlets domestically under the names SDS Café and Fanpekka Café, whereas Focus Point operates an optical retail chain and the homegrown bakery chain Komugi. In early 2024, Focus Point introduced Happi, a new concept focusing on frozen yoghurt, when it opened its first outlet at Mid Valley Megamall.

Woodpeckers Group, founded in 2015 by former banker Tan Kai Young with just two franchised outlets of the Spanish frozen yoghurt chain llaollao, now operates 131 outlets across Malaysia. It is understood that the group was at one point exploring an IPO on Bursa Malaysia.

According to filings with the Companies Commission of Malaysia, Woodpeckers Group posted a profit after tax of RM41.24 million for the financial year ended Dec 31, 2024 (FY2024), up 18% year on year from RM34.96 million and a sharp rise from just RM1.046 million in FY2020.

An analyst notes that Hextar Industries has been actively pursuing F&B deals, aiming to strengthen its position as a consumer-facing F&B player on Bursa Malaysia. “In a way, it could create synergies between its llaollao operations and the Luckin Coffee chain, particularly in areas such as logistics, warehousing and supply chain management,” the analyst adds.

Other companies that have either diversified or expanded into F&B in recent years include property developer Paramount Corp Bhd (KL:PARAMON) and personal care products retailer InNature Bhd (KL:INNATURE).

Last July, Paramount Corp acquired a 28% stake in Singapore Exchange-listed Envictus International Holdings Ltd — operator of Texas Chicken and San Francisco Coffee in Malaysia — for S$38.33 million cash. It bought the stake from JAG Capital Holdings Sdn Bhd, a vehicle of Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani.

Meanwhile, in 2024, InNature — operator of The Body Shop in Malaysia and several other countries in the region — acquired Blu Restaurant Sdn Bhd for RM21.25 million in a related-party deal as part of a diversification plan.

Blu Restaurant holds the exclusive rights to open and operate Burger & Lobster restaurants in Malaysia (excluding the one in Genting Highlands), Indonesia and Vietnam. The acquisition valued Blu Restaurant at roughly eight times its 2023 net profit of RM2.55 million.

The acquisition, which came at a time when InNature was grappling with a slump in profits and declining sales, has proven fruitful. Despite operating just one Burger & Restaurant outlet, at Suria KLCC, InNature’s profit after tax (PAT) from F&B in Malaysia for the financial year ended Dec 31, 2025 (FY2025) — RM3.56 million — nearly matched its total Malaysia retail earnings of RM3.66 million.

In FY2025, InNature made a net profit of RM7.71 million on the back of RM139.86 million revenue. “The F&B business now contributes 43% of the group’s total PAT, effectively cushioning the decline in the earnings of its retailing business,” the company said in a stock exchange filing on its results. 

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