Manufacturing in Singapore has a reputation for being expensive. Rent is high, space is tight, and labour and utility costs keep climbing, so many food makers are moving production across the Causeway.
But ice cream maker Oishi Manufacturing is betting the other way. Since new owners took over the business in 2022, it now makes ice cream, soft-serve premixes and lava cakes for large clients like Shake Shack, Popeyes and Nestlé.
Vulcan Post spoke to co-owners Erik van Keulen and Shamsa van Keulen, two former asset managers with no F&B experience, to find out how they turned a small-batch ice cream business into an OEM manufacturer for some of Singapore’s biggest food brands.
Oishi was founded in 2003 and went through several owners, though the name, which means “delicious” in Japanese, stuck around. Erik and Shamsa bought it in 2022, during the pandemic.
Erik says their background was in asset management, much of it real estate, and the duo was looking for an operating business instead. Food appealed because people need it every day, and Oishi had a track record but a small setup that left room to grow.
But the couple had never made ice cream, so they spent the first 12 to 18 months letting the business run by itself and observing it before changing anything.
The Oishi they bought had tried to be a one-stop shop for anyone opening an ice cream parlour, selling ice cream and sorbet alongside cones, packaging, flavourings, mixes and equipment like soft-serve machines and display freezers.
Its customers were mostly small independent cafes, restaurants and hotels, which meant lots of accounts and lots of small deliveries every day.
The van Keulens saw a flaw in that model. Amongst its HoReCa (Hotel, Restaurant, and Café/Catering) clients, Erik said a small account takes almost as much effort to win, serve and collect payment from as a large one, but brings in far less revenue.
By his rough example, one might be worth S$500 and the other S$50,000. Small customers can also switch suppliers at any time, whereas “if somebody buys from us, let’s say 100,000 lava cakes, they can’t just switch.”
So the couple flipped the model.
According to the company, larger corporate accounts now bring in over 60% of revenue, up from about 10% in 2022. Oishi has also roughly doubled in size since then, with its team growing from about 18 to around 45.
Shamsa says these larger clients take longer to onboard and need a lot of hand-holding, but once they’re in, the relationship becomes more of a partnership than a one-off sale.
The couple has deliberately shrunk the product list, too.
The old catalogue ran 25 pages, which amounted to hundreds of items. Erik says there are now fewer than 100 products, not counting those made for specific clients. Fewer products meant less cash tied up in unsold stock, less wastage, and longer production runs that are easier to plan.
Erik says Oishi has invested well over S$1 million in equipment since the acquisition. But that was the easy part. “A lot of the investment cost is not actually in equipment per se,” he says.
“It is really in the additional operating expenses that you have to accept and eat before you start filling up the capacity.”
In other words, Oishi invested in production capacity ahead of demand, absorbing the cost of additional staff and underutilised production lines until orders caught up.
Moving from small batches to semi-industrial production lines also changed how ingredients behaved. To meet the more stringent requirements of larger clients, Oishi had to build out both its R&D and QA teams.
R&D’s first job wasn’t creating new products. It was reworking nearly every recipe so it would still taste the same on the new lines. Only once that settled did the team move on to developing new products and handling client requests.
Oishi also keeps the accreditations that large clients ask for, including BRCGS and FSSC 22000, and its products are halal-certified. Erik says it will add certifications when a client needs one.
All of this runs out of an 18,000 sq ft facility in Singapore. According to the company, it can make up to 20,000 litres of ready-to-eat ice cream per day, depending on the grade. It can also churn out up to 2,000kg of powder premix, 10,000 waffles and 15,000 lava cakes on top of this.
Today, Oishi’s major clients include Shake Shack, Gardenia Food, SATS, 7-Eleven, Popeyes, KFC and Nestlé Professional.
Erik says what won them over was a willingness to work through problems with clients rather than hold rigid terms. If a client needs an accreditation Oishi doesn’t have yet, it gets the accreditation, and “the accumulation of big names gives us more big names.”
Projects are not rushed. A typical product takes about six months from concept to launch, and one took two years to reach supermarket shelves, with testing, halal certification and sign-offs across several jurisdictions all adding time.
Meanwhile, limited-time offers come with their own rules. Oishi wants order volumes and minimums fixed upfront, and the client commits to buying any excess stock and paying for the packaging, so Oishi isn’t left holding materials for a promotion that’s over.
One of Oishi’s most memorable partnerships is with Nestlé. It began when an existing client wanted Milo as an ingredient. Erik suggested putting the Milo branding on the pack, and Oishi approached Nestlé directly.
After about a year and a half, it has grown into a full partnership across business and consumer products. Erik says Oishi is Nestlé’s preferred manufacturer for Singapore.
The result is a new range under Oishi’s ArtisertZ line, pairing Milo, KitKat and Sjora flavours with Oishi’s own R&D and production. It includes Milo and KitKat soft-serve premixes, chocolate lava cakes made with Milo or KitKat, and a wholegrain chocolate muffin made with Milo. The products carry “made with” co-labelling.
According to Eric, in a market where consumers have developed a strong preference for Nestlé products, Oishi targets cafes, hotel chains, caterers, quick-service restaurants, and institutional buyers with this line.
Operating in Singapore comes with its own cost pressures.
Labour, rent and utilities are Oishi’s biggest expenses, Erik says. Space is another constraint: the same rent could secure a much larger factory in Malaysia. Accreditations are also costly to maintain, while heavy machinery adds depreciation expenses that further squeeze margins.
These pressures have led some manufacturers to move production across the border. Oishi, however, has chosen to stay in Singapore.
Shamsa says the “Made in Singapore” label still carries weight with customers.
Being based here also makes it easier for overseas clients to audit the factory without having to travel far, although hosting these visits takes time away from production. The couple also plans to explore automation grants from the Economic Development Board (EDB) as a mid-sized contract manufacturer.
Despite the waves of pistachio and matcha products, Erik says most of what Oishi sells remains firmly in the classics: chocolate, vanilla, strawberry and cookies and cream.
“The underlying trend is the need for F&B businesses to have affordable products they can sell to their clients where they can maintain their food cost,” he says.
Novelty flavours may draw customers through the door, and Shamsa says limited-time offers give businesses a cheaper way to keep their shops relevant than undertaking a renovation. But when it comes to repeat purchases, customers tend to return to their usual orders.
Ultimately, Erik says, what matters most to F&B businesses is keeping food costs under control—more so than chasing any particular flavour trend.
Beyond Singapore, Oishi has begun shipping overseas. According to the company, exports now make up about 20% of its business—it ships powder premixes to Indonesia and Thailand, and a frozen product to Malaysia for one client.
Enquiries have also come in from as far as Mauritius and Sri Lanka, though Erik says that isn’t an active push, and Singapore and its closest neighbours remain the focus.
Over the next three to five years, besides wanting to launch new products, Erik wants to deepen relationships with existing large accounts, automate more of both production and admin so Oishi can scale without hiring at the same pace, and accumulate accreditations that international clients are asking for.
For anyone starting a similar business, Erik says to keep your eye on the end goal and be patient. “There’s no way you can build a business without investing,” he says, whether in people, capacity or systems.
Shamsa adds that one should look for where one can genuinely differentiate rather than copy what’s already out there, and not be afraid of making mistakes.
“If you don’t believe in your own idea, why will anybody else?”
Also Read: Most would retire, but this senior couple learnt to make gelato from scratch & sells 500kg/month
Featured Image Credit: Oishi Manufacturing
