An Appetite for Growth

Singapore is renowned for being a food paradise - its local cuisine a wonderful melting pot of Chinese, Malay and Indian flavours, as well as many other unique influences. Besides a bustling food and beverage (F&B) scene, the Republic is also home to a thriving food manufacturing sector that is successfully bringing the taste of Singapore to international markets.


 

The food manufacturing sector has been on a path of consistently healthy growth over the years. According to the Economic Development Board of Singapore (EDB), the industry made total sales of about S$8 billion in 2012. Meanwhile, Singapore’s food exports to the world reached over S$4.5 billion in the same year, reflecting an exceptional Compound Annual Growth Rate (CAGR) of 12.9 per cent across ten years.

This strong growth in food exports is no accident, but the result of a strong positioning Singapore’s food manufacturers have built up in overseas markets over the years. In 2004, International Enterprise (IE) Singapore launched the Tasty Singapore initiative in collaboration with Singapore Food Manufacturers’ Association (SFMA) and Singapore Manufacturing Federation (SMF).

To qualify as a Tasty Singapore Brand Ambassador, brands need to meet stringent hygiene and food safety standards, among others. But those efforts are very much worthwhile as the Tasty Singapore mark provides a powerful brand identity for Singapore’s food manufacturing and F&B firms when venturing abroad. The brands are also promoted in key overseas markets through business missions, trade shows, food festivals and other retail promotions.

A Positive Outlook for Exports

With Singapore’s relatively small domestic market, it’s not surprising that many food manufacturers are looking to international markets to increase their sales and grow their businesses. In that regard, Asia is an ideal region for Singapore food manufacturers to turn their sights to.

After all, the Asian middle-class is fast becoming one of the most important groups of consumers around, expected to account for 80 per cent of the growth in middle-class global spending from 2014 to 2030. Witness how Singapore’s total F&B exports to Asian markets grew by about 37 per cent between 2008 and 2012 to reach nearly S$3 billion. And while Malaysia and China are currently the top two markets for Singapore’s food exports, emerging markets such as Cambodia have been posting exceptional growth too.

Made Better in Singapore

The food manufacturing sector in Singapore is made up of some 750 companies, dominated mainly by local small and medium enterprises (SMEs). Together, these firms produce a wide variety of food products – including flavorings, sauces, ready meals, noodles, confectionery and beverages – serving both the domestic and export markets.

The Singapore Government is very much committed to helping the development and growth of this important sector. A Bain & Company international benchmarking study commissioned by SPRING Singapore found that while Singapore food manufacturers have strong and established brands and products, they were lagging behind countries such as the US, Japan and Korea in terms of productivity.

To help companies respond better to the challenges of lack of scale and operation inefficiency, manpower shortages and rising business costs, the Singapore Government has been encouraging companies to embrace productivity improvements.

One such initiative has been the S$45 million Food Manufacturing Productivity Plan launched by SPRING Singapore in 2011, which seeks to raise the sector-wide nominal value-added (VA) per worker by 20 per cent across five years. Another initiative in the works is the Food Hub at Senoko. Set to be ready in 2017, the facility will provide key infrastructure and shared facilities to help reduce operating cost, increase productivity and raise operational efficiencies.

Adding Value to Food Products

Beyond helping Singapore food manufacturers improve their cost and operation efficiencies, there have also been many efforts to help them add greater value to their products. One key initiative was the establishment of the Food Innovation and Resource Centre (FIRC) in 2007, a joint collaboration between SPRING Singapore and Singapore Polytechnic.

The FIRC helps provide local companies with access to food technology consultancy and platforms to develop new products, grow productivity and increase product shelf life. Over the years, the centre has also grown and extended its services to areas of food packaging and new product developments for niche markets such as the Halal market.

In 2014, the Singapore Food Manufacturing Association (SFMA) also launched the Great Singapore Food Gift Award – an industry award to recognise food that best exemplify the “Product of Singapore” brand. The award also serves to encourage manufacturers to market their food products as gift items, which have a stronger sales value.

Ready, Set, Grow

With so much going for them, Singapore food manufacturers look set to further grow their business in the years ahead. Exports will definitely be an important area of focus, with the task at hand to improve their productivity, enhance the competitiveness of their products, and fully capture the tremendous growth potential in the regional Asian markets.

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