Singapore is the world’s number one country in terms of ease of doing business; the country is entirely dependent on the imports for all the requirement of food, there is no local agricultural production. Singaporean market is very captive for a wide range of food and drinks used in its (Hotel, Restaurant and Institutional) HRI/foodservice industry channels although it has a very small food processing industry. Almost 90% of food is imported with no import tariffs or excise taxes at all on any food and beverages (except for alcoholic beverages and tobacco products), but 7% Goods and Services Tax (GST) is levied on all goods and services at the point of distribution.
In 2016, the consumer foodservice industry of Singapore was valued at S$8.0 billion and estimated to grow 1.4% CAGR from 2016 to 2021. The value of chained consumer foodservice growth is expected to outpace independent foodservice by 1.8% CAGR to 0.9% CAGR. Sales of food & beverage services have increased by 3.2% in August 2018 in comparison to last year August period. The total sales value of food & beverage services in August 2017 was $706 million and was estimated to reach $728 million in August 2018. Seasonally sales of food & beverage services have also been increased by 3.2% in August 2018 over the previous month.
Consumer Foodservice Industry Market of Singapore:
In 2016, Singapore’s consumer foodservice sector was valued at the US $ 6 billion (S $ 8 billion). Most of the Singaporeans and emigrants can often enjoy a wide range of different food, during the day various foodservice outlets, such as food stalls/coffee shops, open through the night. One can enjoy a whole day meal right from the morning, for example, in the morning a Malay breakfast at a local coffee shop, in the noon Chinese lunch at a food court and at evening a fine dining or casual restaurant to have American dinner. The meal could be anything a coffee from Starbucks or from local chained coffee outlets or can have a bowl of local noodles from food courts/centres in shopping malls located in suburbs or the region where residents live.
Singaporeans are Asia’s top spenders on the dining, the average monthly spend of the Singaporean on eating is US$ 200. On an average, the monthly patronize of customers at food courts 15 times, fine dining restaurants 2 to 3 times and quick-serve restaurants 7 times. Consumers in Singapore spend more on dining out because of word-of-mouth recommendations via social media, increase in dining options and most of all due to their busier lifestyles. A decent meal including drinks is easily available at US$ 5-US$ 8 at food courts. Highly recommended dish or meal attracts Singaporeans to travel across the island to sample the food. They are the good bargainers and like to good bargain 51% checking out credit card promotions and 34% booking dining deals on coupon sites or via mobile phone apps to get a high discount on deals.
Challenges and Competition in the Singaporean Foodservice Industry:
Singaporean foodservice industry is highly competitive and not an easy market to penetrate and this is because of the high market entry cost. Gaining market presence is a stiff competition and it is maturing rapidly so the growth opportunities of the market are less. Marketing activities play a crucial role in the development of the product whereas poorly differentiated products do not gain market presence as they are not well supported with marketing activities. Consumers are now much more focussed on the price before making any decision of purchasing food. The cost of living and doing business in Singapore has dramatically increased at a rapid pace of development and growth. As a result, many of the food establishments and retailers reached the survival mode.
Due to political and domestic pressure, Singapore is cutting back on its immigration policies, whereas, it has to engage with the rapid ageing population with shrinking purchasing power. The country has its strict and conservative regulatory environment that may put barriers on entry for food products. Whereas, logistic is also one of the challenges for many agri-food exporters for exporting to a smaller market like Singapore and they need to build a critical mass of products for becoming commercially viable. Rising trend of eating healthy food habit in Singapore is a challenge for the foodservice industry. They are shifting to healthy food with rich calories from eating extra calories (contains higher fat, sugar and salt content) which is considered as “junk” food. Availability of labour is also a challenge for the industry as it is difficult to find and expensive to hire workers from neighbouring countries.
Opportunities in the Foodservice Industry in Singapore:
In 2018, there are a variety of opportunities for the foodservice industry in Singapore but with this understanding customer needs, millennial preferences, leveraging new packaging and employing key technology and acquisition strategies are some essential step to stay on the top in the competitive marketplace. Consumers know more conscious than ever before and quick search about the products and services before they buy. They quickly search on their smartphones; they make a speedy choice of the product which they consume. They need to know everything about the food, such as protein, energy, calories, food for glowing and healthy skin, etc. Digital and social platforms are the best channel for successful food and beverage businesses to connect with the consumers and provide them with the robust product research avenues, tips, stories, forums and more for the information hungry consumer.
Singaporean has an insatiable appetite for a different range of food and beverage products as the country is highly dependent on agri-food import. The country has the highest disposable incomes in Asia, so the Singaporean consumers are well travelled and well educated and highly attracted to the western concept quality food and beverages. Expatriates and foreigners working in the country drive the demand of the different culture food in the island. Also, the tourism industry of Singapore is one of the major fascinating factors for a huge appetite for higher value food products. Globally, it is one of the most open economies with no tariffs on most agri-food products except for alcoholic beverages and tobacco.
Singapore-based food discovery platform, Chope was founded in 2011. The platform connects diners and restaurants and vice versa through discovery, reservations, and dining deals. Currently, it is operating in 8 cities with successfully seated over 35 million diners and helped more than 3,000 restaurant partners manage online and offline reservations table inventory, incoming calls, queues, and prepayment, all seamlessly integrated with Chope’s demand-generating diner app. Presently, it is available in Singapore, Hong Kong, Bangkok, Phuket, Shanghai, Beijing, Jakarta and Bali.
FoodXervices Inc is a Singapore-based company with one of the top foodservice distributors in Singapore. It has over 2000 clients providing services to ranging from top hotels and restaurants, airlines and cafes, fast food chains and culinary institutions. 70% or more products are imported from the US, Europe and other parts of Asia. Xtuff, Bello, GroXers and Xin Si are some of their own house brands which have created its key partner across the globe. Such other global brands, such as 3M, Divella, MUH, Bangor, Lee Kum Kee, Kimberly Clark Professional, Unilever, and Gallo are line-up products. They aim to become a one-stop foodservice solution provider in Singapore and Asia.
Singapore-based Honestbee is Asia’s leading marketplace for services founded in 2015. Presently, it is working in the area of Concierge, eCommerce, Logistics, Marketplace, and CSR along with the Last Mile Delivery, On-Demand Delivery. It aims to serve society back by providing extensive training programmes and create equal employment opportunities to people from all walks of life. It aims to take care of all those time-consuming daily tasks and create time for you to spend doing what you love and care about. Currently, it is operating in Malaysia, Taiwan, Vietnam, Hong Kong, Thailand, Japan, Indonesia, the Philippines and India.
For customised market research reports for any kind of startups and business in any industry, you can contact Craft Driven Market Research team here directly.Chope, Consumer Foodservice, Craft Driven, Foodservice, Foodservice Industry, FoodXervices, Healthy Food, Honestbee, market research, Quick Service Restaurants, Restaurants, Singapore Foodservice, Singapore Market Research