If you are new to Asia, and you want to sell your food products there, Singapore is a perfect first market. Since the country is a melting pot of various cultures, people are open to trying new tastes and flavours. Food is a national obsession and people can be queuing up for something special. And what you will also see: if it sells well in Singapore, distributors in other Asian countries are more likely to promote the product.
Singapore Food & beverage industry trends
Household monthly incomes have strongly increased in the last few decades, and there are many educated and westernized consumers: middle-aged PMETs and a younger group of PMETs. PMETs is short for professionals, managers, executives, and technicians. The middle-aged PMETs aged 40-64 have a higher income they can spend on the industry and their consumer tendencies are well-complemented with their sophistication of taste acquired mainly from their travels. The younger group of PMETs who are in their twenties and thirties have contributed much to the food & beverage industry because they grew up surrounded and influenced by modern western cafés, social media, and their peers.
The expatriate community
Singapore has managed to attract expatriates to establish a second home in the city state. These foreigners mostly came from Western countries. Another group of foreigners are independent businessmen who invest in the country and establish a Singaporean workforce. The foreigners are able to indulge in worldly food and drinks in the country’s diverse selection.
Growing number of inbound tourists
The number of tourists have increased over the years and this is because of the following reasons:
- Increasing frequency of flights from surrounding/nearby countries
- The opening of two casinos
- Increasing number of meetings, incentives, conferences, and exhibitions
- New tourist attractions
The following consumer trends should be taken into consideration:
- Singaporeans are leading hectic lifestyles and have no time to prepare their meals so they would rather eat on the go or purchase processed and packaged foods.
- Western influence has had households opt for foods common to the West. They are consuming more of these instead of the usual traditional ones.
- Due to high incomes, Singaporeans are able to purchase food and beverages regardless of how expensive it may be.
The Singapore food industry
Singapore is not able to produce much food. As a result, it has become one of the world’s largest importers of agricultural products and processed foods. This consumption rate is only expected to grow due to higher incomes and a rising influx of visitors.
4 Major groups of food retailers in Singapore
- Large retailers
- Convenience stores
- Petrol stations
- Traditional stores
There is a huge number of retail outlets in Singapore at the moment.
- Retail growth is present but not as fast as expected.
- Retails have also resorted to giving discounts in order to attract consumers.
- Products which are poorly differentiated or are not well supported by marketing are facing challenges as well.
- Market for staples is weak.
- For new products, marketing and distribution is extremely high.
- High costs involved when companies try to maintain shares and positions.
- Changes in commodity and freight prices will have an impact on food sales – a concern for Singapore due its large imports.
- Low consumer confidence resulting to bargain hunting/seeking.
The key retail channels in Singapore are supermarket chains and hypermarkets and there are 3 major groups that operate these channels:
- The Dairy Farm Group
- FairPrice Group
- Sheng Siong
Specialty and fine food in Singapore
Specialty stores in Singapore sell fine foods at high prices and target high consumers and hold a small share in the market.
Organic and natural foods in Singapore
The organic food market in Singapore is small with rice as the biggest contributor of the market. Singapore also imports its organic food.
Ready meals in Singapore
Ready meals have allowed the people of Singapore to save time due to their busy schedules. This has enabled consumers to find more ways to reinvent the way they see ready meals.
Singapore is a very competitive market and pose several challenges. There are major supermarket operators which control the retail market. Marketing and distribution costs are higher, and it is always difficult to maintain your market share.
Importers and distributors are looking for suppliers who:
- Deal with local demands for promotional campaigns.
- Develop products and packages that fit local demand requirements. Typically package sizes are relatively big compared to the rest of the region
- Have a product and brand that is unique enough to break into the market.
- Be flexible in terms of returns and profit goals.
- Adopt a medium to long term strategy and action plan to build their market in Singapore.
Although the market is competitive, the spin-off effect in other Asian countries can be substantial. Guidance from local market entry specialists is essential. Alliance experts can help you with a Market Quick Scan or a full distributor search and anything in between.