Food manufacturing in Singapore
Food Manufacturing | 25 Mar 2022
Singapore is a melting pot of different ethnic cultures, religions, and traditions. The (arguably) best part is the gamut of culinary delights as a result of the diversity, and Singaporeans love our food. Take for example the frenzy over the “Singaporean Curry Chicken” recipe by BBC. Even the South China Morning Post reported about how Singapore could obsess over food even in the middle of learning to live with COVID-19. However, what is less known about the food paradise is the booming food manufacturing industry in Singapore.
What is the current state of Singapore’s food manufacturing sector and what are some of the trends to look forward to? In addition, we will explore some of the challenges which may affect the food manufacturing industry and possible solutions.
We previously also looked at the Food and Beverages industry. If you are interested, read it here: How will Singapore’s food services industry survive and thrive in 2021?
Current state of the food manufacturing industry in Singapore
Singapore’s food manufacturing industry includes more than 940 organisations, contributes 1.1 percent of Singapore’s gross domestic product and employs more than 48,000 people, according to a Channel News Asia report (September 2020). Singapore’s Food Manufacturing Industry Digital Plan reported that food manufacturing industry in 2018 contributed more than S$10.7 billion in output, of which about 60 percent was exported globally.
When the Food Manufacturing Industry Transformation Map (ITM) was launched in 2016, the goal was for the industry to have an average productivity growth of 4.5 percent and create 2,000 new jobs by 2020. The plan also aimed to develop Singapore into a leading Asia food and nutrition hub by 2025.
Singapore’s food manufacturing sector seems to be on track with the ITM. Even during COVID-19 from April to October 2020, about 6,700 job opportunities were created, of which 44 percent were for PMETs (professional, managerial, executive, and technical). All this is to show that Singapore is home to a thriving food manufacturing industry. Food manufacturing in Singapore is no longer a sunset industry.
Trends and opportunities in the food manufacturing industry
a) Elderly-friendly food
Enterprise Singapore, a government agency, has identified elderly-friendly food as a food trend for Singapore, unsurprising with the nation’s aging population. It is estimated that by 2050, one in five people globally will be aged 60 and above. One in four Singaporeans are expected to be aged 65 and above by 2030.
While food innovation has found alternative protein in the form of insects, cell-grown meat, and plant proteins, such new food categories may have less appeal for the elderly. The elderly will likely prefer traditional food but may be limited by mobility when it comes to cooking or seeking out their favourite foods. Food manufacturers will therefore have to innovate to create meals which are convenient, contain adequate nutrition, and retain the appropriate texture or tastes to suit the palates of this growing segment of the population.
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b) Food health
Individuals today are more selective about the food we consume and are willing to pay more for food regarded as more nutritious or healthy. In 2020, the global market for Health and Wellness Foods was estimated at US$764.2 billion despite the global impact of COVID-19. This figure is projected to reach a revised US$1.1 trillion by 2027, according to Business Wire. As consumers seek out fast, healthy, and all-encompassing alternatives, the demand for healthy functional food ingredients will capture the industry’s attention.
Plant-based foods is one of the new food categories to emerge because of the interest in healthy food. Perceived as healthier, plant-based products are occupying more real estate in supermarket shelves and freezers. Globally, there is an increase in plant-based options even among fast food chains.
In the United States (US), meat alternative sales were up and averaged 150 percent growth between January to July 2020 during the pandemic, according to Nielsen’s data gathered by FoodDive. The plant-based meat market is worth over US$900 million in the US alone.
Plant-based meat sales grew much faster than conventional counterparts
As we try to look into the crystal ball, perhaps Mike Wystrach, Founder & CEO of Freshly (a prepared meals provider) can give us an idea of what to expect. He said: “…. consumers will continue to place more of an emphasis on maintaining a ‘plant-forward’ diet, instead of following a strict plant-based one. We will see more people opt for the age-old option of following plant-based eating principles, versus going completely vegetarian or vegan to fuel active lifestyles, support weight loss, or achieve other health and fitness related ambitions at home.”
2022 is expected to be another strong year for plant-based food manufacturers.
c) Food safety
Relatedly, the search for healthy ingredients means that transparency is essential to earn customer trust, resulting in “clean labels”. Consumers now want to what is in their food, how it is made, where it is made from and whom it is made by. The inability to access such information, may result in consumers intentionally avoiding the purchase of the product. With everything a simple search away, food products are increasingly compelled to display clean labels, and coming back full circle, manufacturers are pressured to create high-quality products that do not adversely impact health.
What about food safety? When various countries implemented lockdowns, the spotlight was on the food industry as one of the essential industries, forcing the food industry to endure tight restrictions and precautions. A high standard of safety while reducing COVID-19 transmissions through food was expected. Even as the world learns to live with COVID-19, food manufacturers should expect a string of tougher assessment criteria, born from the pandemic’s experiences.
d) Food security and a growing urban population
The world’s population grew by 56.2 percent in 2020, up from 55.7 percent in 2019. The global demand for food is correspondingly increasing with population growth. Singapore imports about 90 percent of our food to feed the nation, according to the Singapore Food Agency. With 90 percent of the nation’s food being imported, Singapore is exceptionally vulnerable to changes in global food supply, supply chain delays and price fluctuations. When Singapore was hit by COVID-19, it wanted to reduce its dependency on food imports and aimed to produce for 30 percent of local nutritional needs by the year 2030. To this end, land-scarce Singapore, looked to increase the number of rooftop farms as one of the measures.
In 2019, the government worked with an urban farming firm to construct a 1,800-square-meter farm on top of a multi-storey carpark. Following its success, nine multi-storey carpark rooftops were slated to be converted to farm vegetables and other crops in 2020. In 2021, further tenders were awarded for seven other farming sites on HDB (Housing Development Board) carpark rooftops.
Singapore also introduced initiatives to boost interest in farming. In April 2020, a $30 million fund was launched to help the local industry to ramp up production of fish, eggs and vegetables.
A survey by the International Food Information Council in 2019 found that 54 percent of the respondents believe that sustainability is very or somewhat important. The desire to help the environment will bring about more earth-friendly food processing and packaging. Businesses which have gone green will have a competitive edge to win loyal customers and build profits as consumers are willing to pay more to go green.
In a time when the world grappled with COVID-19, the use of plastic packaging was rife, driven by worries over virus contamination. However, with vaccines becoming increasingly available, the world should turn its attention back to sustainability issues soon. February 2021 saw the announcement of the Singapore Green Plan 2030, which is a whole-of-nation movement to advance Singapore’s national agenda on sustainable development.
With the plethora of environmental massages on various platforms, consumers are more attentive to sustainability practices. The food manufacturing industry should be prepared for the spotlight.
Challenges facing Singapore’s food manufacturing industry and the solutions
We have established that food production is an important part of Singapore’s economy. However, the food manufacturing industry in Singapore faces a few challenges. These challenges include high labour cost, lack of skilled workers, and the increasing competition from neighbouring countries.
Wages in Singapore are among the highest in the world, which is a major challenge for the food manufacturers. In addition, the rising salary thresholds for new Employment pass and S-pass holders announced in the Singapore Budget 2022 will surely be an additional burden.
The lack of skilled workers was also identified as a challenge by the Ministry of Manpower of Singapore (MOM), which then implemented various Workforce Singapore (WSG) programmes. In September 2020, MOM announced that more than 1,800 people found jobs or took on training roles in the food sector through WSG programmes. In the food manufacturing sub-sector, many mid-career changers were from the financial and insurance sector and other sub-sectors of the food manufacturing and wholesale trade.
Our Business Sentiment Survey also showed that training is corelated with a company’s profitability.
READ MORE: Business Sentiments of Singapore Companies on the Singapore Economy and Industries in FY21 Q3
While there are many different solutions to help the food manufacturing industry overcome these challenges, we will focus on one overarching solution, which is the use of technology, and parse out some of the different layers. It should be said that technology is not a magic bullet. However, the adoption of technology does pose a viable solution that is able to meet the mentioned challenges to varying degrees.
Leverage on technology
COVID-19 has taught businesses to adapt to survive. Some use cases of innovation include, the integration of virtual and physical spaces, the use of blockchain to better trace supplies and prevent fraud, augmented restaurant menus, or cultured meat. Farmers, manufacturers, and distributors along the chain will have to leverage technology to drive their businesses onward.
a) Digital food management
Tools such as advanced food manufacturing and management solutions may help manage or even reduce costs in the long term. Artificial intelligence, robotics, and big data analytics, enable real-time monitoring and digital food management from farm to table. Food management solutions can help optimise the processes and supply chain operations by analysing customer behaviour, forecast demand using real-time data, track the age of the stock, its location, custom recipes, and how products are selling. Such business intelligence data will help producers accurately control costs, make adjustments based on emerging trends, better understand market requirements, predict disruptions, and manage surplus food.
b) Automation and robotics
Flowing from the data from food management and management solutions would be to use that information to automate processes. Anything that helps automate, monitor, and analyse key processes, such as inventory management, to maintain visibility over operations and mitigate the risk of excess shrinkage will be a key investment for food manufacturers to consider in 2022 and beyond.
Integrating robotics into the entire value chain to improve efficiency, consistency, and scale during food manufacturing is becoming increasingly common. Some examples include robotic chefs and food processing robots, autonomous drones and vehicles which are emerging to be viable substitutes for manual delivery services, as well as drones and other food handling robots at warehouses and grocery stores which enable fast and cost-effective food tagging and monitoring.
In addition, food producers are implementing a remarkable number of Internet of Things (IoT) applications. IoT enables food producers to ensure high levels of traceability, food safety and, accountability all through the farm-to-plate operations. With COVID-19, one of the major benefits of IoT in the food industry has been to considerably diminish the risk of food illness transmission. Different sensors are used to monitor vital production states, shipping time and temperature. Real-time temperature sensors allow for close supervision of food safety data points, ensuring effective cold chain management, while reducing human interaction, contamination, and error.
COVID-19 has pushed businesses to use digital platforms. Many Singapore food businesses now offer delivery services and reach customers through direct-to-customer (D2C) distribution. In addition, the safety concerns during the pandemic saw the growth of ghost or cloud kitchens in Singapore and Asia that offer only food takeout and deliveries. Food & beverage eCommerce helps food manufacturers better reach their customers, increase market presence and ensure availability.
d) Food waste reduction
As sustainability is one of the food production trends, we would be remiss not to explore how technology may help in this area. Food waste is one of the biggest waste streams in Singapore and it has grown by about 20 percent in the last decade. Tackling food wastage is an important component of meeting the challenge of food insecurity, minimising Singapore’s environmental footprint and saving costs. There is a paradigm shift from food waste reduction to zero waste approaches in food manufacturing, where food monitoring solutions help producers, restauranteurs, and smart cities reduce food waste.
An example of using technology to reduce waste in Singapore is Lumitics. This IoT start-up uses their proprietary AI-based image recognition technology to provide hotels and large commercial kitchens with data analytics to understand their food waste generation. Lumitics’ clients are thus empowered by the data to reduce their food waste, costs, and environmental footprint.
Resources for the food manufacturing industry
The future of the food manufacturing industry in Singapore is promising, with more investments being made in innovation and technology. Singapore has also been pushing for various industries to digitalise and adopt new technologies. In particular, companies in the industry may find relevant resources via the Food Manufacturing Industry Digital Plan website.
A useful summary can be found here: Food Manufacturing Industry Digital Plan Fact Sheet. Companies may also use a self-assessment checklist to find out how ready your business is digitally, and what steps to take going forward.
Besides the digital plan website, which is focused on digitalisation, businesses may also find other support schemes in the areas of hiring, training, financial, and marketing.
READ ALSO: Resources page
Enterprise Singapore. Food Manufacturing: Industry Profile. Retrieved from:
Ministry of Trade and Industry. (2022, February 17). MTI Maintains 2022 GDP Growth Forecast at “3.0 to 5.0 Per Cent”. Singapore Department of Statistics. Retrieved from: https://www.singstat.gov.sg/-/media/files/news/gdp4q2021.pdf
Linchpin, T. (2022, February 12). Trends In The Food Products Manufacturing Industry In 2022. Linchpin SEO, LLC. Retrieved from: https://hospitalityinsights.ehl.edu/hospitality-industry
Minchin, J. (2021, January 7). Seven challenges and trends the food industry can expect in 2021. New Food. Retrieved from: https://www.newfoodmagazine.com/article/129788/trends-and-challenges-2021/
Melanie. (2021, February 10). 10 Global Food Processing Industry Trends for 2022. Unleashed Software. Retrieved from: https://www.unleashedsoftware.com/blog/10-global-food-processing-industry-trends-for-2022