How will Singapore’s food services industry survive and thrive in 2021?
Food Services | 02 Sep 2021
Singapore Airlines, Gardens by the Bay, the garden city, the “Fine” city are all things associated with Singapore. However, Singapore is also known for being the food capital in Asia, being a melting pot of cuisine from all over the globe. Food Services is not just an essential industry, it is something close to heart of Singaporeans. For many Singaporeans, dining out is both a necessity, as well as a source of enjoyment. However, COVID-19 and the ensuing lockdowns have crippled the food services sector, especially those dependent on dine-in customers. In this article, we explore how can Singapore’s food services industry survive and thrive in 2021 and beyond.
It goes without saying that Singapore has a vibrant food scene and dining out is an integral part of daily life. The food services industry in Singapore plays a vital role in our economy, contributing 1.1% of Singapore’s gross domestic product and employing about 5.5% of Singapore’s total workforce. Our little red dot has 13,000 food and beverage (F&B) establishments, of which there are as many as 69 Michelin Star venues in 2021, spanning a mix of restaurants, street food establishments, and hawker stalls, attesting to Singaporeans’ fierce pride and passion for food.
Trends in the food services industry
Even in pre-COVID times, the food services industry was already contending with changes in consumer behaviour regarding preferences, taste, packaging, technological advancements, and regulations. Some changes in the F&B sector include:
- Consumers are starting to prefer eco-friendly products and so efforts are being made to create environmentally friendly products.
- Consumers are looking for food that is safe, natural and healthy. We see this in the proliferation and promotion of foods without added preservatives or artificial ingredients, gluten-free, non-GMO, organic, plant-based, or keto-based.
- Consumers are looking for even more convenience such as fuss-free cooking meals, or ready-to-heat meals.
- Food delivery is almost certainly here to stay, as takeaway and food delivery became necessary for survival during lockdowns and various dining restrictions. It is unlikely restaurants will be able to ignore takeaways or food delivery even with the return of dining-in.
Digital transformation in the food services industry in Singapore
Consumer behaviours are always changing and evolving, pandemic or not. Following from the recent trends that the food services industry is facing, we look at some of the transformations that companies in the F&B sector have undertaken.
Robots and machines in kitchens
The use of robots and machines ensures quality and affordability, driving down the costs of keeping food fresh and increasing productivity. These machines work at a faster pace without getting tired and help ensure safety, for example by using robots to cut the more difficult of the meats.
Ordering kiosks and online reservations
Kiosks are fast becoming a common feature in the food services industry. Chains like McDonald’s and KFC, as well as some enterprising smaller restaurants are already using ordering kiosks. In Singapore, we can even see ordering kiosks at some food courts, such as KopiTech, a food court at the Funan Mall. These kiosks allow customers to place orders and complete payment. Besides helping to ensure safety measures as human interactions are reduced, such ordering and payment systems reduce human error, increase productivity, and reduce chances of theft.
In the new normal, where dining capacity is still restricted (for now), and queuing is discouraged, reservation automation systems have also become commonplace. Such systems allow guests to see the availability and confirm the reservations directly, while helping the establishment manage the number of guests.
Eco-friendly waste and packaging
As consumers are increasingly focused on healthy meals and sustainability, brands have little choice but to keep up with this trend. Many food industries are getting help to ‘go green’ by using biodegradable packaging. This awareness has also been brought to the fore during the dining restrictions, and where all orders were packed for takeaways or deliveries.
Support for companies in the food services industry in Singapore
COVID-19 was the catalyst which showed businesses across all industries that digitalisation, innovation, and technology are necessary for survival. In Singapore, the government saw that it was critical not just to help companies tide over the challenging period, but to help businesses emerge stronger from the crisis. To this end, the government played a key role in nudging businesses to digitally transform. In food services for example, traditional hawkers were encouraged to accelerate their digitalisation efforts through on-ground visits by officers, subsidies, and support schemes. As a result, the food industry is now more readily adopting new tech and mobile applications. Listed below are some of the support schemes that businesses in the food services industry may benefit from.
In April 2017, the Infocomm Media Development Authority (IMDA) launched the SMEs Go Digital programme to help SMEs in their digital transformation journey. The SMEs Go Digital programme also helps companies use digital technologies, such as utilising the Digital Resilience Bonus, where F&B firms can get bonus pay-outs of up to $10,000.
Aligned to the Food Services Industry Transformation Map (ITM), the Food Services IDP is part of the SMEs Go Digital programme which aims to make going digital simple for SMEs. The Food Services IDP provides a step-by-step guide on the digital solutions SMEs can adopt at each stage of their growth, assess their digital readiness, identify opportunities for going digital, training to raise employees’ digital skills, and have access to resources for consultancy.
The PSG was launched in April 2018 to support businesses in their transformation journey and covers sector-specific solutions such as retail, food, and logistics. The maximum funding support level was raised from 70% to 80% from 1 April 2020 to 31 March 2022, to encourage enterprises to continue their digitalisation and productivity upgrading efforts. From January to October 2020, the number of applications for the PSG in the F&B sector was more than four times that of the same period in the previous year.
Start Digital was launched by IMDA, with Enterprise Singapore (ESG) in January 2019 to help new SMEs start right with foundational and easy-to-deploy digital solutions. All SMEs can benefit from the right foundational digital tools. In addition, the Start Digital solutions have been refreshed to include digital collaboration tools that enable remote working, digital marketing through social media, as well as integrated digital utilities like e-invoicing and e-payment.
InvoiceNow is a nationwide E-invoicing method that enables direct transmission of invoices in a structured digital format from one financial system to another. InvoiceNow uses the nationwide E-delivery network based on Peppol, which will help enterprises enjoy faster payments.
- Fintechnews Singapore. (2021, August 16). How Are SMEs in Singapore Supported on Their Digital Transformation Journey? https://fintechnews.sg/54404/digital-transformation/how-are-smes-in-singapore-supported-on-their-digital-transformation-journey
- Singh, P. S. (2021, August 16). How does digital transformation eliminate the top challenges of food industry? ETCIO.Com. https://cio.economictimes.indiatimes.com/news/corporate-news/how-does-digital-transformation-eliminate-the-top-challenges-of-food-industry/85366259
- Teo, J. T. (2021, January 22). F&B sector has evolved over the course of 2020. The Business Times. https://www.businesstimes.com.sg/opinion/fb-sector-has-evolved-over-the-course-of-2020
- Yang, C. Y. (2021, July 13). Singapore eateries get creative to cope with new normal. The Straits Times. https://www.straitstimes.com/singapore/jobs/singapore-eateries-get-creative-to-cope-with-new-normal
This article is contributed by Moses Ku, Manager (Engagement), IndSights Research.