Food and agribusiness to Singapore

Trends and opportunities

The market

Singapore imports over 90 per cent of food consumed throughout the country due to limited land available for agriculture. The nation of approximately 5.5 million people rely primarily on external sources for food supplies. This creates opportunities for international products and brands to export to Singapore, including Australia.

Australia, China, Indonesia, Malaysia and United States are Singapore’s main suppliers of food. Based on International Enterprise Singapore’s Statlink statistics, Australia was the largest supplier of beef, cheese and lamb products to Singapore in 2016. Australia was also the second largest supplier of pork, milk and cream products to Singapore.

According to Global Trade Atlas (Source: Australian Bureau of Statistics), Singapore was Australia’s tenth largest market for food, beverage and agribusiness products in 2016 with total exports valued at A$1.2 billion. Specifically for Australian wines, Singapore was the seven largest export market valued at A$73 million.

Singapore’s food and agribusiness industry can be divided into three broad segments – retail, food service and food manufacturing.

Retail

Singapore’s grocery retail sector is dominated by three supermarket chains - NTUC FairPrice, Dairy Farm International and Sheng Siong Group.

NTUC Fairprice Co-operative Ltd was founded by the labour movement in 1973, with a social mission to moderate the cost of living in Singapore. From one supermarket, it has grown to become Singapore’s largest retailer serving over half a million shoppers daily, with a network of over 130 outlets. As the leading player in grocery retailing in Singapore, NTUC FairPrice offers some of the widest range of products in the country and caters to both price-conscious and higher-income consumers through its various convenience store, supermarket and hypermarket retailing formats.

Dairy Farm International is a member of the Jardine Matheson Group and its business is managed from Hong Kong. In Singapore, they are the second largest by market share. A variety of retailers operate under Dairy Farm International in Singapore - Cold Storage and Market Place supermarkets cater to mid-range to high-end consumers, whereas Giant hypermarkets and supermarkets cater to price-sensitive consumers.

Sheng Siong Group, a home-grown company and listed on the Singapore Stock Exchange, is the third largest supermarket chain with its supermarkets catering to price-sensitive consumers. The company is expected to expand its presence and open more supermarkets in new areas.

The rest of the sector are fragmented; comprising of mom-and-pop style stores located within residential areas, and a handful of speciality retail stores carrying premium products that cater to the niche and higher-end consumers including the expatriates. Speciality stores that target the expatriate market are keen to carry sustainably-sourced, sustainably-farmed and non-GMO products. There are a number of them which are Australian-linked as well such as Little Farms, Farm ‘N Pantry and The Fishwives.

Online retailing is gaining traction particularly amongst working adults as it gives them flexibility to shop around the clock and eliminates any hassle to have their purchases delivered to their doors. RedMart is the largest online grocery retailer in Singapore, and is owned by Alibaba-backed Lazada. Amazon launched its Prime Now service in July 2017 as well, and products available on the platform include grocery.

Distribution channels

The main supermarket chains may obtain products via direct import or through local importers/distributors. When product lines are sufficiently large in volume and have fast turnovers, supermarket chains are increasingly opting to import directly.

Retailers may also have appointed consolidators in specific countries, including Australia. Exporters supplying to consolidators can deliver orders that are in smaller volumes, as compared to the direct export model.

Distribution to wet markets, hawkers, small grocery and mom-and-pop stores is usually handled by distributors and intermediary wholesalers. The larger distributors usually have their own facilities to handle perishable goods and capabilities for re-packing and distribution to their customers.

Food service

Singapore has a thriving and constantly evolving food service sector, albeit predisposed to the state of the economy. A steady stream of international visitors and the propensity of local residents to eat out keep the food service sector in Singapore vibrant. The Singapore Tourism Board reported that Singapore received 16.4 million visitors that spent on S$2.97 billion food and beverage–related products in 2016. The sector’s robustness was validated when the first Singapore Michelin Guide was launched in 2016.

According to Singapore’s Department of Statistics, there are approximately 7,260 food and beverage establishments in Singapore, including restaurants, cafes, snack bars, food courts, fast food restaurants, food caterers, etc.

Distribution channels

It is usually uncommon for food service companies, like hotels and restaurant groups, to import products themselves due to small volumes. They mostly depend on local distributors for supplies.

Food manufacturing

Singapore’s food manufacturing sector is small but efficient; according to SPRING Singapore, it is made up of 847 establishments and contributes to approximately one per cent of Singapore’s gross domestic product (GDP).

With food science and technology gaining importance in the manufacturing value chain, Singapore food manufacturing companies are investing in R&D for more first-in-the-market products and enhancing their processes and packaging for better quality products. In November 2016, the Singapore Government launched an industry transformation map for the sector, with the vision of developing Singapore into Asia’s leading food and nutrition hub. Given the limited agricultural resources, this sector is fundamentally dependent on imports for ingredients and raw materials.

Opportunities

There is market interest for the following categories:

  • dairy
  • quality meats
  • seafood
  • functional / health food
  • organic food
  • private label
  • value-added products (e.g. ready-to-eat, convenience).

Not all imported food and agribusiness products are consumed locally; with nearly 20 to 25 per cent of all imported food being re-exported to the region and beyond. Singapore is home to the regional headquarters of many global companies and has a large base of commodity traders which serve the region. As ASEAN continues to grow economically and regional markets looking to Singapore for trends and quality standards, Singapore remains a major trading and distribution hub for food and agribusiness products.

Competitive environment

Singapore has a highly developed open and trade-oriented market economy, due to relatively easy market access and minimal trade barriers. Australia’s competitive advantages in Singapore are:

  • strong brand recognition and position (‘clean and green’ reputation and high food safety standards)
  • high level of familiarity with Australia among end-consumers
  • Similar time zone
  • counter-seasonal to the northern hemisphere
  • strong sea and air connectivity between Australia and Singapore.

Supply diversification is part of the nation’s food security policy to address any potential supply interruption. Hence it is worth noting that while the market presents minimal entry barriers for Australian exporters, their products will be exposed to many global food and agribusiness brands in-market.

Tariffs, regulations and customs

Singapore has no applicable tariffs or duties on food and agribusiness products – except alcoholic beverage. They attract an excise duty, which is based on the product code and alcoholic content of the product e.g. wines attract an excise duty of S$88.00 per litre of alcohol.

Under the Singapore-Australia Free Trade Agreement (SAFTA), Australian beers, which satisfy the Rules of Origin requirements, are not predisposed to the customs duty of S$16.00 per litre of alcohol. However, the excise duty of S$60.00 per litre of alcohol is still applicable.

All goods imported into or manufactured in Singapore are subjected to seven per cent Goods and Services Tax (GST) and is applied on an ad valorem basis on all dutiable and non-dutiable goods. The GST taxable is calculated based on the Costs, Insurance and Freight (CIF) value plus all duties and other chargeable costs, whether or not shown on the invoice.

Import conditions

The Agri-food and Veterinary Authority of Singapore (AVA) is the Singapore national authority, responsible for the supply of safe food and to safeguard the health of animals and plants and facilitates agri-trade for the well-being of the nation.

Visit AVA’s commercial food imports or search the import conditions database for import conditions on any product of interest. The responsibility to ensure that food imported into Singapore is safe and meets all local regulations lies with the local importer.

Labelling

See labelling guidelines for food importers and manufacturers. An online guide to food labelling and advertisements is also available as a step-by-step guide to self-check food labels and advertisements.

Marketing your products and services

Market entry

Exporters may consider the following to have your product present in Singapore:

  • Visit the market before exporting to better understand the market opportunity, supply chain and pricing.
  • Appoint a committed importer/distributor (or agent) and work towards building a long-term relationship in order to build market share. NB: It is best to work with one dedicated partner, given the small size of the market
  • Consider the use of a qualified export packer or consolidator to export, if your volumes are too small to sell directly to an overseas importer or buyer.
  • Join forces with a producers’ association or relevant industry body for collective export marketing and logistics.
  • Attend or participate in an international trade show to meet buyers. Food and Hotel Asia, held in Singapore biennially, is the most important food show in this region.
  • Set up your own representative office in the market, to build and strengthen customer networks.

Links and industry contacts

Government resources

Agri-food & Veterinary Authority of Singapore
Health Promotion Board
Singapore Customs
SPRING Singapore

Local supermarket chains

Cold Storage (Part of Dairy Farm International)
FairPrice
Giant (Part of Dairy Farm International)
Sheng Siong

Trade events

Food and Hotel Asia

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