Market Overview – Singapore

Country profile

Singapore is a highly developed and open economy that has experienced consistent growth over the past few decades. As a major global financial hub, Singapore has established itself as a key player in international trade and investment. The country's strong emphasis on free trade and economic liberalization has helped to attract foreign investment and foster a business-friendly environment. In recent years, Singapore has focused on diversifying its economy and developing new sectors such as biotechnology, healthcare, and education. Despite the challenges posed by the COVID-19 pandemic, Singapore's economy has remained resilient due to its strong fundamentals and effective government response.

According to data from the World Bank, Singapore's gross domestic product (GDP) was $366.8 billion in 2020, with a growth rate of −5.8% due to the impact of COVID-19. However, the country's GDP is projected to recover and grow at a rate of 4.7% in 2021. Singapore's trade sector remains a key driver of economic growth, with exports accounting for more than 170% of the country's GDP.

Production

Singapore's agricultural sector is relatively small due to the country's limited land area and the production volumes of crops are relatively low. The following table for Singapore displays data on the production of five primary crops over a period of five years, from 2017 to 2021. The data shows that Spinach was the most produced crop in all five years, with production increasing slightly over the years. In contrast, Lettuce and chicory had the highest decline in production, with a CAGR of −11.57% over the period. Mushrooms and truffles showed the highest positive growth, with a CAGR of 30.86%, while the other crops remained relatively stable, with modest declines or increases in production.

Chickens is the most produced type of meat, with 80,839.7 tons produced in 2021. However, its production has been declining at a CAGR of −3.45%. In contrast, pig production has experienced a slight increase in production, reaching 31,251.0 tons in 2021 with a CAGR of 2.12%. The production of ducks has been relatively stable, with a CAGR of 4.83%. Edible offal of pigs and fat of pigs have also seen a slight increase in production with a CAGR of 2.13% and 1.89%, respectively. Overall, the data suggests that the production of meat in Singapore has been relatively stable, with some types of meat experiencing slight fluctuations in production.

In 2021, stocks of Singapore livestock were dominated by chickens, with 3,895 thousand head in 2021, followed by goats with 741 head and cattle with 174 head. The GACR for chickens was 5.9%, indicating a steady increase in the population of chickens over the years. The GACR for goats was 8.2%, showing a relatively faster growth rate compared to chickens. However, the growth rate for cattle was −2.8%, suggesting a decline in the cattle population over the years.

Trade

In 2022, Singapore was a net importer of agri-food and seafood products, a trade deficit of US$14.7 billion. Animal or vegetable fats were the top imported commodity in Singapore, valued at $1376.6 million, with China being the largest supplier, holding a 35.5% market share. The second-largest imported commodity was spirits obtained by distilling grape wine or grape marc, with an import value of $868.6 million, and France being the dominant supplier with a 99.2% market share. Fats of bovine animals, sheep, or goats followed closely behind with an import value of $758.1 million, with Australia being the largest supplier, holding a 40.2% market share. The top five imported commodities also included food preparations, whiskies, wine of fresh grapes (excluding sparkling wine), and sparkling wine of fresh grapes. Overall, the table suggests that Singapore heavily relies on imported agri-food and seafood products, with the top three imported commodities alone accounting for more than $2.9 billion in imports.

Singapore's top three trading partners in 2022 were Malaysia, China, and France. Malaysia continued to be Singapore's largest trading partner with a 16.0% share, followed by China with a 9.9% share, and France with a 9.6% share. In 2022, Singapore's total trade reached Can$17.6 billion, with a Compound Annual Growth Rate (CAGR) of 6.6% from 2018 to 2022. Singapore's trade relationship with Malaysia, China, and France remained steady over the past years, reflecting the importance of these partnerships in driving Singapore's economy.

On the other hand, Canada's trade relationship with Singapore saw a positive trend from 2018 to 2022. Canada ranked 19th in 2018 with a trade value of Can$82.6 million, which increased to Can$142.6 million in 2022, ranking 11th. This represents a CAGR of 14.6% over the past five years, indicating a growing trade relationship between Canada and Singapore. Despite this positive trend, Canada's share in Singapore's trade remained relatively low at 0.8% in 2022.

Singapore's top agri-food imports from Canada include animal or vegetable fats and oils, soya beans, wheat and meslin, and frozen lobsters. The largest category is animal or vegetable fats and oils, which saw a significant increase from US$7 million in 2018 to US$56 million in 2022. Soya beans and wheat and meslin have remained relatively stable, with exports ranging from US$5 million to US$13 million over the same period. Frozen lobsters, on the other hand, have seen a notable increase from US$2 million in 2020 to US$6 million in 2022. These figures suggest that there is potential for Canada to expand its agri-food exports to Singapore, particularly in the areas of animal or vegetable fats and oils, as well as frozen seafood products.

Processed food

Singapore's top 10 processed food and beverage imports from the world are dominated by alcoholic beverages, with spirits obtained by distilling grape wine or grape marc, whiskies, and wine of fresh grapes being the top three products in 2022. Despite a slight decrease in 2020 due to the pandemic, the total value of imports has been steadily increasing at a CAGR of 6.4% from 2018 to 2022. The fastest growing section is frozen cuts and edible offal of fowls of the species gallus domesticus, with a CAGR of 14.7%, which shows Singaporeans' increasing appetite for chicken meat. Meanwhile, the lowest growth section is frozen meat of swine, with a CAGR of only 3.6%, indicating that demand for pork in Singapore has been relatively stable. Overall, this data suggests that Singaporeans have a strong demand for processed food and beverage products, especially alcoholic beverages, and that there is potential for exporters to tap into this market.

Total volume sales of alcoholic drinks in Singapore had a positive performance in 2021. With an increasing focus on health and wellness since the pandemic, Singaporeans have shown interest in non/low alcohol options and drinks low in sugar and calories. In response to this trend, many alcoholic beverage companies have launched new products with low ABV and calorie content, particularly targeting millennials and older Generation Z consumers. Examples of this include Heineken 0.0 in non-alcoholic beer and Zaffer, a New Zealand-based cider brand, introducing unique flavors and non-alcoholic options (Euromonitor International, 2023).

Furthermore, local consumers have been searching for new experiences and innovations as a way to distract themselves from home seclusion, especially since they cannot travel outside the country. Younger generations of adults are particularly interested in experimenting and are willing to pay more for new experiences. Therefore, both international and local companies have started to develop innovative and interesting flavors of alcoholic drinks to attract this target audience. The 1925 Brewing Co, for example, drew inspiration from Asian ingredients and culture to create craft beer flavors that complement Asian food. Their King's Garden Ale was even relaunched in 2021 as the first tea beer brewed to pair with local dish Bak Kut Teh (Euromonitor International, 2023).

In 2022, the unit price of shelf stable fruit and vegetables grew by 4%, while frozen variants only increased by 3%. Despite being traditionally considered a more affordable option than fresh produce, the growing costs of packaging and processing for shelf stable options, due to a shortage of energy and raw materials for canning, have led to the price hikes. As a result, local consumers are not seeing the advantage of switching to shelf stable fruit and vegetables and perceive a compromise in quality for comparable prices. Consequently, retail volume has declined for the second consecutive year. Some imported brands are introducing frozen processed vegetable mixes, which offer consumers the value of ingredient curation and convenient portioning and are used for local delicacies (Euromonitor International, 2023).

Processed meat, seafood, and alternatives to meat recorded the highest growth in unit price in 2022, with baked goods being closely behind. The cost of processed meat and seafood has also been impacted by the energy crunch, resulting in more expensive animal feed, processing, packaging, and transportation, as well as the cold logistics required for chilled and frozen processed meat options. Seafood has been particularly affected by weather and climate, as Malaysia, Singapore's largest neighboring supplier, experienced more thunderstorms in 2022 than in previous years, leading to greater costs for the fishing industry. Additionally, rising temperatures have increased water acidity, resulting in the growth of marine fungi and bacteria, which has led to fish mortality (Euromonitor International, 2023).

Malaysia was the largest exporter to Singapore in 2022, followed by France and the United States. The total import value of processed food and beverages has increased steadily from 2018 to 2022, with a compound annual growth rate of 6.4%. The fastest growing exporters to Singapore in this category were Brazil and Malaysia, with compound annual growth rates of 13.6% and 8.3%.

Canada ranks 25th among the top 10 processed food and beverage importers to Singapore, with an import value of only US$54 million in 2022. Although the import value has increased slightly from 2018 to 2022, Canada's compound annual growth rate of 4.7% is relatively low compared to other countries.

Packaged food retail sales

In 2021, Singapore saw a total of US$3.0 billion in retail sales of packaged foods, a figure which rose at a CAGR of 4.3% from 2018-2022. Growth is expected to accelerate to a CAGR of 3.9% from 2021-2026, and total sales are forecast to reach US$3.7 billion in 2027.

The largest category of packaged food retail sales was staple foods, which saw sales of US$1.2 billion, accounting for 39.4% of the market in 2022. The largest subcategory was baked goods, which accounted for 45.6% of staple food sales and 12.8% of total packaged food sales. From 2018-2022, Plant-based Dairy were the subcategory which enjoyed the fastest growth rate (CAGR 10.6%), followed by Processed Meat, Seafood and Alternatives to Meat (CAGR 6.4%). From 2023-2027, Dairy Products and Alternatives is forecast to lead the market in growth, with growth occurring at a CAGR of 4.3%.

Health and wellness retail sales

Total health and wellness retail sales in Singapore reached US$1.2 billion in 2022, up from US$1.0 billion in 2018, with a CAGR of 3.8% from 2018 to 2022. The sector is expected to continue growing with an accelerated CAGR of 3.7% from 2023 to 2026. Naturally healthy products dominated the market, accounting for 23.2% of total sales in 2022.

In terms of specific categories, Better For You (BFY) products had the highest growth rate with a CAGR of 9.0% from 2018 to 2022, and are expected to grow at a CAGR of 5.4% from 2023 to 2026. Better For You Beverages saw the most significant growth with a CAGR of 14.4% from 2018 to 2022 and is expected to continue growing at a CAGR of 7.7% from 2023 to 2026.

Due to the pandemic, snacking at home became a trend in 2020, with consumers shifting towards healthier options. This led to higher growth in retail volume and value for Naturally Healthy (NH) nuts, seeds, and trail mixes. However, with income concerns in 2021, consumers consumed snacks less frequently, leading to a marginal decline in sales. In 2020, consumers also turned to home cooking due to the closure of foodservice dining options. This resulted in greater growth in sales for cooking ingredients such as NH olive oil and honey. However, with government measures encouraging consumption of food and beverages outside the home in 2021, sales of cooking ingredients are expected to decline slightly, although NH olive oil and honey are likely to continue to see positive performances. The forecast period offers an opportunity for mass-market NH packaged bread producers to see steady growth due to consumers prioritizing healthier yet affordable products (Euromonitor International, 2023).

Foodservice

In 2022, Singapore's COVID-19 vaccination strategy focused on administering booster shots every few months, keeping the community safe and infection numbers under control. As a result, dine-in measures were progressively eased, all workplace restrictions and social distancing were removed, and border measures were eased, attracting an influx of inbound tourists. The consumer foodservice industry witnessed strong growth due to pent-up demand for better dining experiences amongst locals. Growth was uneven across different areas and channels, with foodservice outlets situated in tourist-related areas witnessing the strongest growth (Euromonitor International, 2023).

The category of Consumer Foodservice had retail sales of $8,647.7 million in 2022, with a compound annual growth rate (CAGR) of −1.4% between 2018-2022. Independent Consumer Foodservice had a market share of 71.6% in 2018, with retail sales of $6,313.3 million, but experienced a decline in sales, with retail sales of $5,818.4 million in 2022 and a CAGR of −2.0%. In contrast, Limited-Service Restaurants had a market share of 12.5% in 2018, with retail sales of $1,147.2 million, and experienced a growth in sales, with retail sales of $1,275.3 million in 2022 and a CAGR of 2.7%.

Among the different locations, consumer foodservice through retail had the highest sales with a total value of 4,819.2 million in 2018, which increased to 4,409.5 million in 2022. This segment experienced a negative CAGR of 1.3% during the same period. Consumer foodservice through leisure and lodging experienced negative growth during 2018-2022 with a CAGR of −6.0% and −5.0%, respectively. However, consumer foodservice through standalone had a slightly better performance with a negative CAGR of −0.9%.

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Resources

• FAOSTAT Agricultural Production, 2023
• Euromonitor International, 2023
• Global Trade Tracker, 2023

Market Overview – Singapore
Global Analysis Report

Prepared by: Rouzbeh Parsi, Student (co-op)

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