The Food Industry – A Strong Contributor to Singapore's Economy

SINGAPORE – Singapore’s food and beverage industry contributes an estimated S$14.4 billion to GDP and employs nearly 300,000 people, a report released today by Food Industry Asia (FIA) shows.

The report, entitled “The Economic Impact of the Food Industry in Singapore,” reveals that the food industry’s total contribution to the economy is much higher than the food manufacturing sector’s S$3.2 billion share of GDP, once related activities such as logistics, distribution, retail and hospitality are taken into consideration.

The report also highlights ongoing research and development (R&D) in areas such as nutrition, flavours and food packaging, which form part of the broader food industry ecosystem in Singapore.

Oxford Economics produced the report for FIA, using information collected in 2014, the latest year for which full economic data was available.

Oxford Economics calculated the contribution of the food and non-alcoholic beverage industry to the Singapore economy by looking at three areas: i) food manufacturers’ contributions to gross domestic product (GDP), employment, tax receipts and the Central Provident Fund (CPF); ii) the value-added contributions by companies involved in the distribution of food, such as wholesalers, retailers and restaurants across the same metrics; and iii) the wider economic impact through activities such as R&D, education and training.

Fig. 1. The total economic contribution of the Singapore food industry, 2014


For instance, many companies have set up regional R&D hubs in Singapore to create healthier, safer and more environmentally friendly products. They also provide various skills development programmes to help build the capabilities of the local labour force.

The Oxford Economics report provides a comprehensive account of how the food industry contributes to Singapore’s economic activity, as well as to the nation’s status as a centre of advanced food manufacturing and a hub for economic, social and sustainable development.

“The findings from the Oxford Economics study show that companies in the food industry lead a range of initiatives to provide skills development for their workforces through education and training programmes, drive sustainable development activities to reduce waste and water usage, and promote healthier lifestyles amongst their workforces and the wider population,” explained Matt Kovac, Executive Director of FIA.

Other key findings from the final report of “The Economic Impact of the Food Industry in Singapore” include:

• The overall impact of the food industry is dominated by food distribution. The wholesale and retail of food, along with activities linked to Singapore’s 6,700 food service locations (which include restaurants, coffee shops and street hawker stands) account for two-thirds of the food industry’s GDP contribution, and four-fifths of the employment it supports.

• The food manufacturing industry directly supports 38,800 jobs and makes a S$3.2 billion contribution to GDP. Including the multiplier impacts of supply chain spending and the consumer spending impacts that occur as employees spend their wages, the manufacturing contribution increases to 58,000 jobs and S$4.8 billion in GDP.

• In 2014, the food manufacturing industry earned S$9.8 billion from sales in Singapore. From those sales, and after accounting for input costs, the industry made a sizeable contribution to Singapore’s GDP of S$3.2 billion.

• Food manufacturers’ supply chain spending within Singapore supported S$1.6 billion of domestic procurement, S$610 million of GDP, 6,100 jobs, S$31 million in tax revenues, and S$37 million in CPF contributions in 2014.

• Based on the report’s findings, the food manufacturing industry is equivalent in size to Singapore’s aerospace industry, and larger than industries such as speciality chemicals, petrochemicals, medical technology and land transport engineering.

Quantitative research carried out by Oxford Economics revealed that a number of companies reported that Singapore is the leading location for consumer goods firms in South East Asia, in terms of geographical location, connectivity, political stability and the availability of skills. Over half of the survey respondents reported that they undertake R&D activity in Singapore. Firms explained that these activities often focus on the development and testing of new products, as well as market research into consumer preferences and emerging trends. The benefits generated by this work include healthier and safer products, less resource-intensive packaging, and reductions in energy and water use.

“It is very encouraging to see that the food industry is also making a sizeable contribution to support Singapore’s status as a centre for advanced manufacturing, by investing and setting up R&D facilities in the country,” said Kovac.

“The Economic Impact of the Food Industry in Singapore” study provides a robust assessment of the economic contribution of the food and non-alcoholic beverage industry in Singapore. It assesses the core economic impact of food manufacturing, as well as the activity supported by the companies who convey, distribute and prepare food for consumers throughout Singapore, such as wholesalers, retailers and restaurants. It also explores some of the wider effects of the food industry’s activities in supporting productivity and wellbeing in Singapore.

Click here to download the "The Economic Impact of the Food Industry in Singapore" report and here for an infographic providing a snapshot of the report's key findings.

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Media contact:

Steven Bartholomeusz / Amelia Chong
Food Industry Asia
T: +65 6235 3854
steven.bartholomeusz@foodindustry.asia / amelia.chong@foodindustry.asia

Joy Fong
Ruder Finn Asia (PR Agency)
T: +65 6336 6742
fongj@ruderfinnasia.com

Food Industry Asia (FIA) is a non-profit organisation that was formed in 2010 to enable major food manufacturers to speak with one voice on complex issues such as health & nutrition, food safety and the harmonisation of standards. From its base in Singapore, FIA seeks to enhance the industry's role as a trusted partner and collaborator in the development of science-based policy throughout Asia. To do so means acting as a knowledge hub for Asia’s national industry associations and affiliated groups to support with their engagement of public bodies and other stakeholders across the region.

 
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