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SINGAPORE: Some segments of the food and beverage (F&B) sector are still experiencing a slow recovery amid the COVID-19 pandemic, Trade and Industry Minister Chan Chun Sing said, reiterating the need for F&B companies transform and diversify your sources of income.
“Recovery remains slow for some segments, including outlets in the central business district and tourism-focused areas, as well as catering companies,” he said in prepared remarks on Monday (November 30) after visit Swee Choon dim sum restaurant in Jalan Besar. .
Despite this, Mr. Chan noted that many foodservice companies are “on a steady recovery path,” with revenues of about 70 to 80 percent of pre-pandemic sales.
“To take advantage of business opportunities in the new operating environment, F&B companies must embark on transformation efforts to diversify into new revenue streams,” he added.
“Companies must accelerate their efforts in digitization, productivity, innovation and internationalization to remain competitive.
“They also need to continue to develop their human capital capabilities through, for example, training and job redesign efforts to support their business transformation needs.”
READ: Singapore F&B and Retail Sales Drop Again in September
The companies that have done the best are those that “quickly” moved from a physical store concept to digital strategies, compared to others that “may be slower” to do so, Chan told reporters.
“Those who have done well are not waiting for COVID to fall apart. Those who have done well are laying the foundation now in the midst of COVID for their recovery,” he said.
“Use the COVID crisis, turn it into an opportunity, ask ourselves: How can we continue to serve customers? Because if we can serve customers during a COVID situation, then we certainly must be able to serve customers even better after the situation. of COVID.
“And when the rest of the world is playing defensively and consolidating, we are constantly on the lookout, to see how we can expand our market presence and serve more customers even beyond Singapore, beyond COVID.”
This is because total A&B sales fell almost 30 percent year-on-year in September, mainly due to low demand for event catering. The food services sector accounts for 1.1 percent of Singapore’s gross domestic product and employs approximately 5.5 percent of its workforce.
DIGITALIZATION OPERATIONS
COVID-19 has accelerated digital adoption in the food and beverage sector, Chan said, with companies using digital tools to operate more efficiently and effectively. For example, more businesses have turned to online food delivery services, he said.
The percentage of F & B’s online sales over total industry sales rose from 9.8 percent in January to 44.6 percent in May, when the “circuit breaker” was in place, he said. The current figure is still higher than pre-breaker levels, at 20.4% in September.
OBSERVE: COVID-19 accelerates digitization and transformation of some companies
The F&B industry has also shown “great interest” in adopting IT solutions under the Productivity Solutions Grant, Chan said, with more than 2,700 applications from January to October. This is four times the number of applications in the same period last year.
“Companies like Swee Choon that adapted quickly have been able to reap the rewards of pioneering,” Chan said, noting that it changed quickly online after profits fell about 40 percent during the breaker inception.
“Swee Choon accelerated digital marketing and leveraged additional food delivery platforms such as FoodPanda and Deliveroo. Enterprise Singapore has also supported Swee Choon with its food delivery booster package to subsidize delivery costs. “
The package has helped more than 13,000 F&B establishments reduce the business costs of listing on food delivery platforms to diversify revenues and build capabilities.
READ: Comment: The biggest restructuring exercise facing Singapore companies has just started
These efforts helped Swee Choon increase food delivery sales “significantly,” Chan said, from less than 1 percent to about 60 percent of his existing average monthly income during the breaker.
“With rising food delivery revenue, Swee Choon raises its overall revenue to pre-COVID level amid seating capacity restrictions due to secure management measures,” he added.
REDESIGN JOBS
As F&B companies further digitize and automate their processes, Chan said they have the opportunity to redesign jobs and make these roles more attractive to locals, reducing the sector’s reliance on foreign labor.
The minister noted how Swee Choon’s digitization of its procurement and inventory systems through a cloud-based platform helped streamline processes and create job redesign opportunities.
READ: No takers in 1,000 F&B jobs, says restaurant association
“Chefs and kitchen assistants, for example, no longer need to call or text multiple vendors to place orders, as orders can be submitted digitally through mobile apps, where purchase orders would be automatically consolidated. “, said.
“The man-hours saved have allowed their employees to spend more time on research and development on their core job and provided them with more favorable working conditions. Otherwise, the back-of-house employees would have experienced a heavy workload. “
In mid-November, Chan said that more than 1,100 workers from more than 30 companies had completed or are in the process of retraining through Workforce Singapore’s job retraining program for food services, which began in April.
SkillsFuture Singapore also provides enhanced subsidies for course fees and absentee payroll for short or modular courses on culinary arts, process innovation, cost and quality control, as well as digital marketing.
NEW BUSINESS MODELS
Beyond leveraging government schemes to develop digital marketing and digital technology capabilities, Chan encouraged food and beverage companies to test new business models, innovate, and capture growth opportunities.
This includes installation in central kitchens around Singapore as a mode of expansion and innovative products to diversify revenues and create opportunities for export, he said.
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For example, Swee Choon uses a cloud kitchen to serve more customers and reduce deliveries, and has developed a new line of frozen dim sum products to sell on its website and e-commerce platforms.
Chan said F&B companies can leverage FoodInnovate, a multi-agency initiative led by Enteprise Singapore, to leverage knowledge and infrastructure resources to drive food technology and innovations.
“This shows that there are still growth opportunities for F&B companies that are willing and able to adapt, transform, revise their business models and product offerings,” he added.
While Chan acknowledged that the road to recovery in the food and beverage sector could be challenging, he said companies, regardless of size, can take advantage of new growth opportunities.
“By transforming, innovating and developing new capabilities, I am confident that our F&B sector can remain competitive and emerge stronger when the situation improves,” he said.
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