Food companies need to collaborate more and set industry benchmarks

TODAY, the food and beverage industry in Singapore consists of more than 6,500 establishments and approximately 750 companies in its food-processing sector. Beyond supermarkets, restaurants and retail stores selling final food products, there is a whole supply chain of companies spanning production, packaging and distribution, which depend on having a solid reputation and need to build trust in their brands to succeed.

Each year, Singaporeans spend up to S$7.7 billion on eating out. Today’s consumers are more well-informed and affluent, and expect the food they consume to be safe and of high quality; food scandals have hit the headlines, and recent cases of food-product recalls in Singapore have raised doubts in the minds of consumers, making food trust an important determinant of a food business’s success, locally and globally.

Food trust goes beyond food safety and security. At its core, food trust builds confidence in consumers in a company’s brand of food. From a business and operations perspective, companies should aim to adopt an approach that includes stringent analysis of supply constraints and risks and to look into areas where food-trust issues could arise; they need to create greater traceability, quality and transparency throughout the food chain from the point of sourcing to the final point of sale.

When consumers, regulators and the public at large trust in a brand, there is a positive effect on loyalty, revenue and competitiveness. It also enhances a food company’s ability to respond to incidents and tackle them efficiently.

But there is a challenge for Singapore, which imports more than 90 per cent of the food consumed. For efficiency, it is common for global food companies to have operations extended offshore or outsourced.

While globalisation has enabled food companies to resolve issues such as manpower shortage and the high costs of production, the increasingly complex supply chains have conversely exacerbated food risks.

Encouragingly, Singapore ranks second on the Global Food Security Index , having one of the world’s safest and highest-quality food supply systems in the world.

The trust associated with food produced or distributed through Singapore can be a strong asset for Singapore food companies. This will serve as a strong and clear differentiating point that local food companies can use when competing with rivals in the region and beyond at the global market place.

Singapore’s Finance Minister Heng Swee Keat advocated in the 2016 Budget that trust and confidence must be built up among all players for an industry-level transformation. Competition is both rife and healthy, but it would be beneficial to the industry as a whole to approach food trust and safety in a collaborative way.

Sharing of best practices

For example, a collaborative platform (as an online community or in other forms) for the industry can be set up to promote the sharing of best practices for efficiency and innovation to spur the development of creative solutions and to promote more collaboration within the industry.

Already, a small number of Singapore Food Manufacturers’ Association (SFMA) members come together to collaborate informally; it may be worth exploring the possibility of formalising such an arrangement industry-wide.

With the Ministry of Trade and Industry Singapore now working to drive 30 Collaborative Industry Projects (CIP) over the next three years, now is the right time to collaborate .

Singapore’s push to become the world’s first smart nation can be harnessed by the food industry by leveraging technology and innovation.

The food of tomorrow must address greater problems than filling stomachs. With a growing ageing population and a worrying rise in obesity and diabetes (likely to affect one in three Singaporeans and predicted to cost Singapore S$1billion each year in the near future) , consumers are getting increasingly conscious about what they eat and how to use food both as a prevention and a cure. There are clear opportunities for local food companies to develop a competitive edge by coming up with new food solutions.

On the retail front, the Internet of Things can enable health-conscious consumers to make the right food choices via mobile devices or other health wearables in supermarkets or other food-retail outlets.

There are opportunities in back end or supply-chain functions too; the safety and quality of pre-packaged food or ingredients can be made easier to monitor through technologically-enabled solutions such as colour-changing labels which automatically signal when food is of unacceptable quality or past the point of being fit for consumption.

The current dependence on expiry dates to manage food safety is both complicated and time-consuming, and often leads to confusion on the part of the consumer. Technology has opened up an abundance of possibilities. To be at the forefront, innovation within the industry is key.

While Singapore’s food industry is currently trusted for safety and quality, food trust is an on-going commitment which can be diminished easily if no continual efforts are proactively taken to maintain it. When brand value is reinforced and food trust is attained, local food businesses will have an real edge when competing to enter or grow in foreign markets.

Food companies that step forward to set new benchmarking standards for the industry are likely to benefit most – and this could determine the both the industry’s and individual business’s current and future foothold in the global market.

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