Ingredients in focus

DSM’s innovation expansion mirrors Singapore’s new might as a food hub

By RJ Whitehead

- Last updated on GMT

DSM’s innovation expansion mirrors Singapore’s new might as a food hub
Asia-Pacific food companies have developed a greater focus on innovating over the last few years, said DSM’s regional human nutrition head Pieter Nuboer at the opening of the company’s new nutrition innovation centre in Singapore. 

It’s a different question about how well the region is doing that, and how effective it has been, but I’ve experienced a huge willingness in Asia-Pacific to talk about innovation​,” he says.

Our customers acknowledge that there are challenges in the supply chain, and that the consumer base is fragmented, so they ask us for our help with these things​.”

The innovation centre is central to DSM’s ambitions in Asia-Pacific, and specifically southeast Asia. The ingredients company, which is part of a much wider Dutch industrials conglomerate that operates across a number of segments, began its Singapore human nutrition operation five years ago, and has since watched the city-state quickly become the company’s regional food hub.

However, DSM is not the first ingredients company to have set up a hub in Singapore, with CP Kelco and Ingredion among a number of other international companies with innovation centres on the island. 

Nuboer believes his firm has found a way to differentiate DSM from the others in its field: with its pursuit of “co-creation, innovation and stability​”, along with a symbiotic relationship with a branding agency, DSM will continue to be seen forging its own path, he says.

The co-creation policy emphasises the company’s aim to challenge local manufacturers while expecting to be challenged back by its customers.

But what happens if a new product adds up on paper, but for whatever reason is destined to fail? That’s where DSM Singapore’s partners, the Healthy Marketing Team (HMT), a European consultancy, can step in and help the customer get a better understanding of its brand, market position and consumer reception for any new launch.

DSM invites its customers to take an HMT assessment, with the consultancy assessing a product idea by its trademarked FourFactors of Success approach, which is based on 20 years of research in healthy marketing.

HMT’s analysis then allows DSM to show the impact a new product that uses its ingredients might have on the market, and how best to position it. 

It’s an exclusive partnership we have​,” says Nuboer. “HMT facilitates the brand dialogue, which is more credible when it’s done by an independent party. They are brand experts and they are really good at brand dialogue. If we start telling customers what to do with their brand, we might not have that level of credibility​.”

Peter Wennström, HMT’s founder, says the last two years has seen significant growth for both companies as the consultancy has worked alongside the ingredient company.

I’ve seen how DSM has changed from being more ingredient focused to becoming more benefit focused and customer-brand-centricsince it put the FourFactors into the heart of its innovation centre​,” he says.

We have met with a vast number of ingredient players over the years. So far, only a few companies in B2B have this consumer-brand-centric understanding​.”

He cites Tetra Pak as another example of a company that has embraced this value. “It has to do with the culture that embraces the consumer landscape, and for a science-driven company to do that, it means that they have to evolve the culture​,” Wennström adds.

The last couple of years have seen a dramatic swing from Shanghai to Singapore in the number of food industry R&D facilities the two cities have attracted, reflecting the efforts Singapore’s government has been making to increase its appeal to investors. For instance, A*Star, its science agency, has attracted partners including Nestlé and Coca-Cola, to develop products for the Asian market.

The government has also been welcoming to DSM, which has maintained close contact with official agencies. As Singapore’s public-private-institutional projects are finding, the Dutch company is also seeing its role moving towards one of downstream marketing, as well as its core business of developing new ingredients and marketing them.

Many western-orientated companies think that if you have the Mumbai-Shanghai axis set up, everything else should fall into place​,” says Nuboer. 

But in the last five years we have been successful in putting Singapore on the DSM map as our home in Asia, and especially Asean. Singapore is unique in its possibilities because it is a crossroads of cultures that is relevant to many ethnicities​.

We found a very welcoming audience and we’ve been increasing our presence with three sites now, and are in constant dialogue [with the Singapore authorities]​.”

And to reflect its position within DSM’s global network of five innovation centres, Singapore is the only one to have an office prepared for, and often used by, a full company board member—something Nuboer believes is a rarity among international companies in southeast Asia.

With half a decade under its belt, DSM’s Singaporean food operation has shown its value on the path to expansion, and the company is hinting it is anticipating a greater presence in Asia-Pacific in the coming years.

The concept behind the innovation centre is to place it into a global network​,” explains James Bauly, DSM’s regional marketing director. “Wherever our customers find a new opportunity, be that in South Asia, in China or in North America, all the innovation centres are globally connected​. 

This is the fifth nutrition centre, and as remaining markets continue on their development trajectory, it would be our aim to increase that network​.”

And this brings us back to the level of innovation that Nuboer has been seeing in recent years. This is now fuelling product plans in a part of the world that not very long ago was seen as a developmental wasteland, with ideas lifted wholesale from local and international competitors.

At the rate the innovation centres have been opening up in Singapore, the emphasis is quickly moving towards local development and fresh thinking.

Related topics: Business, South East Asia, Industry growth

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