The Economic Impact of the Food Industry in Singapore, a report released by Food Industry Asia and produced by Oxford Economics, shows the total benefit of the food industry is S$14.4bn once related activities such as logistics, distribution, retail and hospitality are taken into consideration.
In terms of 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$4.8bn in GDP.
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.
R&D was especially emphasised in the report, with several MNCs heavily investing in new facilities in Singapore.
“The Agency for Science, Technology and Research (A*STAR) estimates that organisations in Singapore spent a total of S$210 million on R&D in the field of agricultural and food sciences in 2013,” states the report.
Private sector spending
“The vast majority of this spending was undertaken by the private sector, and three quarters of the funds spent were dedicated to the field of food science, with the remaining quarter going to agricultural science issues.”
Other headline statistics from report include:
• In 2014, the food manufacturing industry earned S$9.8bn from sales in Singapore, while there supply chain spending within Singapore supported S$1.6bn of domestic procurement, 6,100 jobs, S$31m in tax revenues, and S$37m in CPF contributions.
• 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.
• 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.
The report also showed that productivity levels in food manufacturing were slightly below the national average.
However, Oliver Salmon from Oxford Economics said this shouldn’t be too much of a concern because high value sectors such as oil, petrol and electronics tended to disproportionately drive up the average.
Key for the industry’s future success, said Singapore Manufacturing Federation deputy president Sunny Koh, is transferring productivity and research skills from MNCs to local SMEs, which make up 95% of the manufacturing base.
Meanwhile Matt Kovac, executive director of FIA, said the food industry’s impact in Singapore went way beyond the bottom line: “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.”