Singapore: A Growing Market for U.S. Health Foods
By Dale L. Good
Changing lifestyles, increased education and a government-sponsored media campaign have produced a booming health food market in Singapore, creating new opportunities for U.S. exporters of health foods.
Singapore, a re-exporting center for many agricultural goods shipped to Southeast Asia, is considered a trend-setter for health foods. Usually, new food products appear on the market first in Singapore followed by Malaysia and other countries of the region.
Prior to the Asian financial crisis, Singapores importers and distributors expected the health food market to grow from 20 to 40 percent within the next five years.
Thus far, Singapores market has weathered the crisis rather well. It is expected to rebound towards the end of 1998 and will continue to build on an estimated 3 percent growth rate into the 21st century.
Health Foods Encourage New Lifestyles
The majority of Singapores health food consumers are between 25 and 50 years old. Many first tried health food diets when they traveled to Europe or the United States or studied at American universities.
Growth in the health food industry is spurred by a media awareness campaign conducted by the government. The campaign stresses the importance of developing good eating habits and adopting healthier lifestyles that can help prevent illness and achieve good health.
As consumers diets begin to change, more people are expected to develop a taste for health foods, expanding todays niche market into a growing mass market for health food products. This could create a demand for natural and organic health foods, fresh fruits and vegetables, wholemeal grain-based products, rice products, dried beans, beverages, healthy desserts and snack foods, creating new markets for U.S. exporters.
Most health food products in Singapore are sold in health food stores, while the rest are sold in supermarkets or pharmacies. As more health food products are used daily and the trend continues upward, new shops, cafes and stores are likely to be built, especially in the suburban areas of Singapore where most of the population lives.
Soon, Singapores supermarkets will begin to carry a wider range of products, including health foods that cater to specific medical conditions, such as gluten-free items and foods for consumers with wheat intolerance. Low-fat or natural cereals, granola or cereal bars, bran flakes and muesli are already found alongside the conventional cereal products in local supermarkets.
Supermarkets that cater to higher income consumers and expatriates import a wider variety of health food products from the West than those targeting middle and lower income consumers. Changes in modern technology are expected to encourage more consumers to shop by computer.
Singapores Market Challenges U.S. Exporters
Despite a growing demand for premium-quality health food products, Singapores health food market remains price-sensitive. Some traders believe that the prices of health food products must be reduced to appeal to more consumers.
Health foods are more expensive than conventional foods, especially fresh organic fruits and vegetables because of their short shelf life. Produced without any chemicals or preservatives, these foods can spoil quickly when exposed to heat and humidity. This is also true of conventional fresh fruits and vegetables. As a result, retailers air-ship only small quantities of organic fruits and vegetables into Singapore.
Even though warehouses in Singapore are air-conditioned, not all retail outlets are, and many items spoil before they can be sold. To offset these losses, merchants sometimes mark up the price of organic foods three to five times.
Importers in Singapore look for high-quality health food products from many nations, and as the demand for health foods grows, U.S. exporters face increased competition.
Australia is a source of fresh fruits and vegetables because of its close location to Singapore. Macrobiotic products such as seaweed, miso and soy health food products come from Japan. Europe supplies Singapore with pastas, olive oil, spaghetti sauces and coffee substitutes.
Many Japanese and European health foods are produced using costly traditional production methods. For example, Japanese soy sauce is prepared by fermenting beans in wooden vats for two years. Consumers are willing to pay premium prices for these products.
But U.S. exporters have a huge advantage in the Singapore market. They are considered one of the most developed and innovative sources of health foods and health food promotions on the market today, from rice cakes and miso to brown rice ice cream.
Labeling Requirements for Health Foods
Import permits are required for some health food products such as brown rice or for any foods containing sweetening agents. Foods containing artificial sweeteners are prohibited.
Health food labels must contain the common name of the item; a description to indicate the true nature of the food; name and address of the local importer, agent or distributor; the country of origin and the expiration date.
In addition, specific labeling requirements cover the ingredients and nutrient contents of special foods such as diabetic food, foods low in sodium, low-protein food, gluten-free food and carbohydrate-modified food. Regulations also exist to prevent misleading statements and claims as to the presence of vitamins and minerals in foods.
Eight Ways to Tap Into the Singapore Market
Visit Singapore and get to know the market. Build strong relationships with potential distributors and learn about the market first-hand by participating in international food shows, such as SIAL-Asia 99 that was held in Singapore June 1-4.
Appoint an agent to ensure the widest distribution of your products. It will also help if U.S. exporters undertake promotional efforts to get their products started in the market.
When getting started, be prepared to fill small orders. Be patient and flexible as you grow with your distributor.
Pay attention to the taste preferences of your customers. Consumers in Singapore do not like foods that are too salty or sweet.
Ship and package food items to withstand heat, humidity and insects. Some health food products are sensitive to sunlight. Storage is critical--importers recommend that products be wrapped in foil or vacuum-packed and shipped in refrigerated transportation.
Use small sizes and attractive packaging to stimulate interest in your products and state that the product is good for the consumer. Small packages encourage trial purchases by consumers. Place instructions on your product packages to tell consumers how to use them and even recommend recipes for product use. Any endorsements by authorities should be highlighted.
Give your agent all the information and materials needed to do a good job to promote your product. Be willing to share promotional expenditures and educate the company about your corporate culture.
Price your product competitively. Importers in Singapore estimate that health food prices should not exceed the price of conventional foods by more than 50 percent. Importers request that special offers, periodically given to wholesalers in the United States, be made available to them as well.
Exporters who want more information about the health food market in Singapore should contact:
U.S. Agricultural Trade Office
American Embassy Singapore
FPO AP 96534-0001
The author is the Agricultural Trade Officer in Singapore.