Nutritious Food Delivering Service Feasibility Study Report

The Industry and Market

The food service industry was worth $8.0332 billion in revenues during 2014 having grown by 3.2% since 2008. Notably, the street kiosks/stalls account for about 50% of all sales, with food service restaurants, cafes, fast food restaurants and pizza consumer service representing $$1,858.90 million, $1,006.60, $940.4 million and 108.60 million respectively. The 100% home delivery or take away segment comprised $51.8 million in annual revenues while the self-service cafeterias drew $13.3 million in revenues.

Potential customers would include healthy eaters, muscle builders, models, the elderly who need a strict diet, middle-aged men/women, generally people who want to lose weight.

Market Potential

The increasingly hectic lifestyles among Singaporean consumers have resulted in an increasingly high number of people demanding quick and convenient meals. As a consequence, then 100% takeaway and home delivery service expanded by 7.5% between 2008 and 2012, and it is expected to grow by a further 2.4 between 2014 and 2017. The self-service cafeterias expanded by 11.9% during the 2008-12 period and is expected to expand by a further 2% between 2014 and 2017. In addition, rising health concerns (due to excessive body weight, obesity, diabetes and heart diseases, etc.) have also resulted in the demand for healthier food offerings. The proposed business will seek to tap directly into the demand for 100% home delivery/takeaway, fast food, self-service cafeteria and pizza consumer service. Its value proposition is healthy, nutritious, customized and convenient food delivery as and when consumers need them.

With a population of 5.399 million and a GDP 297.9 billion (GDP per capital $55,182.48), Singapore is easily of the wealthiest countries in the ASEAN and the world. The country’s GDP grew by 3.9% and 4.9% in 2013 and 2014 respectively, which points to higher incomes that have ensured that Singapore is one of the world’s top 10 food cities/countries in the world. The economic and political risks are quite low (Asia Monitor, 2015; BMI Research, 2014). The high tourist population and cultural preference for eating out is a major derive behind the booming food business. The country’s food service industry comprises cafes, restaurants, canteens, bars, creameries, snack bars and caterers.

The proposed healthy food delivery service offers important value propositions that were not on the market before. These include the provision of nutritional value data of the meals, microwavable and nutritionally customized food. The self-service and 100% home delivery segments of the market are experiencing considerable growth, and thus they are on the growth segment of the industry life cycle. Given the low barriers to entry and the risk of competitors, offering the same if it proves successful, the growth stage should take between 10 to 20 years. With regard to the BCG Matrix, the healthy food delivery trucks are both a star and a question mark. It is potential for rapid growth that does, however, require considerable investments in marketing campaigns to gain a respectable market share and run profitable operations. On the other hand, the lucrative nature of the Singaporean food service market, an expanding economy, the growing demand for healthy, deliverable food, the proposed business could generate considerable revenues during the growth stage (making it a star). If the proposed company establishes a respectable market share and brand, then there are excellent prospects for a successful business venture.

Competitive Landscape

Pizza Hut Singapore is easily the biggest player in the 100% food delivery and takeaway segment of the food service market. However, Pizza Hut has struggled with a declining market share due to stern competition, new entrants and rival marketing campaigns. For established players, brand recognition and loyalty are easily the biggest competitive advantages. Ultimately, however, the Singaporean food service industry is one whole union, which means that the proposed business would have to compete almost directly with restaurants, food kiosks, caterers and fast food outlets among others. It is therefore critical to emphasize the value proposition that the new business promises to deliver and taking great effort to capitalize on the emergent niche markets (Africulture and Agri-Food Canada, 2014; Euromonitor, 2014; Yip & Hult, 2012). Targeting health clubs, private gyms, healthy working populations that can be identified, hospitals and using relationship marketing would prove vital in the penetration of the industry and success.

References

Agriculture and Agri-Food Canada, 2014. Market Overview - Singapore. [Online] Available at: http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/by-region/southeast-asia/market-overview-singapore/?id=1418411806959[Accessed 15 Mar 2015].
Asia Monitor, 2015. Risk Summary - Singapore - MAR 2015. South East Asia Vol 2 November 2014, pp. http://www.asia-monitor.com/risk-summary-singapore-jan-2015.
BMI Research, 2014. Singapore Country Risk. [Online] Available at: http://www.bmiresearch.com/singapore[Accessed 15 Mar 2015].
Euromonitor, 2014. 100% Home Delivery/Takeaway in Singapore , London: Euromonitor.
World Bank, 2015. Singapore: GDP Per Capita (Current US$). [Online] Available at: http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_pcap_cd&idim=country:SGP:HKG:JPN&hl=en&dl=en[Accessed 11 Mar 2015].
Yip, G. & Hult, T., 2012. Total Global Strategy. New York: Pearson Education..