At the launch of the Food Service ITM in 2016, it was expressed by DPM Tharman Shanmugaratnam that the Food Services industry is in “need for a major makeover” to keep up with progress in other aspects of society. This is especially important as this is a domestic-market oriented sector which usually requires more time to change and adapt.
Food Services Industry Transformation Map (ITM)
The Food Services ITM focuses on pushing forth manpower-lean structures. We will delve into 2 of its key features which comprise of:
- Development of innovative food formats
- Mass adoption of technologies even within established business formats
Development of innovative food formats
This involves the incorporation of new formats of dining that differs from traditional dine-in or takeaway options. Some examples of it will be grab-and-go food services and ready-to-eat (RTE) vending machines. RTE is especially interesting for Food Service SMEs to look into as it does not require a lot of assets to run (such as storefronts) and can be easily distributed to many locations through the stationing of vending machines. RTE is different from “microwavable food” and instead uses a cook-chill method that helps retain the taste, quality and nutritional content of food in the vending machine.
Mass adoption of technologies within established business formats
You may have observed that many Food Service businesses have started incorporating electronic payments such as PayLah locally or AliPay in countries like China. That is only a part of the technologies that is being adopted into established food business formats. Other interesting developments include self-order kiosks (such as those in McDonald’s), online pre-ordering systems (e.g. 4Fingers) and many other innovations. If you are targeting a younger generation of people who are more familiar with such disruptive technologies, you can consider incorporating more of these innovations into your business to improve productivity.
What does this mean for your SME?
The incorporation of these technologies will also mean there will less reliance on lower-skilled manpower as those jobs will be automated. This follows the transition in Singapore where there will be less manpower in the Food Service industry as older-generation people (who currently make up a large part of the Food Service workforce) will be retiring in the near 5-10 years and the increase in average education levels mean that many younger-generation people do not desire to do low-skill work. Henceforth, these digital technologies meant to streamline your Food Service process are a worthy investment to look into.
Alternative Financing Options: Peer-to-Peer (P2P) Loans
Many SMEs may face difficulties in obtaining loans at traditional financial institutions to fund the adoption of these technologies, often due to their limited credit history and collateral. If you are facing similar struggles, it will be beneficial to look into P2P loans which are a form of debt crowdfunding. It allows investors to directly fund borrowers’ loans through an online platform to earn interest in return. This is incredibly beneficial for SMEs as the process is quick, easy and does not require collateral. A good place to look into is Funding Societies which is the largest P2P platform in SouthEast Asia and is licensed by the Monetary Authority of Singapore (MAS). It offers short-term and customisable business loans to meet your financing needs. You can find out more on P2P loans at Funding Societies from “Peer-to-Peer Loans and Why You Should Consider Them”.
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