Voluntary Report - public distribution

**Date:** 2/5/2004

**GAIN Report Number:** SN4001

SN4001

**Singapore**

**Product Brief**

**Organic Products**

**2004**

**Approved by:**

![](media/image1.wmf)Bonnie Borris

U.S. Embassy

**Prepared by:**

Converging Knowledge Pte. Ltd.

**Report Highlights:**

Consumption of organic food in Singapore reached an estimated retail
value of S\$8 million in 2002, where the figure represents less than
0.1% of global consumption. Consumption is expected to grow 20% a year.
Demand for organic food by an estimated 50,000 organic food consumers is
driven largely by increased awareness and availability of organic food,
and health and medical reasons. Singapore imports most of the organic
food, with limited organic vegetables supplied by domestic organic
farms.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Singapore \[SN1\]

\[SN\]

I.  **Market Overview**

Consumption of organic food in Singapore reached an estimated retail
value of S\$8 million in 2002, where the figure represents less than
0.1% of global consumption. Consumption is expected to grow by 20% a
year. Demand for organic food by an estimated 50,000 organic food
consumers is driven largely by increased awareness and availability of
organic food, and health and medical reasons. Singapore imports most of
the organic food, with limited organic vegetables supplied by domestic
organic farms. Australia dominates the organic fresh produce market,
while the US leads in most other organic products. Thailand and Malaysia
may also be emerging as alternative sources of organic produce due to
their proximity to Singapore. Market opportunities identified include
Asian-flavored and gluten- and wheat-free organic food.

  ----------------------------------- -----------------------------------
  **Advantages**                      **Challenges**

  The US is perceived as the priority Lack of support to heighten
  source for buying organic food due  awareness by US exporters to
  to wide variety of choices,         Singapore importers.
  including gluten- and wheat-free    
  versions. US certification commands 
  higher recognition.                 

  Reasonably established brands       Prohibitive prices of organic food
  supported by expatriates and        restrict consumption to the
  growing number of health conscious  affluent. Premiums range from 100%
  and affluent consumers.             to 300% over non-organic
                                      equivalent.

  Low tariff barriers encourage US to Competition from nearby Australia
  export to Singapore, which is the   and New Zealand, which also offer
  gateway to Southeast Asia.          certified suppliers.

                                      Limited shelf life organic food.
  ----------------------------------- -----------------------------------

**Singapore**

Singapore's multi-racial population, which includes foreigners, numbers
4.16 million people, comprising 77% Chinese, 14% Malays, and 7% Indians.
English is the lingua franca, followed by Mandarin and other Chinese
dialects, Malay, Tamil and other Indian languages. The country offers a
wide variety of ethnic and foreign cuisine, in view of its multi-racial
composition, free trade and international business practices, and
openness to foreign influence. The Malays, who are largely Moslems,
abstain from eating pork and drinking alcoholic beverages. Most Indians
are Hindus who avoid eating beef. Strict Chinese Buddhists refrain from
eating meat on certain religious days.

Singapore enjoys year-long hot and humid tropical climate. The island
nation's landmass of 685 square kilometres could still be growing
through land reclamation. Urbanization has reduced farming land to less
than 3% of total landmass. The country's population density of 6,075
people per square kilometre is one of the highest in Asia. Over 94% of
the inhabitants live in high-rise apartments owned and managed by the
government. The country exercises strict environmental and security
laws.

Formerly a British Crown colony, Singapore is a parliamentary democracy
led by the People's Action Party (PAP), which has dominated politics in
the country since it achieved full independence in 1965. Between 1963
and 1965, Singapore was briefly part of the Federation of Malaya,
Sarawak and Borneo (Sabah).

In 2002, Singapore's gross domestic product (GDP) of US\$93 billion
implies GDP per capita of US\$22,240. The country expects GDP growth
ranging from 0% to 1% this year to improve to 3% in 2004. The official
reserves stood at US\$82 billion as of end 2002.

Singapore has a highly industrialised economy and operates one of the
world's busiest ports that represent the gateway to Southeast Asia.
Singapore is the easiest Asian country to get around, given the
country's massive investments in transportation infrastructure.
Singapore is exceptionally dependent on trade. The total value of trade
in goods (exports plus imports) was equivalent to 273% of GDP in 2002.
Total imports US\$120 billion comprise mainly machinery and equipment,
mineral fuels, chemicals and foodstuff. Total exports US\$129 billion
consist primarily of machinery and equipment, electronics, consumer
goods, chemicals and mineral fuels.

**II. Market Sector Opportunities and Threats**

**Market Size**

An estimated 50,000 Singaporeans and expatriates in Singapore consumed
an estimated S\$8 million worth of organic food in 2002[^1]. The figure
excludes non-edible organic products, which are also retailed in
Singapore. Demand is expected to grow by an estimated 20% a year, with
historical annual growth rates in excess of 20%. Expatriate communities
comprising Western and Japanese professionals and their families living
in Singapore form a stable base of organic food consumers. In
particular, Japanese housewives tend to buy Japanese products due to
reasons such as familiarity and language.

Singaporeans are also emerging as a growing force in eating organic food
for a variety reasons. Many come from the affluent, sophisticated class
that has adopted the lifestyle of total well-being. Eating organic and
other healthy food thus completes such lifestyle that includes regular
exercise, yoga, meditation, massage and spa treatment.

Others buy organic food for medical reasons. Consumers develop allergies
due to unbalanced diet, and irregular eating hours, in the case of busy
professionals. Families with family members who are inflicted with or
recovering from major illnesses such as cancer are also turning to
organic food. Curious consumers, who are irregular buyers of organic
food, are willing to try the rising trend of eating organic food. The
outbreak of Severe Acute Respiratory Syndrome (SARS) momentarily
increased demand not only for organic food, but also for herbs, vitamins
and other health supplements.

**Consumer Patterns**

Consumer groups in Singapore can be classified according to their unique
tastes:

-   Well-informed and health conscious middle- to upper-class
    Singaporeans purchase organic products for medical reasons or as
    they adopt the lifestyle towards total well-being. These consumers
    are more likely to purchase organic products that fit into or
    complement the local diet, instead of foreign foods they are not
    familiar with. A key example is organic brown rice.

-   Expatriates from North America, Europe, Australia and New Zealand,
    and Japan in particular, who consume familiar products such organic
    cider vinegar and herbal teas.

-   Singaporeans love eating out, as cooked food tends to be affordable
    from the regular food markets commonly found everywhere with
    sizeable population of housing dwellers or office workers.

-   Busy professionals and expatriates also buy processed food out of
    convenience. Such food includes ready-to-cook or ready-to-heat rice
    products, pasta, noodles and pour-over sauces.

**Restaurants and Hotels**

Major hotels contacted do not serve cooked organic food. Only a handful
of specialty vegetarian restaurants serve organic food.

**Popular Types of Organic Food**

Organic food is clearly labeled "organic" to differentiate from
non-organic equivalent. Popular organic items include brown rice, whole
grains, basic cereals such as raw oats and bran, and vegetables and
fruits. Brown rice is the most popular, as rice is a key staple in the
Asian diet. Organic vegetables and fruits also tend to be popular for
similar reason.

Top selling brands cited by our trade correspondents include Nature's
Path and Imagine Food, both from the United States, while brands from
the United Kingdom and Australia are increasingly popular.

**Limiting Factors**

In the absence of pesticides and preservatives, organic food lasts
between 6 and 18 months, hence are sold in small packages. Refrigeration
may extend the shelf life by several months. Given such limited shelf
life, wholesalers and retailers may be discouraged to shoulder such
inventory risks.

Overall, organic food is priced at a premium ranging from 100% to 300%,
including all middlemen mark-ups, compared to the non-organic
equivalent. Yields of organic produce tend to be lower in the absence of
using pesticides and other chemicals. Given such price premium, the mass
consumers tend to avoid buying the expensive organic food, unless
consuming such food has become an integral part of their "total
wellness" lifestyle or due to medical reasons.

In addition to the lack of range of orgnanic products that are imported
into the country, awareness of the availability and the benefits of
eating organic food may not be as high as claimed by trade respondents.
Consumers tend to be satisfied with buying what is deemed as fresh food
from grocery stores. The trend is underscored by Singapore's Health
Promotion Board declaration that organic food offers no nutritional
advantages over non-organic equivalent[^2]. The Agri-Food & Veterinary
Authority of Singapore (AVA) insures the safety and quality of food
imported into the country, thereby alleviating concerns of the masses
eating non-organic food.

Singaporeans tend to eat out often, but may not have access to cooked
organic food due to the dearth of organic food restaurants.

**Opportunities**

-   Singaporeans consume less than 0.1% of total global demand for
    organic food. Several trade respondents felt that many leading US
    brands are still missing in the shelves of organic food stores.

-   Gluten and wheat-free organic food has often been cited as products
    with good growth potential. This is due to a growing number of
    consumers who have developed allergies to certain food ingredients.

-   Other than brown rice, authentic Asian organic processed foods such
    as noodles, organic seafood and some varieties of organic cereal
    flours also represent growth opportunities. Most pre-cooked organic
    food tends to be Western or vegetarian, which appeals to the
    minority groups in Singapore. Organic products such as rice noodles,
    sugar and coffee from Thailand, Myanmar and Laos are available in
    Singapore. US manufacturers offer limited selection of
    Asian-flavored sauces and oil such as salad dressings, ketchup,
    tamarind sauce and sesame seed oil.

-   To encourage increased consumption of organic food, the premium over
    non-organics should be kept below 50%.

**Entry Strategies**

-   U.S. exporters should develop strong relationships with established
    importers to tap on the latter's local knowledge of the market. U.S.
    exporters should provide as much information as possible on the
    products that they are trying to sell in Singapore.

-   Domestic organic farms, which sell fresh produce, could complement
    the offerings of US exporters.

-   Co-sponsoring awareness creation events with their importers,
    wholesalers and retailers in Singapore will help insure their brands
    reach out to both current and prospective organic food lovers.

-   Packaging should be well labeled, attractively designed and properly
    sealed so as to attract the attention of consumers and protect the
    content from Singapore's hot and humid environment.

**Distribution Channels & Players**

As organic food tends to be more popular among expatriates, specialty
retail organic food stores are located in the areas of Orchard Road,
Tanglin and Holland Village, home to many expatriate families. These
specialty stores tend to carry a wide range of organic products, giving
them the one-stop shop advantage. These stores would purchase in
sizeable quantities, and then break into smaller packs, which are
typically labeled the same original brands. Free home delivery services,
on minimum order in several cases, insure loyalty and continued
patronage.

In the last two years, Singapore experienced openings and closures of
such specialty stores. Several stores that underwent change in
management have improved their sales performance. Our trade respondents
estimated 30 existing wholesalers and retailers operating in Singapore.
Sizeable wholesalers/ retail players tend to generate revenues of
approximately S\$3 million a year.

Supermarkets and hypermarkets carry a limited range of organic products,
hence they tend to be less popular compared to specialty stores.
Recently, this particular channel is trying to beef up its range of
organic offerings again. Supermarkets such as Cold Storage, ranked the
second largest supermarket chain in Singapore and which caters to
expatriates and the middle- to upper-class Singaporeans, have re-entered
the organic food business. Cold Storage distributes primarily Waitrose
organic products from the UK, with limited varieties of other brands
from other countries. NTUC FairPrice, which is Singapore's largest
co-operative supermarket chain that generates annual revenue in excess
of S\$1 billion, is also considering retailing organic food.

Organic Online sells organic food through the Internet, and provides
delivery to consumers.

**Distribution Channel Flow Diagram**

Exporter  Importer/Wholesaler  Retail Store, Supermarket &
Hypermarket, Restaurants  Consumers

Parallel importing is common. Channel players could play multiple
functions. Importers may also function as wholesalers and/or retailers.
Wholesalers may run its retail stores, but could also help to push
products to help newly set up retail stores.

**Selected Wholesale and Retail Organic Food Stores**

  ------------ ---------------- ----------- ----------- --------------------------------- ---------------------------------------------------------------------------------------------------------
  Company      Address          Tel         Fax         Email                             Website

  Bee Natural  275 Thomson      \(65\)      \(65\)      <bnatural@singnet.com.sg>          
               Road, #01-10,    6251-0311   6250-0063                                     
               Novena Ville,                                                              
               Singapore 307645                                                           

  Brown Rice   163 Tanglin      \(65\)      \(65\)      <brpar@singnet.com.sg>             
  Paradise     Road, #03-15     6738-1121   6235-6656                                     
               Tanglin Mall,                                                              
               Singapore 247933                                                           

  Eat Organic  182 Bukit Timah  \(65\)      \(65\)      <eat_organic@pacific.net.sg>       
               Road, Singapore  6736-4868   6736-4618                                     
               229853                                                                     

  Essential    Block 194,       \(65\)      \(65\)                                         
  Living       Pandan Loop      6276-1380   6276-1370                                     
               #01-01 Pantech                                                             
               Industrial                                                                 
               Complex,                                                                   
               Singapore 128383                                                           

  Nature\'s    2315 Outram      \(65\)      \(65\)      <abound@singnet.com.sg>            
  Glory        Road, #11-03,    6227-1318   6227-0868                                     
               Pan Boon Liat                                                              
               Building,                                                                  
               Singapore 169074                                                           

  Organic      19 Bah Soon Pah  \(65\)      \(65\)      <organicnetwork@pacific.net.sg>    
  Network      Road, Singapore  6754-1957   6754-1936                                     
               769965                                                                     

  Organic      Block 530, Bedok \(65\)                  <sales@organiconline.com.sg>      [www.organiconline.com](http://www.organiconline.com/)
  Online       North Street 3   6876-1181                                                 
               #12-626,                                                                   
               Singapore                                                                  

  Organic      Block 5 Eunos    \(65\)      \(65\)                                        [www.organicworld.com.sg/organicworld/index.jsp](http://www.organicworld.com.sg/organicworld/index.jsp)
  World Health Crescent         6743-1311   6742-2232                                     
  Enterprise   #01-2617,                                                                  
               Singapore 400005                                                           

  Organic Zone 865 Mountbatten  \(65\)      \(65\)                                         
  Nature Food  Road, #01-22     6345-7446   6345-3787                                     
  Enterprise   Katong Shopping                                                            
               Centre,                                                                    
               Singapore 437844                                                           

  Origins      55 Ubi Avenue    \(65\)      \(65\)      <origins@pacific.net.sg>           
  Healthcare   #08-07,          6745-2402   6745-2243                                     
               Singapore 408935                                                           

  Super Nature 21 Orchard       \(65\)      \(65\)      <chen19@singnet.com.sg>            
               Boulevard,       6735-4338   6735-0366                                     
               #01-21 Park                                                                
               House, Singapore                                                           
               248645                                                                     

  The Organic  160 Orchard      \(65\)      \(65\)      <orgpar@singnet.com.sg>            
  Paradise     Road, #B1-03/04  6737-1824   6737-4472                                     
               Orchard Point,                                                             
               Singapore 238842                                                           
  ------------ ---------------- ----------- ----------- --------------------------------- ---------------------------------------------------------------------------------------------------------

Source: Company Research and Interviews

**Domestic Organic Farms**

There are four known domestic organic farms that supply an estimated 90
tons of organic vegetables a day. Green Valley Farms is the only farm
that is certified by the Biological Farmers of Australia (BFA), and
represents one of the newest organic farms in land scarce Singapore. As
with the other farms such as Fire Flies Health Farm, Green Circle and
Chuan Fa Vegetation Farm, domestically grown organic produce is sold
through specialty stores for domestic consumption. Malaysia grows
organic vegetables for domestic consumption with some exports to
Singapore, while Thailand represents a potential additional source of
supply.

Samples of Organic Products Sold In Singapore

  -------------- ----------------- ----------- ------------ ---------- ------------
  **Category**   **Organic         **Brand**   **Quantity & **Price,   **Source**
                 Product**                     package      S\$**      
                                               type**                  

  Rice, pulses,  Brown rice        Sunlong     1kg per bag  4.14       USA
  flour                                                                

                 Basmati rice      Lotus       500g per bag 9.95       USA

                 Risotto (rice)    Lundberg    155g in box  6.01       USA

                 Pizza flour mix   Orgran      375g per box 5.96       Germany
                 (wheat- &                                             
                 gluten-free)                                          

                 Garbanzo beans    Eden        425g per can 3.74       USA

                                                                       

  Fruits,        Tomatoes          Daisee      200g per bag 3.50       Malaysia
  vegetables                                                           

                 Aubergine         Daisee      300g per bag 2.25       Malaysia

                 Dried apricot     Waitrose    250g per     5.65       UK
                                               pack                    

                                                                       

  Cereals,       Cereal            Koala Crisp 600g per box 7.57       USA
  snacks                                                               

                 Cashew nuts       Pure        250g per bag 14.65      Brazil
                                   Harvest                             

                 Rice cakes        Kallo       130g per box 3.95       Belgium

                 Sourdough bread   Sunnyvale   400g per     12.20      UK
                 (gluten-free)                 loaf                    

                                                                       

  Beverages      Herbal tea        The Koala   20 teabags   4.95       Australia
                                   Tea Co.     per box                 

                 Peppermint tea    St. Dalfour 25 teabags   4.39       Sri Lanka
                                               per box                 

                 Honey             Epicure     454g per     13.25      UK
                                               bottle                  

                 Honey             Nuzeabee    500g per     9.65       New Zealand
                                               bottle                  

                 Oat drink         Pacific     946ml per    5.91       USA
                                               carton box              

                 Raspberry juice   Mountain    946ml per    7.45       USA
                                   Sun         bottle                  

                                                                       

  Sauces, soups  Shoyu (soy sauce) Lotus       250ml per    9.50       Australia
                                               bottle                  

                 Apple sauce       Santa Cruz  678g,        8.89       USA
                                               bottles                 

                 Tomato paste      Muir Glen   170g per can 2.32       USA

                 Creamy tomato     Imagine     946ml per    7.02       USA
                 soup              Foods       carton box              
  -------------- ----------------- ----------- ------------ ---------- ------------

Source: Company Research

**III. Market Access**

**Singapore Policy**

There are no existing standards or plans to establish future certifying
bodies for organic food exist in Singapore, aside from the regular
policy that governs the safety and quality of food, produce and health
products.

However, the Food Control Department of the Ministry of Environment and
Consumers Association of Singapore (or CASE) are monitoring the labeling
on organic food, with their concern being the health claims made by
manufacturers. Specific claims that guarantee cure or symptom
alleviation is banned under the current food and drug regulations.

For regulatory purposes, organic products that make health claims are
evaluated and categorized as:

-   Pharmaceutical products. For example, health supplements fall under
    the jurisdiction of the Drug Administration Division of the Ministry
    of Health;

-   Foodstuff that fall under the jurisdiction of the Food Control
    Department of the Ministry of Environment.

Products categorized as pharmaceuticals will be under strict regulations
with regards to sale and promotion, while health claims on product
packaging is banned in foodstuff. Meat, fish, fruits and vegetables,
both organic and non-organic, are regulated by the AVA.

**Food Labeling Laws**

AVA requires food exporters into Singapore to clearly label their
products that specify the basic information such as:

-   Names and addresses of manufacturer and importer

-   Ingredients

-   Weight

-   Dates of manufacture and expiry

Although not required by law in Singapore, most organic food labels also
contain the logos of certification of organic food.

**Key Contacts and Further Information**

+-----------+-------------+---------+--------+----------+------------+
| **Name**  | **Address** | **Tele  | *      | **       | *          |
|           |             | phone** | *Facsi | E-mail** | *Website** |
|           |             |         | mile** |          |            |
+-----------+-------------+---------+--------+----------+------------+
| The       | 27 Napier   | \(65\)  | \(65\) | [ato_    | [http://si |
| Agr       | Road,       | 6       | 64     | sing@pac | ngapore.us |
| icultural |             | 4769120 | 769517 | ific.net | embassy.go |
| Affairs   | Singapore   |         |        | .sg]{.un | v/embassy/ |
| Office,   | 258508      |         |        | derline} | offices/at |
| USDA      |             |         |        |          | o.shtml]{. |
|           |             |         |        |          | underline} |
+-----------+-------------+---------+--------+----------+------------+
| Agri-Food | 5 Maxwell   | \(65\)  | \(65\) | [L       | [www.ava   |
| &         | Road,       | 63      | 632    | IM-LOW_M | .org.sg]{. |
| V         | #01-01      | 25-7625 | 5-7677 | eow_Huay | underline} |
| eterinary | Tower Block |         |        | @ava.gov |            |
| Authority | MND         |         |        | .sg]{.un |            |
| of        | Complex,    |         |        | derline} |            |
| Singapore | Singapore   |         |        |          |            |
| (AVA)     | 069110      |         |        |          |            |
+-----------+-------------+---------+--------+----------+------------+
| Health    | 3, Second   | \(65\)  | \(65\) | [hpb     | [http      |
| Promotion | Hospital    | 64      | 643    | _mailbox | ://www.hpb |
| Board     | Avenue,     | 35-3500 | 8-3848 | @hpb.gov | .gov.sg]{. |
|           | Singapore   |         |        | .sg]{.un | underline} |
|           | 168937      |         |        | derline} |            |
+-----------+-------------+---------+--------+----------+------------+
| Food      | Environment | \(65\)  |        | [c       | [www.env   |
| Control   | Building,   | 63      |        | hu_sin-i | .gov.sg]{. |
| De        | 40 Scotts   | 25-8582 |        | @ava.gov | underline} |
| partment, | Road        |         |        | .sg]{.un |            |
| Ministry  | #24-00,     |         |        | derline} |            |
| of        | Singapore   |         |        |          |            |
| En        | 228231      |         |        |          |            |
| vironment |             |         |        |          |            |
+-----------+-------------+---------+--------+----------+------------+
| Natural   | 205         | \(65\)  | \(65\) | [        | [www.npoa  |
| P         | Henderson   | 62      | 627    | enquiry@ | sia.com]{. |
| roducts - | Road,       | 75-7125 | 5-2384 | npoasia. | underline} |
| Organic   | #03-01      |         |        | com]{.un |            |
| Asia      | Henderson   |         |        | derline} |            |
| (Exhibit  | Industrial  |         |        |          |            |
| o         | Park,       |         |        |          |            |
| rganizer) | Singapore   |         |        |          |            |
|           | 159543      |         |        |          |            |
+-----------+-------------+---------+--------+----------+------------+
| Consumers | 170 Ghim    | \(65\)  | \(65\) | [admin@  | [www.case  |
| As        | Moh Road,   | 64      | 646    | case.org | .org.sg]{. |
| sociation | Ulu Pandan  | 63-6678 | 7-9055 | .sg]{.un | underline} |
| of        | Community   |         |        | derline} |            |
| Singapore | Building,   |         |        |          |            |
| (CASE)    | #05-01      |         |        |          |            |
|           | Singapore   |         |        |          |            |
|           | 279621      |         |        |          |            |
+-----------+-------------+---------+--------+----------+------------+

End of report

[^1]: The figure is estimated by interviewing with industry trade
    respondents and by checking selected audited revenues of wholesale
    and retail organic food companies.

[^2]: <http://www.hpb.gov.sg/hpb/ere/ere050520.asp>