Food push in Singapore - Food - Brief Article

Business Asia, Oct, 2001

SINGAPOREAN CONSUMERS are clamouring for a taste of Aussie tucker from the first Australian-themed supermarket pavilion, but the jury is still out on whether it will remain a permanent success, according to Supermarket to Asia Ltd (STA) executive director Jim Kennedy.

The Australian Pavilion opened within the NTUC Fairprice Bukit Timah Plaza supermarket in Singapore last month, creating a platform from which to launch new Australian food products to the market.

Kennedy says the pavilion is providing businesses with the opportunity to get into the Singaporean market with as little hassle as possible.

New products are selected by a panel of buyers based on potential, then supplied to the pavilion via an appointed Australian consolidator.

Each product will be sold in the pavilion for a month, with no listing or new line fee, during which time the Australian suppliers are expected to promote their own product.

After the month is up, the product can go on to be sold in the main supermarket if it has been successful.

About 950 individual items are currently being sold in the pavilion. On the first day, queues in the 13 checkouts were 20 minutes long, and during the first week sales nearly doubled.

While this is a positive start, Kennedy is wary of labelling it a success story too soon.

"We're satisfied with what we've done because so many people told us it wouldn't work. That's fine, but it doesn't mean success," Kennedy says.

Supermarkets to Asia Ltd (STA) came about five years ago out of a common feeling within the food industry and Federal Government that there was a developing opportunity for Australian food in Asia.

The Government-funded organisation was set up to achieve specific goals, and has a life span that ends in June next year.

The three major goals are: to establish councils that deal solely with food, involving mainly businesses, and pulling together all related agencies to serve in a focused group for service delivery on the ground; to persuade various state and federal government agencies concerned with the food industry to focus attention on actually getting businesses involved in the target market; and to bring real focus and leadership on a national level to the food industry by developing a national food strategy.

Substantial progress has been made on all three -- no mean feat for what Kennedy describes as a "small, out-sourced private sector office in Canberra".

He says the best example of achievement to date is the Australian Pavilion, although there are still some important objectives to work on.

One of these is the question of whether Singaporean customers will grow to become loyal to Australian brands.

Another, Kennedy says, is "can Aussie products cut it?"

His hope is that a steadily changing range of products will be organised to make the venture financially viable.

At present there are 250 businesses waiting for their turn in the pavilion, so this looks likely for now.

Finally, Kennedy says it is important to try and build a commercial consideration network in Australia that provides a one-stop shop for Australian food products right across the range.

"If this Australian Pavilion in Singapore becomes a commercial success, we've both (STA and Fairprice) agreed it will become permanent." Kennedy says.

And what will happen come June, when STA will cease to exist?

"We'll be looking at handing the keys over to someone ... We hope it will be commercially self-sustaining, but it will need someone, whether it be Austrade or some other body, to watch over it," Kennedy said.

As far as repeating the pavilion experience in other countries is concerned, Kennedy says there have been some serious offers, including commercial interest from Hong Kong, Taiwan, Indonesia and West Coast USA.