Healthy demand for food factories in Singapore

What are the key drivers behind the demand for Singapore’s food factory spaces? What is the outlook for this market?

January 10, 2023

Singapore’s growing food manufacturing and processing industry is spurring a vibrant food factory market.

Data from the Singapore Food Agency show that the number of licensed food manufacturing and processing establishments (including central kitchens) rose 11.3% - from 1,659 as of 2019 to 1,847 by the end of 2021.

Figure 1: Locations of designated JTC Food Zones

Note: Food factories are commonly located in designated JTC Food Zones.
Source: JTC, JLL Research

Notably, the surge in demand for food delivery services and adoption of technology at the height of COVID-19 in 2020 and 2021 fuelled the rise of central and cloud kitchens and, in turn, demand for food factory space.

For example, shared kitchen provider Smart City Kitchens has since opened nine facilities island-wide, attracting major F&B players such as Jollibee and Poke Theory to set up their cloud kitchens within its facilities. Food delivery platforms like GrabFood have also ventured into the cloud kitchen space.

Meanwhile, the Food Services Industry Transformation Map (ITM), launched in 2016, also played a significant role in supporting enterprises with multiple outlets. It helped them establish central kitchens to automate their operations for economies of scale and reduce manpower reliance.[1]

Major players who have since established purpose-built facilities for greater operational efficiency and automation include Koufu, which consolidated its food production and logistics activities at its new headquarters in Woodlands in 2022. The Neo Group will also consolidate its central kitchens, research and development centre, corporate office and warehousing facilities, targeting full automation, at its new Jurong headquarters and catering hub completed in 3Q22.

Bright outlook

Changing consumer preferences for convenience, health and wellness, and sustainability is expected to drive the growth of the ready-to-eat meals and alternative-protein segments, generating demand for food factory space.

For example, Growthwell Foods has set up its alternative-protein manufacturing plant within JTC Food Hub @ Senoko. At the same time, GOOD Meat will open its new alternative-meat production facility in JTC Bedok Food City in 2023. Separately, Cremer Sustainable Foods opened a plant-based protein contract manufacturing facility within Logos Food21, which will allow firms to manufacture plant-based proteins at the site.

In April 2022, a new shared food-tech facility – FoodPlant – in JTC Food Hub @ Senoko, was launched to help 200 Singapore food manufacturers develop 400 new products by 2026. If successful, this could lead to the setting up of larger food manufacturing facilities for new products. Moreover, the refreshed Food Services ITM 2025 will drive further efforts on food innovation.

Meanwhile, consumer spending on food in Asia is poised to double to over USD 8 trillion by 2030[2]. To seize this opportunity, Enterprise Singapore will help companies increase exports of retail food products and support the expansion of F&B enterprises into innovative business formats like cloud kitchens, underpinning the demand for food factories. This is especially so for centrally located food factories, which can reduce delivery times and thus maintain food quality.

Table 1: Examples of major existing and upcoming food factories in Singapore as of 3Q 2022

Source: JTC, JLL Research

[1] Source: Enterprise Singapore’s press release, “Food Services Industry Transformation Map 2025 to drive innovation and internationalisation; develop homegrown regional brands”, published 19 May 2022
[2] Source: The Asia Food Challenge’s report, “Understanding the New Asian Consumer”, published September 2021