Organic Food Industry Trends in Singapore

(taken from a Channel NewsAsia Interview with Peter Lim, CEO of Nature’s Glory Singapore from Oct 6, 2009)

Considering the challenging economic environment, how has the organic food industry in Singapore weathered the storm?

The economic crunch and uncertainties of the past one year have also affected some jobs and income in the upper middle and upper income groups. These are the people who could afford to buy and value the more expensive organic food.

The organic food industry in Singapore could have been seriously affected as people may tend to turn to the cheaper non-organic food. However, those who believe in organic food recognise they must remain healthy and productive to meet the job and business challenges of better times. But there are those who have no strong conviction on organic food and are swayed by recent questionable reports from the UK that organic food has no appreciable nutritional differences from conventional food. Overall, the organic food industry could have dropped by less than 10%.

What kind of growth as an organic food business you have experienced since inception? 

Nature’s Glory is among the pioneers since 18 years ago on organic food. Business was very slow as many did not appreciate the importance of organic food for better health. To most people, the organic food was 3 to 7 times more expensive than conventional food.

But over the last 5 years, people are more receptive and discerning to organic food primarily due to 3 basic reasons:

There was a growing worldwide organic movement and local Singapore media had also created more awareness. Second, degenerative and terminally ill diseases were on the rise in spite of medical advancements. Such diseases are traced to toxins and to potential dangers in pesticides, hormones, chemicals and genetic modifications. Third, price of organic food had generally fallen and Nature’s Glory played a key role to moderate the prices in its health mission

for the nation.

Growth over the last 5 years could be easily between 50 to 100% to some companies with many organic food players coming into the Singapore market. But this growth is really insignificant compared to the growth of conventional food.

For example in Australia, organic food over 20 years is only about 2% of the total market. If the total market is (say) $100 million, theorganic share of 2% is only $2 million. If organic business increases by 100%, the increase is only 2 million. But if the increase in conventional food is only 10%, the growth is almost $10 million compared to the 100% increase or $2 million in organic food.

A number of companies which came into the organic food industry in Singapore hoped for big increases in business but realised the domestic market here is very small and highly competitive, and shared by a number of companies.

What are your growth and expansion targets going forward?

Singapore depends mainly on the organic imports from traditional sources such as Japan, Australia, USA, Europe and New Zealand. It is expected that more Asian countries including China, Taiwan, India, South Korea and Asean may open up more organic farms to comply with international standards.

As such, they have more opportunities to explore potential markets to compete on quality, pricing and technology and earn organic integrity and public confidence and trust. As such, prices could become cheaper including reduced freight cost, with more people coming forward to support the organic movement for better health.

But big powers may persist to influence regulators and to swing consumers to believe that organic food is no different from conventional food. Even some studies could make us so confused that we lose our discerning power on the health benefits of organic food. Political powers elsewhere may influence legislators to dissuade the rising influence of the organic movement to protect their selfish conventional business at the expense of health.

Although within the organic food industry in Singapore, the market size may increase by 20% or more annually, because of more players coming into the small domestic market in Singapore compared to other countries of bigger population, the increase per company may not be substantial with the exception of a very few.

Also, the operational cost in Singapore is considerably high compared to neighbouring countries to have a meaningful return on investment.

Nature’s Glory positions the organic challenge as a health mission rather than a profit mission, with passion and personal touch.

Where do you mainly see demand coming from and what?

The demand for the organic food industry in Singapore will continue to come from the upper middle and upper income groups who are financially sufficient and better informed about organic health. They are the ones who can afford to invest in long term health. Those who are less financially off may turn to pesticide free produce but are not considered organic in the strict standards of organic discipline.

The second group are the degenerative and terminally ill people who turned to organic food as a last resort to restore their health.

The third group are the children where parents are prepared to sacrifice and save on themselves but invest on their children’s long term health welfare. Demand on organic fresh and dried products will increase, followed by organic toiletries, skin care and meats. The demand for organic meats will rise due to the concerns of genetic modifications and cloning, hormonal growth, antibiotics and chemicals.

What is it that you think attracts consumers to organic produce in Singapore?

There are at least 7 main reasons why consumers are attracted to organic

products:

1. Organic products promote better health as conventional products have harmful toxins traced to pesticides, preservatives, additives and chemicals. Studies confirmed that many diseases including allergies, hypersensitivities and stress could be linked to these toxic elements including skin care products.

2. They have generally more nutrients arising from organic and natural ingredients on the soil instead of using chemicals. Many independent tests have substantiated the higher nutrients.

3. They have higher Qi or energy level which is one of the keys of organ optimum health against the invasion of pathogens and toxins. The produce has higher energy levels to defend itself and to benefit the humans. In contrast, conventional produce with a heavy dose of chemicals will generally weaken the produce and translate to our body.

4. They have better, natural and original taste compared to conventional food as the latter uses the same chemical components for most produce.
5. They do not have genetic modifications and studies confirmed that genetic  modifications contrary to nature, have the potentiality to lead to abnormal growth in our bodies. Most organic certifying bodies do not advocate GMO.

6. They do not have hormones, chemicals and antibiotics as commonly found in animals that are raised conventionally. Even in these days, meats and dairy products could come from cloned animals and offered for public consumption in a variety of food preparations, and many are ignorant as no proper labels are required to state the truth.

7. They promote an eco-balance system and environmental health for wildlife and humans. Organic cultivation does not pollute drinking water and the soil and for wildlife to grow with good balance. Environmental pollution will only lead to more global warming. The public must know that pesticide free produce is not organic food and cannot be claimed as such. 

Organic requires strict organic farming discipline in maintaining records, from seed, soil, storage, shelf, transit, water analysis and shelf life, all chemical free with no genetic modifications or cloning right from the seedlings. If the seeds are genetically modified and even if the crops are cultivated by organic farming, they are not deemed to be organic in strict integrity.

The best way to trust organic integrity is by way of respectable independent organic certifications that meet high international standards and not to compromise to governmental standards.