SG F&B industry Performance: What's ahead for each Segment?

As mentioned in my post, "SG F&B Industry Performance: Sluggish but with hope?", Singapore’s F&B scene in 2024 might have lost a bit of its post-pandemic sugar rush, but it’s not going stale. Across bakeries, manufacturing, restaurants, cafés, and quick-service chains, the next few years are shaping up to be a careful balancing act with a pinch of innovation, inflation, and a whole lot of artisanal croissants.

Bakeries: Bread rises but on time?

Bakeries are holding their ground and, in some cases, buttering up profits. Singapore’s bakery market is worth around a whopping S$2-3 billion annually, with modest growth in 2024 as I imagine consumers kept munching on both staple breads and decadent treats. However, across Asia-Pacific itself, retail bread sales clocked $31 billion in 2023, with an almost steady 6% annual growth projected.

Artisan breads, French viennoiseries, and fusion bakes (pandan doughnuts anyone?) are trending. This trend coupled with health conscious bakes are also on the rise too. However, ingredient costs are rising (thanks to surge in global wheat and butter prices), skilled bakers are hard to find, and ever-so now new boutique bakeries are popping up like parakeets during a migration season.

With such challenges, we are observing a new trend of hybrid model that seems to attract a newer and younger crowd of bread conceissor- piovting the traditional mum-and-pap equalivant bakeries into café-style dining with some even extending to B2B catering. Think Delifrance but with varied choices of beverages and exotic lunch menus! Together with regional francishing, many of these bakeries seem to narrate a story that commands premium pricing with an artisan root justification. Now, this is what we call BaaS - Baking as a Service!

Food Manufacturing: Factory Lines to Dinner Lines

Singapore’s food manufacturing sector had a lukewarm 2024, with approximately 1–2% long-term annual growth projected. Its slow but steady. Meanwhile, Asia’s giants like Indonesia are booming with their packaged food and beverage sales hitting USD 40.1 billion in 2023.

Convenience foods (instant noodles, frozen meals) and health-focused products (low-fat, fortified snacks) are ironically in cahoots by leading the charge. Sustainability is sneaking in too, with more manufacturers chasing eco-friendly sourcing and packaging.

But let's not jump the bandwagon yet as raw material price swings, supply chain hiccups, and tighter food safety regulations are anticipated in the near future (if not now). That is definitely going to make life harder.

Restaurants: Fancy Plates, Fancier Problems

Full-service restaurants (FSRs) are feeling the hardest squeeze. Singapore’s restaurant sales were basically flat in 2024, up just by a snail 1.4% YoY in December. Michelin-star glitz helped, but high rents and cautious spending kept many tables empty.

Across Asia, FSRs still make up 53.8% of the foodservice pie, but consumers are getting pickier, hunting for experiences like chef tables, fusion menus, and sustainable eats.

Costs are compressing margins, skilled servers are harder to find than a parking spot at Orchard road, and competition from fast-casual spots and food delivery apps is brutal.

The light at the end of the tunnel may be come from tourism recovery (especially from China), catering side hustles, re-emergence of cloud kitchens, and tech-powered dining experiences.

Many consultants would recommend tapping into domestic demand, innovate with plant-based or health-specific foods, and team up with global giants sniffing around for local partners. However, its easier said than done. Based on my F&B experience and recent research for a consulting company, restaurant's customer behaviour is often different from the mass market and should not be categorised together with the rest of the segments. Think affluent market vs mass market.

Cafés: Caffeine and Cloud Cushions

Singapore’s café scene is still buzzing louder than a barista’s grinder, even though broader café/food court sales dipped by 2.7% YoY in December 2024.

Specialty coffee, craft teas, and "instagrammable" interiors are the winning formula. China’s coffee boom, Vietnam’s café surge, and Korea’s ever-trendy markets are proof that Asia’s caffeine addiction may yet be real. However, as the storms of saturated markets, rising rents, and shortage of skilled baristas gather, it seems gloomy for mid-2025. Oh, and let's not forget the inflationary prices of coffee beans.. (techically more expensive than petrol).

The solution? In my opinon, cafés need to up the game. Double up as co-working spaces, run coffee subscriptions, franchise smartly, and retail beans may be the light bulb shine that allows these venturers to retain their clientele or even brew up bigger profits.

Quick-Service Restaurants (QSR): Fast, Friendly, and Full

QSRs crushed it in 2024. In Singapore, they made up 39.4% of foodservice sales in 2024, and sales at fast food outlets grew a healthy (selling unhealthily) +1.4% YoY. The good old yet fail-safe method of localisation (paneer burgers, nasi lemak McSpicy), tech (kiosks, apps), and 24/7 availability kept customers coming back.

Besides a TikTok scandal video, the only hurdles I can foresee are the health-conscious image issues, rising ingredient costs, crazy competition, and the pressure to stay affordable. New market expansion (tier-2 cities in Asia), limited-time menu stunts (think KFC double down burger), crazy-efficient tech adoption, and scale-powered partnerships (hello, influencer meal deals).

Conclusion

Singapore’s F&B industry across all segments will grow but it’ll be a slow simmer, not a flash fry. Businesses will need to hustle smarter, tech harder, and tell better stories to survive.

Innovation, tech adoption, and a sharp focus on value-for-money experiences will separate the winners from the ones who’ll be toast.

Note: These are just opinions from my personal research narrated in the form that my mind speaks to myself everyday ( don't worry, I am not insane.. yet). They are backed by statistics that I have attained as part of my consultation work and experience in the F&B industry. No hard feelings or offence to anyone hor!