To stay competitive in a fast-evolving food industry, SMEs must embrace innovation. This five-step guide shows how they can do so with clarity, confidence and purpose.
- Identifying trends like functional food and fusion products can help SMEs stand out in the crowd.
- Collaboration with both experts and other companies is key.
- In the food industry, standards and regulation can be strict—validating and testing early can help circumvent common challenges.
- Start with a clear plan to ensure supply chain resilience.
- Understand your needs before exploring digital processes for growth.
Singapore’s food industry is dynamic, marked by ever-changing consumer demands, an increasing emphasis on sustainability and intensifying competition from global markets - all ingredients that are changing the rules of the game for local SMEs. In this environment, innovation can make or break a business. However, many businesses struggle to find the time, resources and clarity to kickstart and sustain their innovation journey. Lean teams, constrained budgets, overwhelming regulations and the pressure to scale only compound the challenge.
With the right approach, it is a challenge that can be transformed into an opportunity. Here, IPI’s network of Innovation Advisors, Tech Experts and dedicated SME advisory support offers a practical five-step roadmap for helping food businesses innovate with purpose and agility.
- Identify market gaps and consumer needs
Understanding what consumers truly want is the first step to purposeful innovation. While taste remains vital, health and convenience now play a bigger role in how people choose what to eat and drink.
“Health has become a much more prominent factor in decision-making,” said Isabella Tan, IPI Innovation Advisor. “People want functional nutrition that is convenient and still tastes good.”
Tan elaborated that this opens up opportunities for portable functional snacks and drinks, gut-friendly foods and even nutritional cross-cultural fusion products. At the same time, consumers increasingly expect brands to align with their values, especially around sustainability and transparency. For agile SMEs, this is a space to differentiate with authenticity and speed, she emphasised.
- Leverage external expertise and open innovation
For many SMEs in the food industry, advancing a new idea into a viable business opportunity requires more than just inspiration. It demands technical depth, strategic guidance and the right partnerships. Without dedicated in-house R&D or commercialisation teams, this journey can be daunting. This is where external expertise and open innovation provide a powerful advantage.
IPI bridges these capability gaps by connecting businesses with Innovation Advisors, Tech Experts and research institutions that offer R&D support, pilot testing and commercialisation guidance. Its online resources also spotlight emerging trends and technologies, all of which help SMEs stay ahead of the curve.
One such SME is local packaging company Alterpacks, which connected with IPI in 2020 and has been working closely with the team ever since. Through IPI, Alterpacks embarked on a proof-of-concept trial with fruit and vegetable distributor, Freshmart Singapore. The partnership benefitted both companies, opening a new vertical for Alterpacks while positioning Freshmart as a leader in sustainable initiatives.
The team at Alterpacks also received guidance from IPI Innovation Advisors, Shivendu Nadkarni and Francois Joubert. The two advisors helped Alterpacks refine their supply chain, manage costs and optimise manufacturing processes.
By tapping into external expertise and embracing open innovation, SMEs can avoid costly trial-and-error and allow companies to draw from shared experience, shortening the development timeline and lowering risk. These collaborative strategies empower businesses to focus on execution instead of figuring everything out from scratch.
- Validate your product: testing, food safety and regulation
Scaling from a prototype to a shelf-ready product is one of the most complex steps. According to Dr Heng Kiang Soon, IPI Tech Expert, this often involves addressing rigorous safety, regulatory and production requirements early in the process.
“For current food items with established quality control standards, SMEs should constantly investigate and adopt more cost-effective methods of testing and monitoring product quality,” Dr Heng said. “Advances in quick testing technologies, many of which have been verified against conventional chemical assays, provide potential to expedite quality assurance while maintaining accuracy.”
Particularly when it comes to food, robust regulatory compliance can make a significant difference for a company looking to solidify customer confidence, both locally and internationally.
“Transitioning from lab to large-scale production requires pilot testing, cost evaluation and often new infrastructure,” said Dr Heng. “Obtaining access to adequate pilot facilities is frequently difficult, especially before a company is willing to invest in costly, large-scale equipment.” Dr Heng suggests that simple, cost-effective quality assurance and quality control (QAQC) methods, like portable test kits, can also support faster compliance, signal quality assurance and build customer trust.
External guidance from IPI Tech Experts like Chitra Radhakrishnan can help companies identify regulatory gaps and working with local research institutions can help run shelf-life studies and quality testing without setting up in-house labs. Facilities like Singapore Polytechnic’s Food Innovation and Resource Centre (FIRC) and the shared small-batch food production facility FoodPlant offer SMEs with affordable access to pilot-scale production and testing capabilities.
- Build a resilient and sustainable supply chain
Even the best product will struggle if supply chains are fragile or poorly planned. SMEs must first earn their ‘right to compete’ by focusing on getting the basics, i.e. compliance, quality and service right, then plan carefully to expand.
“Understand the growth you’re forecasting, and how you will realistically deliver on it,” advised Francois Joubert, IPI Innovation Advisor. “That requires clear planning, risk mitigation and smart collaboration."
For local ice cream brand, The Ice Cream & Cookie Co., working with IPI Innovation Advisors helped the lean team establish a clear plan for operations and expansion. With strategic guidance on supply chain planning and market entry readiness, the brand successfully launched its first international shipments to Malaysia and Hong Kong, laying the foundation for further growth in new markets such as Macau and Taiwan.
Joubert shared that common pitfalls for SMEs include overestimating demand, tying up capital in inventory or relying on unverified suppliers. SMEs should integrate sales and operations planning, monitor supplier quality and performance, and diversify supply channels. Being lean and resilient is possible.
- Adopt digital and smart processes to fuel business growth
Digitalisation is one of the most powerful tools SMEs can use to improve operations, strengthen competitiveness and prepare for future growth. But it needs to be strategic, not reactive.
“Start with clear goals, whether it’s expanding markets, improving efficiency or enhancing customer experience,” said Liew Chee Yin, IPI Innovation Advisor. “Next, review your business processes to identify what can be simplified, automated or redesigned.”
Affordable digital tools, from CRM to AI analytics, can enable data-driven decision-making, boost productivity, enhance customer engagement and reduce operational friction. However, Liew warned that SMEs must also manage change carefully: train staff, protect data and track return on investment. Smart processes are only effective when teams know how to use them.
Start small, but start now
There is no perfect time to innovate. Nevertheless, with the right support and a structured approach, SMEs can make meaningful progress.
IPI’s extensive network of advisors, tech experts and learning resources can help SMEs map their next steps, avoid common pitfalls and build momentum to achieve success ultimately. This is especially pertinent in today’s fast-moving food industry, where staying still is not an option. But with clarity and collaboration, even the smallest businesses can lead the way.
Ready to take the first step? Connect with IPI and discover how tailored innovation support can help you unlock new growth opportunities!
