Good News on Listing | Frost & Sullivan Assists Premium Catering (Holdings) Limited in Successful US Listing (Nasdaq:PC)

Premium Catering (Holdings) Limited (hereinafter referred to as 'Premium Catering') successfully went public on September 25, 2024, issuing 2.5 million shares at a price of $4.75, raising $9.5 million. Frost & Sullivan (Frost & Sullivan, hereinafter referred to as 'Frost & Sullivan') provided exclusive industry advisory services for the listing of Premium Catering, and hereby warmly congratulate it on its successful listing.

During the process of listing in the US, Frost & Sullivan mainly undertook the following tasks: helping the company accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the company's competitive advantages, assisting the company, investment banks, and other intermediaries in completing the relevant parts of the prospectus (such as overview, competitive advantages and strategy, industry overview, business, and other important sections), facilitating communication with the Hong Kong Stock Exchange and investors, helping investors quickly understand the market ecosystem and competitive landscape, and assisting the company in completing feedback on various industry-related issues from the US Securities and Exchange Commission.

Catering services refer to businesses that provide meals and snacks for events, workplaces, and other private occasions. In Singapore, the catering industry consists of a series of companies that offer food services outside of traditional dining restaurant environments. It is mainly divided into two categories: food catering businesses and restaurants.

Corporate catering services mainly or exclusively provide catering services for certain professions, such as factory workers, construction teams, transport workers, and other field workers, as well as students. They offer a large variety of pre-prepared meals, snacks, and beverages to workers who have limited contact with on-site food services. Industry participants operate efficiently while meeting safety standards. Event catering services focus on providing catering services for businesses and private events that cannot cook and serve on-site. Customers include businesses, organizations, and individuals hosting events. Food catering businesses operate industrial kitchen facilities and employ staff to handle logistics tasks such as transportation, setup, and cleaning.

Enterprise catering services mainly or exclusively provide catering services for certain occupations, supplying a large amount of pre-prepared meals, snacks, and beverages to workers who have limited contact with on-site food services. Since the workplace closures due to COVID-19 in 2020, catering companies have faced sudden revenue losses despite government assistance. The overall market size of the Singapore enterprise catering service industry decreased from S$640.3 million in 2018 to S$448.1 million in 2022, with an average annual compound growth rate of approximately -8.5%. Amidst uncertainty, catering companies willing to broaden their service scope, build lean capabilities, and form strategic partnerships have found ways for long-term growth. As the COVID-19 pandemic is brought under control, catering companies transforming around community health, smart operations, and strategic relationships will turn adversity into an advantage. It is expected that the market size of the Singapore enterprise catering service industry will increase from S$599 million in 2023 to S$799.4 million in 2027, with an average annual compound growth rate of approximately 7.5% from 2023 to 2027.

Source: Frost & Sullivan report

• Rigorous work culture and extended working hoursSingapore is known for its long working hours, especially in the business and financial sectors. Employees work an average of 47 hours per week, ranking among the longest working weeks in the world. Workers prioritize time and are more willing to devote it to their work than preparing meals. As a result, meal preparation time during working hours is very limited. Corporate catering services provide a practical solution by offering pre-prepared breakfast, lunch, and snacks, saving time and energy for employees. These services help improve employee satisfaction and productivity, making them a benefit that companies offer to attract employees. Singapore's strict work culture, extended working hours, and increasing pressure on productivity are the main factors driving the continuous demand for corporate catering services. Convenience, time savings, and benefits to employees make this expenditure worthwhile for both employees and employers.

• Increase in disposable incomeAs personal disposable income grows, their financial capability to afford non-essential goods and services (such as corporate catering) also increases. Corporate catering is often considered a luxury or convenience rather than an essential need. Therefore, when people have more disposable income, these services are more likely to be used and consumed more. When incomes rise, individuals tend to value their time more, making the time-saving feature of corporate catering more attractive. Consequently, employees' demand for catering services increases, and companies are more inclined to invest in and provide these services to attract and retain talent. This, in turn, broadens the market potential of corporate catering service providers. As consumers' financial capability to meet basic needs expands, they tend to allocate more funds to services that enhance the work experience and convenience, such as catering. This leads to an upward shift in the demand curve for corporate catering services in Singapore.

• >Sustained demand for heavy industryCatering services play a crucial role in meeting the dietary needs of foreign workers in the construction industry in Singapore, who usually live in nearby dormitories or temporary accommodations. The large presence of foreign workers has driven demand for catering services. In 2020, there were approximately 311,000 foreign workers working in the construction, marine construction, and processing industries, and this number increased to 318,400 in 2022. The construction industry in Singapore is constrained by strict safety regulations and guidelines, giving priority to workers' welfare, including hygiene, food safety, and workers' benefits. Catering service companies that comply with these regulations and provide high-quality meals and services can well meet industry needs. In addition, the continuous development of infrastructure, including residential buildings, commercial complexes, transportation networks, and industrial facilities, provides more growth opportunities for the catering industry because these projects require on-site meals and drinks for construction workers.

• Growing emphasis on environmental, social, and governance (ESG) factorsIn the catering service industry, there is an increasing emphasis on environmental, social, and governance (ESG) factors. Sustainable procurement of raw materials has become a major focus area, with catering service providers seeking suppliers that practice environmentally friendly practices such as organic agriculture, fair trade, and local procurement to reduce their carbon footprint. Reducing waste and recycling are also increasingly prominent trends in catering services. Companies are implementing more strategies to minimize food waste and promote recycling, such as using appropriate portion sizes, donating excess food to charitable organizations, composting organic waste, and choosing recyclable or compostable packaging. Specifically, smart insulated boxes reduce food waste by using less plastic packaging and improving energy efficiency. By keeping meals at a constant temperature for a long time, smart insulated boxes help prevent food from getting cold and being discarded, thereby reducing overall catering food waste. Traditional catering methods often rely on plastic packaging such as bags, containers, and cling film to keep food warm during delivery and service. Smart insulated boxes eliminate most of the need for disposable plastic packaging because food remains warm inside the device. The design of smart insulated boxes is also aimed at efficient energy use to maintain the optimal temperature range. This means that they generally consume less energy than traditional ovens, microwaves, and other methods that repeatedly heat food.

The catering service industry in Singapore is highly competitive with numerous participants, ranging from small independent operators to large multinational companies, covering a variety of cuisines. According to data from the Singapore Bureau of Statistics, there were about 750 catering establishments in 2022, including locally-owned and international chain stores.

Since the end of the COVID-19 pandemic, the number of weddings, corporate events, and social gatherings has increased, driving demand for catering services, including regular business meal plans. Due to consumers in the catering industry typically having low loyalty and low switching costs, the market has become more fragmented, with reduced concentration and no dominant companies. However, there are still some key players that occupy a considerable market share, such as Neo Group and Select Group, which usually have a long history of development and have established mature food service models covering a variety of cuisines. In addition, major players in this category have been continuously acquiring food and beverage brands in recent years to expand their business lines and enhance their market presence, leading to an integration trend in the Singapore catering industry.

Although some new entrants have entered the market by actively expanding online businesses and providing professional services to specific customer groups, market expansion is still constrained by limited business opportunities. To gain a foothold in a highly competitive market, competitors must demonstrate the following advantages: i) high-quality food supply and food safety, ii) brand recognition and reputation, iii) diversity and adaptability, as well as strong operational capabilities.

• Difficulties in obtaining licenses and permitsSingapore's catering businesses need to obtain licenses and permits to operate, including business licenses, food permits, and health department approvals. For example, selling or distributing ready-to-eat food requires a food retail permit issued by the Singapore Food Authority and a food store and supermarket permit. If a company operates kitchen facilities, it also needs to obtain a fire safety certificate managed by the Singapore Civil Defence Department. Due to the complex application process and high costs, newcomers may face difficulties obtaining these permits. This could hinder some new catering companies from entering the market.

•  beginning capital investment and operating costsEstablishing a catering service business requires high initial startup costs, typically including licensing and compliance, rent, equipment, labor, insurance, electricity, water, and raw material procurement, among other operational expenses. Despite the large investment amount, it can also be scaled based on the specific catering services provided. When starting any new catering operation, reasonable financial planning and budget management are crucial.

• High-quality food supply and food safetyIn the catering industry in Singapore, ensuring excellent food quality and safety standards are crucial for business success and customer satisfaction. Catering companies that invest resources in high-quality ingredients, strict hygiene control, and compliance with food regulations will be able to gain competitive advantages through strong customer trust and loyalty. By establishing a culture that prioritizes food safety and quality in all operations, catering companies can provide nutritious and delicious meals while ensuring freshness and hygiene. This overall focus on culinary excellence enables them to meet the needs of discerning customers who care about health, well-being, and safety. Ultimately, Singaporean catering businesses that operate around the key priorities of providing high-quality catering and strict food safety practices will have a competitive advantage in the industry.

• Good performance record and experienceCatering services require specific skills and experience in food preparation, menu planning, operational management, and customer satisfaction. While established industry participants are proficient in the entire service process, including operational procedures, customer relationship management, and supply chain management, new entrants lacking rich experience may face difficulties on the learning curve, leading to challenges in cost control and operational efficiency. This may become an important factor for some entrepreneurs who are reluctant to open catering businesses.