ESG Food Delivery Booster Package: Subsidies For F&B Stalls To Use Food Delivery Platforms And Logistics Partners

COVID-19 has very likely accelerated consumer demand for food delivery. Today, majority of food and beverage (F&B) establishments have either been onboarded to food delivery platforms and/or are using third-party delivery services.

While this provides a new revenue source, this has also led to restaurants and hawkers having to manage new cost areas – commission fees and/or delivery fees. During the current strict safe management measures, many F&B establishments are having to rely on these revenue sources for their survival.

To support the offline to online sales transition, the Food Delivery Booster Package was rolled out by Enterprise Singapore (ESG) to help reduce business costs of food delivery and sales. The package has also been enhanced to offset delivery costs for F&B establishments during Phase 2 (Heightened Alert) – when dine-in is not allowed.

Encouraging F&B Operators To Offer Food Delivery

During the circuit breaker in 2020, support for businesses initiating food delivery services was ramped up. This was rolled out in two packages, which lasted from 7 April to 31 July 2020.

During the initial phase of the rollout in 2020, the first package by Enterprise Singapore funded 5 percentage points of commission costs charged by food delivery platforms – Bungkus, Chope, Deliveroo, foodpanda and GrabFood. These platforms charge a commission of 20 to 40% for regular deliveries.

There was another component of the Food Delivery Booster Package providing more than $1,500 for F&B establishments to create their offline-to-online sales channels. This part of the Food Delivery Booster Package has not been extended.

Lowering Commissions / Delivery Costs During Phase 2 (Heightened Alert) In 2021

The Food Delivery Booster Package was re-introduced from 16 May to 15 June 2021 to support F&B businesses during the first Phase 2 (Heightened Alert) measures that put a stop to dine-in. When Phase 2 (Heightened Alert) was again announced from 22 July to 18 August 2021, the Food Delivery Booster Package was extended again as part of a $1.1 billion support package.

Read Also: $1.1 Billion Support Package For Businesses During Phase 2 (Heightened Alert): What You Can Expect

In the latest reintroduction of the Food Delivery Booster Package this year, the first package will fund 5 percentage points of commission costs charged by food delivery platforms – Bungkus, Deliveroo, foodpanda and GrabFood – sans Chope. Note that certain platforms such as Grab will further reduce charges with their own support packages for merchant-partners.

To qualify for the Food Delivery Booster Package, local F&B businesses such as hawkers, cafes and restaurants must sell food that is prepared on premise for immediate consumption; application is not required. Do note that merchants retailing only pre-packaged products (eg, snacks, ice-cream) are excluded.

In the second package, F&B businesses fulfilling food delivery orders via third-party logistics platforms – Lalamove, Pickupp, Zeek Logistics, GrabExpress, pandago, Chope, DLVRD, MilkRun and YY Circle – will receive 20% funding of the delivery costs per trip. Again, certain delivery platforms may be running their own support packages.

Alongside ESG’s initiatives, banks have also made it easier for their F&B customers to connect to logistics partners. For example, OCBC has teamed up with Butleric to make onboarding on the platform hassle-free and with preferential rates.

Read Also: Amazon, Lazada, Shopee, Qoo10: Which E-Commerce Platform Should You Use To Sell Your Products?

Optimising Sales With Capability Development Pack

[Editor’s Note: This component of the Food Delivery Booster Package has ended.]

Enterprise Singapore has also worked out a capability development pack valued at more than $1,500 for those who onboard with Deliveroo, foodpanda and GrabFood.

While the Capability Development Pack is not being offered, F&B businesses can work to optimise marketing, data analytics and improvement of online presence on their own. 

Capability Building: Businesses will learn to enhance online performances of their menus, develop appropriate pricing structures or to run promotions and bundle deals effectively.

Marketing: Companies will get to tap onto the platforms’ assets such as advertisements and online banners to promote products, run discounts and gain greater mindshare.

Data Analytics: Firms can access delivery performance reports, providing insights such as volume of sales and orders, average delivery and food preparation, and customer profile.

The food delivery platforms will also provide varying forms of onboarding support, such as waiver of onboarding fee, free product photography, or waiver of first month commission.

Read Also: Planning To Send Staff On No-Pay Leave? Here’s What Companies Need To Consider

Up To 90% Subsidy For F&B Businesses To Go Digital

[Editor’s Note: This component of the Enterprise Development Grant (EDG) has ended.]

To encourage F&B businesses to build their online presence, Enterprise Singapore will fund an enhanced amount of up to 90% of eligible costs, including digital marketing and manpower costs, through the Enterprise Development Grant.

To qualify, F&B businesses must be registered and operating in Singapore and have a minimum of 30% local shareholding. You must also be in a financially viable position to start and complete the project, of which you will submit relevant documents such as your latest financial statements.

To get up to 90% subsidy in eligible costs, businesses have to focus on either creating a virtual brand, or to develop an online to offline (O2O) strategy.

Virtual Brands: According to ESG, virtual brands refer to an online-only concept that leverages on your existing capacity, branching off from your core brand. The idea is that virtual brands can bring in an additional revenue stream, by attracting new customer segments. Labour and rental costs are also significantly lower.

Example of a virtual brand developed by Enterprise Singapore (Source)

O2O Strategies: While food delivery platforms provide access to a large customer base, it is also important for companies to build their own channels to engage with customers. One common way is by collecting and analysing customer data to use for marketing or sales purpose in future, such as to provide more personalised promotions.

Read Also: Guide To Productivity Solutions Grant (PSG) And PSG SkillsFuture Training Subsidy (SFTS)

This article was first published on 24 April 2020 and has been updated with additional reporting with the reintroduction of the Food Delivery Booster Package from 22 July to 18 August 2021.

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