Sats' investment in non-travel food creates resilience: CEO Kerry Mok

Sats has invested in an advanced manufacturing food hub in the Jurong Innovation District. PHOTO: LIANHE ZAOBAO

SINGAPORE - Sats' investment in a $150 million advanced manufacturing food hub in the Jurong Innovation District (JID) signals the airport services firm's commitment to its non-travel food business.

This, even as aviation volumes return, and inflight food business is expected to pick up for one of the largest inflight caterers in the world, alongside LSG Sky Chefs and dnata.

Speaking to The Straits Times, Mr Kerry Mok, president and chief executive of Sats, said both business segments are complementary, and will enhance the company's profile as a food player.

Mr Mok said it is possible to take brands created for the retail or consumer channel on board planes, while acknowledging that the taste would have to be adapted to being 35,000 feet in the air.

"If the consumer likes it, that helps in customer satisfaction as well. That is our vision for moving into a multi-channel, branded offering in future," he said.

Sats has already introduced some signature local dishes, such as Boon Tong Kee chicken rice for first-class and business-class passengers on selected flights.

Sats turned its focus to the non-travel-related food business when the pandemic hit in 2020.

Currently, food and non-travel related business represents 47 per cent of its total revenue.

Sats expects non-travel to account for 35 per cent of total revenue by 2025.

Mr Mok believes the firm's strategy to focus on both travel and non-travel food will ultimately create a more resilient business.

DBS analyst for regional aviation, Mr Jason Sum, agreed, noting that tourism has not recovered to pre-Covid-19 levels yet.

The investments Sats has made in productivity initiatives over the past two years will also help it to cope with increased volumes as activity levels normalise.

Sats has deployed automation and robotics processes to boost its operational efficiency.

Large-batch production of meals will be automated, and in the future, certain manual processes such as meal assembly will be carried out by robotic finger grippers.

Sats has deployed automation and robotics processes to boost its operational efficiency. PHOTO: LIANHE ZAOBAO

Another plank of Sats' strategy is to focus on food innovation and alternative proteins, which are plant-based or lab-grown.

Mr Sum said that market is poised for strong growth, as consumers increasingly demand more environmentally friendly food products, though not everyone will be receptive to the idea.

Mr Mok is confident Sats can deal with this by mixing alternative proteins with traditional food ingredients to create food products.

"We have a hybrid approach where we actually mix them. Our chef will create end products that use alternative proteins, and hopefully when the customer tastes it, he won't know if it is an alternative protein or not. We have already done that, for example, with sausage rolls," he added.

With the food production and food innovation planks of its strategy in place, Sats has also invested in a digital integrated supply chain that will provide end-to-end logistics, warehousing, sourcing and procurement capabilities.

Sats has already introduced some signature local dishes for First and Business Class passengers on selected flights. PHOTO: LIANHE ZAOBAO

Mr Mok said: "Suddenly your network is your capability. You're not just tied down to just one location. So, to give you an example, we are also building the India central kitchen. If the India central kitchen does very good authentic curry, nothing is stopping me from taking that curry, coming over to Singapore.

"I can add in chicken and it becomes curry chicken. So we will start to look into this going forward once we have got a network of kitchens around."

Besides the food hub in Singapore, central kitchens are coming up in Thailand, India and China. 

Once all the capabilities are in place, Mr Mok has ambitions to venture into Europe as well.

For now, however, the focus is on Asia.

"China, Japan, India, South-east Asia are going to be very important for us. We are first and foremost an Asian company. I think sharing the culinary expertise around Asia is important, Mr Mok said.

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