SATS, Asia's largest provider of in-flight meals and ground-handling services, is expanding beyond stocking up Singapore Airlines' food trolleys to feed soldiers and pack vegetables for McDonald's Corp.
The supply of food to hotels, restaurants and mining companies will increase over the next five years to make up almost a third of its catering sales from 22 per cent now, chief executive officer Tan Chuan Lye said.
It also provides other food items to Burger King and Pizza Hut, he said.
"There are more opportunities where non-aviation food is concerned, both domestically and overseas," Mr Tan said on Monday in an interview in his catering kitchen at the company's Singapore headquarters.
"The aviation segment is very cyclical. That's why we took some effort to grow the non-aviation business."
Demand is expected to increase as labour-strapped firms farm out catering to companies such as Sats, said Mr Tan, 63, who will retire at the end of the year.
The push to diversify the company's revenue stream will also help it weather turmoil in the airline industry, he said.
Sats' biggest customers, which include Singapore Airlines and Qantas Airways, face increased competition from Middle East and low-fare carriers, adding pressure on their yields.
While air-passenger traffic recovered from a global slump last year, gaining 5.3 per cent, the industry will experience more challenges this year, Mr Tony Tyler, chief executive officer of the International Air Transport Association, said in June.
"Sats has been dependent on airlines, the health of the economy and the competitive landscape," said Mr K. Ajith, an analyst at UOB Kay Hian Research in Singapore. By developing its institutional catering business, the company "removes that cyclical element, leading to more stable growth", he said.
SATS has expanded its food business to hospitals and Singapore's two casino resorts, which include convention centres and a Universal Studios theme park.
In-flight meals and catering made up 64 per cent of the firm's $1.82 billion of revenue in the year ended March. The rest came mainly from airport ground handling.
"For catering, we have a dedicated food research and centre set up," Mr Tan said. "We are using the knowledge and experience in the aviation sector into the non-aviation sector."