Insight
Asia
ASEAN Update https:// ffffffiles. wordpress. com / 2012 / 06 / 18 / foreign-working-fields-solo-indonesia /
Outlook & trends
Indonesian F & B Industries
R ising household consumption is a major driver for Indonesia’ s economy, and an industry that thrives on this is food and beverages. Sales growth is fueled by rising personal incomes and increased spending on food and drink, especially from the growing number of middle class consumers that demand more diverse diets( including more meat, dairy products, and fruit and vegetables), quality and safety and convenience. Indonesia Investments in February 2016 reported“ besides infrastructure, Indonesia’ s food and beverage sector remains a favourite of Indonesian banks for the disbursement of loans in 2016 as this sector is regarded promising.”
The Indonesian Food and Beverage Association( GAPMMI) stated in December 2015 that turnover in Indonesia’ s food and beverage industry stands at about IDR 1,200 trillion( approx. US $ 87.6 billion) in 2015, up from IDR 1.020 trillion(+ 17.6 % yearon-year) in the preceding year( despite the slowdown of the country’ s overall economy).
Growing health awareness
Indonesian consumers are concerned about digestive health and cholesterol, based on an online survey of 500 Indonesian consumers about ready to eat( RTE) healthy foods by W & S market research. The main channel to purchased RTE healthy foods in Indonesia, like Thailand was convenience stores.
Fortified / functional foods seen as offering extra value
Euromonitor International reports that fortified / functional food and beverages remained the most appealing to consumers and held the biggest value share up to 2015 as Indonesian consumers see fortification as offering extra value to the products. They expect that more Indonesians, especially middle- to upper-income urban consumers to become more exposed to health issues frequently covered in the mass media, which may lead to their increased health consciousness. More importantly, manufacturers are likely to continue heavily investing in new launches and promotional efforts for their health and wellness( HW) products, while modern retailers are set to continue to grow in significance and provide more shelf space for HW packaged food and beverages.
This growing health consciousness creates opportunities for products such as nutritional drinks or cereals enhanced with vitamins and minerals. Fortified milk products target weight-losers, body-builders and breastfeeding mothers.
Lifestyle changes drive demand for convenience
As in other developing countries, increasing urbanisation, busier lifestyles, and a developing modern retail sector that offers an increased selection of convenience foods, including frozen foods is increasing the demand for fast and convenient foods, which do not compromise on healthy eating.
By and large, consumers are looking for fast and convenient food without significantly compromising on healthy eating. One product category that fits the bill is frozen foods, which reduces cooking time, but maintains much of the‘ goodness’ contained in vegetable or animal products. Frozen food sales are mainly driven by the expansion of modern retail outlets across the archipelago. Equipped with freezers and modern storage facilities, hypermarkets and supermarkets help to supply frozen goods even to formerly underserved regions such as eastern Indonesia. A December 2013 report from market research firm Euromonitor estimated growth in frozen processed food in Indonesia at 18 % in current value terms and forecast continued robust sales growth with a constant value CAGR of 10 %.
The Investment Coordinating Board( BKPM) stated that Indonesia is not merely seen by foreign investors as a market for their food products( through trade) but also as a production base. In 2015 the agency noted that applications by foreign investors for principle licenses in the food sector were worth a total of IDR 163.7 trillion( 88.5 %) of the total of IDR 184.9 trillion. GAPMMI also believes that the positive trend in the nation’ s food industry will continue as various foreign investors( from the United States, South Korea and Japan) have shown their interest to tap Indonesia’ s food and beverage industry.
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