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FOOD AND BEVERAGE IN INDONESIA
Market Profile February 2012
This document is one of a series of free information tools for exporters produced by New Zealand Trade and Enterprise. New Zealand Trade and Enterprise provides a wide range of standard services and sophisticated solutions that assist businesses through every stage of the export process. For information or advice, phone New Zealand Trade and Enterprise on 0800 555 888, visit www.nzte.govt.nz, or contact your New Zealand Trade and Enterprise client manager.
3 1.2 1.1 Market Entry Strategies 2.5 1.2 2.1 Market Overview 1.CONTENTS 1 MARKET STRUCTURE 1.4 2.4 1.3 2.6 2 2 Market Drivers Market Potential Import Trends Key Players in the Market Regulatory Sustainability 3 3 6 7 7 8 9 11 12 12 12 12 13 13 14 MARKET ENTRY AND DEVELOPMENT 2.5 Points of Differentiation Long Term Strategic Issues for Exporters to Consider Distribution Channels Pricing 3 MARKET RESOURCES AND CONTACTS 2/ Exporter Guide | Indonesia | Food and Beverage | February 2012 .
1 Market Overview In 2010 and 2011.i In November 2011. dairy and meat products comprised over 76 percent of New Zealand’s food and beverage exports to Indonesia (2010: US$363 million. In 2011. The majority of the population in Indonesia. Indonesia’s dairy and meat market was worth an estimated US$2 billion. approximately 85 percent. 2011: US$381 million).5 million in 2010. In 2010.3 million. From 10 January 2012. making Indonesia New Zealand’s 11th largest export destination. are Muslim and all slaughtered food and meat (excluding pork) must have halal certification. AANZFTA will open up considerable opportunities for New Zealand businesses. New Zealand’s food and beverage exports totalled US$468. The agreement will allow duty / tariff free access to over 90 percent of New Zealand goods and services by 2015.iii 3/ Exporter Guide | Indonesia | Food and Beverage | February 2012 .1 MARKET STRUCTURE Indonesia is the world’s fourth most populous country with a population of 232.ii 1. and the largest economy in Southeast Asia. Indonesia provided formal notification of the completion of its internal ratification procedures to enable the ASEAN – Australia – New Zealand Free Trade Agreement (AANZFTA).
876 4.484 1.110 7.e.  9141.  9090.e. instant pasta) Snack Bars Soup 13.515 5.111 1.360 1.9 3 2008 14.340 1.596 1. dessert mixes.798 4.642 4.526 1. The sale of impulse and indulgence products (i.329 1.238 1. rice) Dried Processed Food (i.318 2. tomato pastes) Sweet and Savoury Snacks Oils and Fats Sauces.257 1. Dressings and Condiments Frozen Processed Food Ice Cream Canned/Preserved Food Chilled Processed Food Spreads Meal Replacement (i.9.487 1.967 1.100 11.e.1.244 832 845 510 327 278 251 68 66 16 13 4 3 3 2010 19.e.1 Market by product category Packaged food In 2010.201 1.4) 4/ Exporter Guide | Indonesia | Food and Beverage | February 2012 . Nutrition and staples (i.398 1.148 2. Indonesia: Sales of Packaged Food by Category: Value 2005-2010 in million USD 2007 Packaged Food .307 8. chocolates) grew due to increasing affluence.909 4.089 4.287 1.1 billion.540 1.167 4.704 1.  10389.054 1.506 2.1.026 1.e.496 1.039 653 439 356 346 86 82 21 17 5 4 4 Source: Euromonitor International (NB: IDR/USD currency. instant soup) Impulse and Indulgence Products (i.404 2. Indonesia’s packaged food market was valued at US$19.086 779 759 477 263 245 200 63 62 13 11 4 0.e.781 2.190 812 909 499 306 269 230 68 65 15 12 4 3 3 2009 14.e.817 9. rice) grew by 31 percent in 2010.959 6. chocolate coated biscuits) Bakery Dairy Noodles Baby Food Confectionery Meal Solutions (i. breakfast bars) Pasta Ready Meals (i.Total Nutrition/staples (i.e. Canned / preserved food had a high growth rate of 20 percent in 2010.999 1.634 1.  9699.
Fresh food In 2010.4 billion) and retail sales totalled 3. accounted for an estimated 77 percent of the total retail sales. Wine accounted for only 3 percent of total alcohol sales.778 743 671 222 2008 15.613 5.872 777 730 227 2010 15.432 2.0 3. comprising small independent stores and open air markets.4 2009 16.0 3. During the period 20052010. traditional retailers. While prices increased.3 2007 14.787 10.188 1.138 1. The growth was influenced by western culture and wine events such as wine tasting. wine volume sales declined by 6 percent.  9159.825 761 700 224 2009 15.3.024 1. the Indonesian wine market was worth approximately US$32 million (RP 275.4.0 3. demand of fresh food increased by 13 percent.291 2.9.592 2.1 million litres.1) 1.952 808 798 234 Source: Euromonitor International (NB: 2011 forecasts) Wineiv In 2011.078 1. The wine market showed an increase in sales by value of 61 percent during the period 2008-2010.  9699. the fresh food market in Indonesia had a total volume of 48.147 9.  9141. the demand from Indonesian consumers with high disposable incomes and expatriates remained and the number of wine enthusiasts in Indonesia grew. making Indonesia the fifth largest fresh food market in the world.2 2011 32.0 3.386 9.969 1.786 9.0 3.1.455 11.1 million tonnes.582 11.  8696.  9090.  10389.356 5.148 10. Beer is considerably more popular as an alcoholic beverage.153 2.2 Market by distribution channel Mass grocery retail In 2011.309 11.0 3.095 5.914 794 762 230 2011f 15.868 5.016 1.489 9.4 2008 15. wine dinners and classes. vii 5/ Exporter Guide | Indonesia | Food and Beverage | February 2012 .3 2010 28.985 10.iv Indonesia: Fresh food market in Indonesia in million tonnes Starchy Roots Fruits Vegetables Fish and Seafood Meat Sugar and Sweeteners Eggs Nuts Pulses 2007 14.119 5.v Indonesia: Wine Sales Off-trade Value in million USD Off-trade Volume in million litres 2006 12. During the period 2008-2010.1 Source: Euromonitor International (NB: IDR/USD currency.
2. as a result of exposure to health education through the media. the government expects to produce almost 2 million tonnes of rice.252 973 5. supermarket sales increased by 112 percent.vi Consumers are embracing the health conscious trend seen throughout the world. Through this US$5 billion project. Hypermarkets had the largest market share in 2010.000 tonnes of palm oil. taxation on wine increased significantly resulting in an increase in wine prices. including sales tax (VAT). with US$13.830 747 2008 9.000 tonnes of soy beans and grazing land for 64.167.334 4.297 798 2009 10.299 5.v While traditional markets still account for the majority of retail sales. they face greater pressure on market share as modern retail becomes more popular.173 644 2007 8. followed by hypermarkets (109 percent) and convenience stores / mini-markets (105 percent).871 4. 2 million tonnes of corn. the Indonesian government has taken on initiatives such as the Merauke Integrated Food and Energy Estate project.758 2.953 3. recovering from the worldwide recession. followed by supermarkets (US$11 billion) and convenience stores / mini-markets (US$5 billion).429 4.vi To meet the increasing demand of educated and health conscious consumers.154 3. 937.912 2.2 Market Drivers The following are viewed as key drivers for the food and beverage market in Indonesia: The food and beverage market in Indonesia grew in 2010. Mass Grocery Retail Sector – Estimated Number of Outlets 2005 Total Convenience Stores / Mini-Markets Supermarkets Hypermarkets Source: Business Monitor International 2006 7.337 3.524 5. Approximately 45 percent of the cost paid by consumers is tax.652 502 1.801 900 2010 11. While the government tried to discourage the rapid spread of modern retail. Political and economic conditions stabilised and the number of modern retail outlets and food service retailers grew. Purchasing power of middle and upper income consumers revived with an increase of disposable income.vii In April 2010. excise and import tax.5 million tonnes of sugar. During the period 2005-2010.6 billion in sales.iii 6/ Exporter Guide | Indonesia | Food and Beverage | February 2012 .In the organised retail sector.572 4.000 cattle.530 3. it wasn’t successful in enforcing its legislative regulations and modern retailers increased in numbers by using fake permits in some cases.
034 18.448 43.517 11. Indonesia imported an estimated US$8.492 13.3 Market Potential The overall food consumption is forecast to grow by a compound annual growth rate (CAGR) of 9.4 percent during 20102015 as wine is perceived to be a healthier option than other alcoholic beverages such as beer.280 2010e 24.585 Source: Business Monitor International (NB: 2010 estimate. most consumers in Indonesia remain price sensitive and private label will be a popular alternative as it is perceived as good value rather than cheap. wine is forecast to grow with a CAGR of 1.9 million.120 16.563 2015f 62.1 billion. rice and noodle ready-meals).284 2013f 43. However. These products include calcium fortified milk to prevent osteoporosis.320 2014f 52.765 8.167 15. baby food and products for weight and cholesterol reduction.756 6. aged between 15 and 24.v Indonesia has a massive youth population of around 40. such as hypermarkets are projected to increase in numbers as urban centres expand and demand increases for convenience and added-value products (i. However.645 2011f 30.e.3 percent during 2010-2015.573 20.vii There are opportunities for products targeted to improve the condition of specific health problems. Indonesia: Food and Beverage Trade in million USD 2009 Exports Imports Balance 18.1.1 percent to 2015.833 2012f 36.172 30. a growth of 25 percent from 2009. Indonesia is relatively resilient to global trade volatility but reliant on dairy and poultry imports to meet demand.vi 1.vii Modern retail.476 12.vii The sale of alcoholic beverages is expected to decline with a CAGR of 2. dairy milk for nursing mothers. 2011-2015 forecasts) 7/ Exporter Guide | Indonesia | Food and Beverage | February 2012 . This age group tends to be more westernised compared to the older population and is projected to drive demand for mass market products such as confectionary goods.406 9.233 25.598 36.4 Import Trendsvii In 2010.
232 64. 8/ Exporter Guide | Indonesia | Food and Beverage | February 2012 . the biggest foreign retailer in Indonesia.5 Key Players in the Marketvii Food and beverages Nestlé Indonesia had the highest market share with sales of US$23. Nestlé has a market leading position in the dairy sector and in its instant noodle category.308 7.095 4. Indonesia: Key Players in the food and beverage market Company Nestlé Indonesia Indofood Sukses akmur Terbuka Unilever Indonesia PT Charoen Pokphand Indonesia Mayora Indah Tbk Sari Husada PT Malindo Feedmill Tbk PT Siantar Top Tiga Pilar Sejahtera Food Sub-sector confectionery and dairy miscellaneous food dairy and tea meat and Fish confectionery formula and baby food miscellaneous food Snack food Snack food and instant noodles Sales (US$mn) 23.407 902 2.764 845 317e 238 89 83 Yearending Dec-10 Dec-10 Dec-10 Dec-10 Dec-10 2010 Dec-10 Dec-10 Dec-09 No. of employees 1.493 2. operates a 50-50 joint venture with Indofood Sukses Makmur. **Includes Papua New Guinea) Mass Grocery Retail Hero Supermarket Tbk had the largest sales within the mass grocery retail sector with US$8.144 4.238** 4.303 1.2 billion in Indonesia and Papua New Guinea.5 million in sales in 2010.925 Year Established 1971 1990 1933 1972 1977 1954 na 1970 na Source: Company Investor Relations. dominates the upper end of the market. BMI (NB: e = estimate.200 3. na = not available.97 billion in 2010. Hero has a broad range of store formats and offers lower value products while Carrefour.292 1. One of Indonesia’s key players in alcoholic beverages is Multi Bintang with 414 employees and US$209.1.
*Based on Delhaize Group Rest of World Sales. When negotiating supply contracts and before beginning actual export. and the majority of these are food and beverage products. BMI (NB: e = estimate.Key Players in Indonesia’s Mass Grocery Retail Sector. US$ mn 8.971 Financial year 2010 Brand Hero Giant StarMart Indonesia 1.615 2009 25 52 9 63 16 20 104 5. ≠Includes franchised. 9/ Exporter Guide | Indonesia | Food and Beverage | February 2012 . companies are advised to consult closely with their importer or distributor.** South Korea’s Lotte acquired Makro in October 2008.***Based on Carrefour’sIndonesia sales.6 Regulatory Information provided in this section is for reference only. 2011 Parent Company PT Hero Supermark et Tbk PT Sumber Alfaria Trijaya Tbk PT Matahari Putra Prima Tbk Country of Origin Indonesia / Hong Kong Sales.570*** 656e 639 500e 431* 187 2010 2010 2009 2010 2010 2010 Carrefour Makro Ramayana Indomaret Super Indo Alfa Alfa Grosir Gelael Format Supermarket Hypermarket Convenience Store Supermarket Convenience Store Supermarket Hypermarket Discount Store Hypermarket Supermarket Cash & Carry Supermarket Convenience Store Supermarket Supermarket Supermarket Supermarket No of outlets 120 38 125 4812 Indonesia 1. Duties and tariffs Under AANZFTA there will be tariff free access to more than 90 percent of New Zealand goods by 2015.645 2010 Alfamart Alfa Minimart Foodmart Hypermart Cut Price PT Carrefour Indonesia PT Makro Indonesia ** PT Ramayana Lestari Sentosa Tbk PT Indomaret Prismatama PT Lion Superindo PT Alfa Retailindo Tbk France / Indonesia Netherlands Indonesia Indonesia Belgium / Indonesia Indonesia 1.174 74 35 8 11 Source: Company Investor Relations. independent stores) 1.
quality. nutrition and labelling an authorisation letter from the manufacturer health certificate or certificate of free sale issued by authorised deputy from country of origin an audit report of distribution facilities from NADFC (National Agency of Drugs and Food Control) provincial office.000 / litre Excise Tax USD 1. visit National Agency of Drug and Food Control at www.fta.25 / litre IDR 11.go.000 (approximately NZ$17-345).govt.000 / litre USD 14.00 / litre IDR 125. companies must follow a registration process which involves a fee of Rp 150. The documents needed to register include: a letter that guarantees safety. copy of registration approval letter from the NZ company’s importer For more information on licensing and registration. visit the Directorate General of Customs & Excise at www.57 / litre IDR 14. import tax of 150 percent and income tax of 25 percent.000 / litre USD 4.Alcoholic beverages in Indonesia including wine are strictly regulated due to the Muslim Law.id or the AANZFTA at www.000.nz. Category A B C Classification Alcoholic beverage with 1-5 percent ethanol content Alcoholic beverage with 5-20 percent ethanol content Alcoholic beverage with 20-55 percent ethanol content Import duty USD 1.beacukai.asean. Licensing and registration requirements Prior to importation of food.18 / litre IDR 55.go.000 / litre For more information.000-3.pom.5 / litre IDR 40.000 / litre USD 14.000 / litre USD 6. Wines are subject to 10 percent value added tax (VAT).id Labelling requirements All imported food and beverages need to be labelled in Indonesian language and must contain: brand name name of product (type of food) list of ingredients net weight or net content or drained weight (if applicable) 10/ Exporter Guide | Indonesia | Food and Beverage | February 2012 .61 / litre IDR130.
e.go. is currently developing a water bottle from vegetable material.pom. Exporters are advised to check this closely with their importers or distributors in Indonesia.govt.nz. PT Aqua Golden Mississippi. corn. from 80. visit the MUI at www. A national water company.foodsafety. Halal Halal certification in Indonesia is required for all food derived from animal products.7 Sustainabilityviii The Indonesian Government encourages companies to use sustainable packaging and recyclable materials through tax incentives and an awards system. Indonesia has also recently imposed beef quotas which are being reviewed regularly. Bio-plastic is made from biotic materials (i.Error! Bookmark not defined. The Indonesian government increased the import quota for wine to 225.org 1. 11/ Exporter Guide | Indonesia | Food and Beverage | February 2012 . They can be contacted at email@example.com cases in 2008.953 cases respectively. cassava or micro-biota) and the material is easier to decompose.id. Alternatives to plastic packaging such as vegetable material or bio-plastic packaging have been welcomed by the market. The Federation of Islamic Associations of New Zealand (FIANZ) is recognised by the Indonesian Ulama Council (MUI) for certifying products in New Zealand. and recommended for companies whose products are targeting the mass retail market.000 cases in 2009. The number of cases of wine imported in 2008 and 2009 were 77. visit the National Agency of Drug and Food Control at www.485 and 191. month and year of minimum durability For more information on labelling. visit the New Zealand Food Safety Authority at www.nz For more information on halal. The Indonesian Nanotechnology Society is researching a thinner plastic bottle which can be decomposed in 4 to 8 weeks.halalmui. For more information on the overseas market access requirements (including halal requirements). name and address of parties that produce or import the products into Indonesia registration number date. The government plans to boost the environmentally friendly packaging through Industrial Regulations in Indonesia (RUU Perindustrian). Quotas New Zealand wine exports are subject to Indonesia’s import quotas.co.
In 2010.2 Points of Differentiation New Zealand is known in Indonesia as a producer of fresh. the quality of products is of greater importance. particularly for their children. the government approved a number of import licences for alcoholic beverages. but in the past it has taken 6-12 months. Surabaya (4 million) and Bali (4 million). However. The middle high income segment is paying more attention to healthy products as the new generation becomes more health conscious. There were previously only 2 companies with import licences but now more than 20 companies have secured a licence. Political issues and corruption are still a major issue in doing business in Indonesia.3 Long Term Strategic Issues for Exporters to Consider Recently a number of new regulations were introduced. 12/ Exporter Guide | Indonesia | Food and Beverage | February 2012 . 2. Jakarta and Surabaya are big markets in their own right but are also distribution hubs to the east and western parts of Indonesia. 2. Indonesian consumers prefer internationally well-known brands and imported products. but with the growth of the new generation of middle and high income consumers. agricultural and dairy products.6 million). New Zealand food and beverage exporters are advised to check with their Indonesian customers or partners what the exact process is. Branded and high quality food and beverage products are in demand. To acquire an import licence.1 Market Entry Strategies Indonesia is a price sensitive market. a company needs to have at least 20 brands in its portfolio. clean. Bali is a popular tourism destination and there is a demand for quality products from hotels and restaurants. which are aimed at protecting local producers of horticultural. New Zealand companies need to continuously promote the overall New Zealand image for the benefit of their products. The specified time limit for BPOM to issue registration is 45 working days. high quality and healthy products. All imported food and beverage products must be registered by Indonesia’s National Agency for Food and Drugs Control (BPOM). It is recommended that New Zealand food and beverage products focus on Jakarta (with a population of 9. the market holds little knowledge about the range of products New Zealand sells.2 MARKET ENTRY AND DEVELOPMENT 2.
With the right pricing and product positioning strategies. restaurant and catering) markets.5 Pricing New Zealand products face stiff competition from other imported products. particularly products from Asian countries. 2. New Zealand companies must provide the necessary documentation including a letter of appointment for the Indonesian importer. Mark-ups for imported products will include: import agent fees custom duties value added tax (VAT) of 5-10 percent 13/ Exporter Guide | Indonesia | Food and Beverage | February 2012 .4 Distribution Channels The best market penetration strategy is to appoint a local importer who has an established network across Indonesia. This will enable New Zealand businesses to access the retail market and also the HORECA (hotel.2. Indonesian consumers are willing to pay for premium products. Importers will undertake the product registration on behalf of New Zealand companies.
php Indonesia National Agency of Drug and Food Control www.2 MARKET RESOURCES AND CONTACTS ASSOCIATIONS /ORGANISATION ASEAN New Zealand Combined Business Council Halal Indonesia The Federation of Islamic Associations of New Zealand (FIANZ) WEBLINK www.pom. NZTE.interfood-indonesia. Market sizes.nzte. The information in this publication is general.govt. i ii iii iv v vi vii viii Euromonitor International.nz www.nzte. Euromonitor International.id WEBLINK www. The New Zealand Herald. Consumer Food Service in Indonesia. You are advised to carry out your own independent assessment of this opportunity.com www.Indonesia 14/ Exporter Guide | Indonesia | Food and Beverage | February 2012 .go.co.nz www. its officers.info WEBLINK www.govt.com www. company/ies or individual/s mentioned.agri-indo. New Zealand Trade and Enterprise is not responsible for any adverse consequences arising out of such use.Indonesia Euromonitor International. and no responsibility is accepted with respect to the standing of any firm/s. Indonesia to join regional FTA. Indonesia: Country Profile APNZ.id/en/ www.org/ www. August 2011.govt.org. You release New Zealand Trade and Enterprise from all claims arising from this publication.nz/index. Retrieved from www.com www.nz www.asean. restaurant and institutions market in Southeast Asia www. Packaged food .id ASEAN Australia New Zealand Free Trade Agreement Guide Ministry of Health Republic of Indonesia Directorate General of Customs & Excise TRADE EVENTS InterFood Indonesia Fish and Seafood Indonesia Agri Indo Jakarta Fashion & Food Festival OTHER NZTE PUBLICATIONS Indonesia Country Brief Wine Market in Southeast Asia Food and beverage in the hotel.fta.fisheryandseafoodexpo.beacukai. 26 August 2011. Alcoholic Drinks .asean.nz /www.Indonesia Business Monitor International.depkes. Packaging . it was prepared by New Zealand Trade and Enterprise (NZTE) from publicly available and/or subscription database sources.nzte. 2011. November 2010.nz Disclaimer: This publication is provided to you as a free service and is intended to flag to you market opportunities and possibilities. 15 November 2011.govt. Indonesia Euromonitor International.fianz. 9 August 2011. New Zealand Trade and Enterprise reserves the right to reuse any general market information contained in its reports. employees and agents accept no liability for any errors or omissions or any opinion/s expressed. Indonesia Food & Drink Report Q4 2011.go.co. and the suitability of these for your business is entirely at your own risk.nz Euromonitor International. Euromonitor International.go. February 2011.nzherald. Use of and reliance on the information/products/technology/concepts discussed in this publication. April 2011.halalindonesia.jfff.
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