CHEESE IN INDONESIA

Euromonitor International
August 2018
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LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Prospects ..................................................................................................................................... 1
Cheese Gains Popularity Within Foodservice in Indonesia ...................................................... 1
New Product Launches Support the Growing Demand for Cheese in Indonesia ...................... 1
Opportunities for Manufacturers in the Forecast Period ........................................................... 1
Competitive Landscape ................................................................................................................ 2
Cheese Is Led by International Players .................................................................................... 2
the Rise of Domestic Players .................................................................................................... 2
Modern Grocery Retailers Remains the Main Distribution Channel for Cheese ....................... 2
Category Data .............................................................................................................................. 2
Table 1 Sales of Cheese by Category: Volume 2013-2018 ...................................... 2
Table 2 Sales of Cheese by Category: Value 2013-2018 ......................................... 3
Table 3 Sales of Cheese by Category: % Volume Growth 2013-2018 ...................... 3
Table 4 Sales of Cheese by Category: % Value Growth 2013-2018 ......................... 3
Table 5 Sales of Spreadable Processed Cheese by Type: % Value 2013-2018 ....... 4
Table 6 Sales of Unprocessed Cheese by Type: % Value 2013-2018 ...................... 4
Table 7 NBO Company Shares of Cheese: % Value 2014-2018 .............................. 4
Table 8 LBN Brand Shares of Cheese: % Value 2015-2018 ..................................... 5
Table 9 Distribution of Cheese by Format: % Value 2013-2018................................ 5
Table 10 Forecast Sales of Cheese by Category: Volume 2018-2023........................ 6
Table 11 Forecast Sales of Cheese by Category: Value 2018-2023........................... 6
Table 12 Forecast Sales of Cheese by Category: % Volume Growth 2018-2023 ....... 6
Table 13 Forecast Sales of Cheese by Category: % Value Growth 2018-2023 .......... 7

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CHEESE IN INDONESIA
HEADLINES
 In 2018, cheese registers 14% retail volume growth and 16% current value growth, to reach
12,900 tonnes and IDR1.6 trillion
 The numerous product launches and varieties available in cheese drive growth
 Other processed cheese registers the fastest retail current value growth of 16% in 2018,
reaching IDR1.6 trillion
 The average unit price of cheese increases slightly in current terms in 2018
 Multinational players lead cheese in 2018, led by Kraft Ultrajaya Indonesia with a 60% value
share
 Cheese in Indonesia is expected to increase by a retail value CAGR of 12% at constant 2018
prices over the forecast period to reach IDR2.9 trillion in 2023

PROSPECTS

Cheese Gains Popularity Within Foodservice in Indonesia

In Indonesia, the use of cheese is more common in foodservice than in households – this is
primarily because cheese does not originate from Indonesia, and consumers are not in the habit
of consuming cheese regularly at home. In 2018, the overall consumption of cheese increased,
driven by fusion cuisine in foodservice. In terms of local cuisine, cheese is now being used in
dishes such as Ayam Keprek Keju (smashed fried chicken with cheese) and fried banana
nuggets with cheese; in terms of foreign cuisine, cheese is increasingly being used in Korean
and Japanese foodservice outlets in Indonesia as a garnish for dishes such as Korean fried
chicken, sushi and yakitori. As the use of cheese widens, consumers are expected to become
more accustomed to consuming cheese, which will drive demand in retail channels. Over the
forecast period, the demand for cheese is likely to increase on the back of habit persistence,
and as consumers become more aware of the different uses and applications for cheese.

New Product Launches Support the Growing Demand for Cheese in

Indonesia
In light of the increasing demand for cheese in Indonesia, manufacturers responded by
launching different varieties of cheese in the country. Historically, the number of variants of
cheese in the market was low, and current product launches are varied in terms of type, taste
and format. Mozzarella cheese variants, such as Greenfield Mozzarella Cheese by Greenfields
Indonesia, were observed in the market, and new flavours of cheese were introduced by Unibel
– Babybel Swiss Taste and Babybel Cheddar. Unibel also introduced La Vache Qui Rit Belcube
as a product extension.

Opportunities for Manufacturers in the Forecast Period

The diversity of new product launches is indicative of how quickly consumers are adopting the
consumption of cheese, and this is expected to continue over the forecast period. As the market
for cheese is expected to develop rapidly, there are opportunities for manufacturers to decide
their overall strategy in cheese in Indonesia. Regardless of whether the approach is mass or
targeted towards specific consumers and/or product categories, manufacturers must be aware

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that the perception of cheese amongst consumers is what will drive demand for their products,
and that these perceptions are malleable.

COMPETITIVE LANDSCAPE

Cheese Is Led by International Players

In Indonesia, international players account for the majority of value sales of cheese, due to
their knowledge of the production of such products, which is unknown to Indonesian
manufacturers. Furthermore, their historic presence in Indonesia has allowed them to have the
edge in terms of distribution channel coverage and consumer awareness of their brands. They
have also localised their products to suit the taste profiles of Indonesians to increase product
adoption; for instance, Kraft by Kraft Ultrajaya Indonesia has a product that combines elements
from Ayam Panggang, a local barbeque chicken dish.

the Rise of Domestic Players

Although sales of cheese are still currently dominated by international players, domestic
players are expected to launch new products with lower prices to compete, due to the increasing
demand for cheese, such as Prochiz by Mulia Boga Raya. Domestic players may have the edge
over the forecast period, as they are more in tune with local preferences, such as the level of
salt that Indonesian consumers may prefer, and are able to lower their production costs if they
produce such products locally. As consumer education is a factor driving the growth of cheese,
localised promotional efforts by domestic players may also lead to additional returns on
investment. Domestic players are expected to continue to capture share from international
players over the forecast period.

Modern Grocery Retailers Remains the Main Distribution Channel for

Cheese
Historically, cheese was sold predominantly via modern grocery retailers, as there are factors
that hinder its distribution, such as its relatively high price and the equipment necessary to store
cheese at appropriate temperatures. Supermarkets and hypermarkets are the two main
distribution channels in retail value sales of cheese, whereas sales of cheese via convenience
stores are far lower. However, following the rapid expansion of convenience stores, this channel
showed the fastest increase in the review period. In particular, convenience stores are placing
more chillers in their outlets to allow chilled dairy products to be stored and sold. Leading brands
such as La Vache Qui Rit and Kiri a la Crème by Unibel are now available in convenience
stores, which has proved to be quite disruptive to distribution, as convenience stores only used
to carry cheese variants that did not require cold storage. Over the forecast period, consumers
are likely to switch from supermarkets and hypermarkets to more easily accessible retail outlets
such as convenience stores, and manufacturers are also likely to focus their efforts on this
channel.

CATEGORY DATA
Table 1 Sales of Cheese by Category: Volume 2013-2018

'000 tonnes
2013 2014 2015 2016 2017 2018

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Processed Cheese 7.0 7.8 8.8 9.9 11.2 12.8

- Spreadable Processed 0.0 0.1 0.1 0.1 0.1 0.1
Cheese
- Other Processed Cheese 6.9 7.7 8.7 9.8 11.2 12.7
Unprocessed Cheese 0.1 0.1 0.1 0.1 0.1 0.1
- Hard Cheese 0.1 0.1 0.1 0.1 0.1 0.1
-- Packaged Hard Cheese 0.1 0.1 0.1 0.1 0.1 0.1
-- Unpackaged Hard Cheese - - - - - -
- Soft Cheese - - - - - -
Cheese 7.0 7.9 8.8 10.0 11.3 12.9
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Sales of Cheese by Category: Value 2013-2018

IDR billion
2013 2014 2015 2016 2017 2018

Processed Cheese 792.2 895.0 1,042.0 1,207.9 1,394.5 1,621.0

- Spreadable Processed 8.8 9.6 10.5 11.4 12.5 13.7
Cheese
- Other Processed Cheese 783.5 885.3 1,031.4 1,196.4 1,382.0 1,607.3
Unprocessed Cheese 19.2 20.8 22.1 23.3 24.7 26.1
- Hard Cheese 19.2 20.8 22.1 23.3 24.7 26.1
-- Packaged Hard Cheese 19.2 20.8 22.1 23.3 24.7 26.1
-- Unpackaged Hard Cheese - - - - - -
- Soft Cheese - - - - - -
Cheese 811.5 915.7 1,064.1 1,231.2 1,419.1 1,647.1
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Sales of Cheese by Category: % Volume Growth 2013-2018

% volume growth
2017/18 2013-18 CAGR 2013/18 Total

Processed Cheese 13.9 12.9 83.7

- Spreadable Processed Cheese 3.2 2.8 14.7
- Other Processed Cheese 14.0 13.0 84.2
Unprocessed Cheese 2.9 2.4 12.6
- Hard Cheese 2.9 2.4 12.6
-- Packaged Hard Cheese 2.9 2.4 12.6
-- Unpackaged Hard Cheese - - -
- Soft Cheese - - -
Cheese 13.9 12.8 82.9
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Sales of Cheese by Category: % Value Growth 2013-2018

% current value growth

2017/18 2013-18 CAGR 2013/18 Total

Processed Cheese 16.2 15.4 104.6

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- Spreadable Processed Cheese 10.0 9.4 56.7

- Other Processed Cheese 16.3 15.5 105.1
Unprocessed Cheese 6.0 6.3 36.0
- Hard Cheese 6.0 6.3 36.0
-- Packaged Hard Cheese 6.0 6.3 36.0
-- Unpackaged Hard Cheese - - -
- Soft Cheese - - -
Cheese 16.1 15.2 103.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 Sales of Spreadable Processed Cheese by Type: % Value 2013-2018

% retail value rsp

2013 2014 2015 2016 2017 2018

Cream Cheese 19.0 19.5 21.5 25.0 30.0 35.0

Reconstituted Cheese 81.0 80.5 78.5 75.0 70.0 65.0
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 6 Sales of Unprocessed Cheese by Type: % Value 2013-2018

% retail value rsp

2013 2014 2015 2016 2017 2018

Cheddar 50.0 50.5 51.0 51.5 52.0 52.5

Others 50.0 49.5 49.0 48.5 48.0 47.5
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 NBO Company Shares of Cheese: % Value 2014-2018

% retail value rsp

Company 2014 2015 2016 2017 2018

Kraft Ultrajaya 61.4 61.1 60.7 60.4 59.6

Indonesia PT
Mulia Boga Raya PT 13.5 16.0 18.9 21.0 22.1
Megsnow Milk Brand - - 3.4 4.6 5.1
Indonesia PT
Mondelez Indonesia PT - 1.9 2.9 3.0 3.0
Unibel SA 2.5 2.4 2.4 2.5 2.6
Dairygold Indonesia PT 3.6 3.4 3.1 2.8 2.5
Bega Co-operative 1.7 1.7 1.6 1.6 1.6
Society Ltd, The
Fonterra Brands 8.7 5.8 - - -
Indonesia PT
Others 8.6 7.7 6.9 4.0 3.4
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

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Table 8 LBN Brand Shares of Cheese: % Value 2015-2018

% retail value rsp

Brand (GBO) Company (NBO) 2015 2016 2017 2018

Kraft (Kraft Heinz Kraft Ultrajaya 61.1 60.7 60.4 59.6

Co) Indonesia PT
Prochiz Mulia Boga Raya PT 16.0 18.9 21.0 22.1
Meg (Megsnow Milk Megsnow Milk Brand - 3.4 4.6 5.1
Brand Co Ltd) Indonesia PT
Dairylea (Mondelez Mondelez Indonesia PT 1.9 2.9 3.0 3.0
International Inc)
Cheesy (Dairygold Dairygold Indonesia PT 3.4 3.1 2.8 2.5
(Australia) Pty Ltd)
Bega (Bega Cheese Bega Co-operative 1.7 1.6 1.6 1.6
Ltd) Society Ltd, The
La Vache Qui Rit Unibel SA 1.2 1.2 1.2 1.2
(Bel, Groupe)
Babybel (Bel, Groupe) Unibel SA 0.9 0.9 1.0 1.1
Kiri (Bel, Groupe) Unibel SA 0.3 0.4 0.4 0.4
Chesdale (Fonterra Fonterra Brands 5.8 - - -
Co-operative Group Indonesia PT
Ltd)
Bonbel (Bel, Groupe) Unibel SA 0.1 - - -
Kraft (Kraft Foods Kraft Ultrajaya - - - -
Group Inc) Indonesia PT
Kraft (Kraft Foods Kraft Ultrajaya - - - -
Inc) Indonesia PT
Others Others 7.7 6.9 4.0 3.4
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 9 Distribution of Cheese by Format: % Value 2013-2018

% retail value rsp

2013 2014 2015 2016 2017 2018

Store-Based Retailing 100.0 100.0 100.0 100.0 100.0 100.0

- Grocery Retailers 100.0 100.0 100.0 100.0 100.0 100.0
-- Modern Grocery 84.5 85.0 85.5 86.0 88.2 88.6
Retailers
--- Convenience Stores 10.0 10.2 10.5 11.0 12.0 12.3
--- Discounters - - - - - -
--- Forecourt Retailers - - - - - -
--- Hypermarkets 37.0 37.8 38.5 39.0 40.0 40.1
--- Supermarkets 37.5 37.0 36.5 36.0 36.2 36.2
-- Traditional Grocery 15.5 15.0 14.5 14.0 11.8 11.4
Retailers
--- Food/drink/tobacco - - - - - -
specialists
--- Independent Small 15.5 15.0 14.5 14.0 11.8 11.4
Grocers
--- Other Grocery - - - - - -
Retailers
- Non-Grocery Specialists - - - - - -
-- Health and Beauty - - - - - -

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Specialist Retailers
-- Other Foods Non- - - - - - -
Grocery Specialists
- Mixed Retailers - - - - - -
Non-Store Retailing - - - - - -
- Vending - - - - - -
- Homeshopping - - - - - -
- Internet Retailing - - - - - -
- Direct Selling - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 10 Forecast Sales of Cheese by Category: Volume 2018-2023

'000 tonnes
2018 2019 2020 2021 2022 2023

Processed Cheese 12.8 14.7 17.0 19.7 22.9 26.8

- Spreadable Processed 0.1 0.1 0.1 0.1 0.1 0.1
Cheese
- Other Processed Cheese 12.7 14.6 16.9 19.6 22.9 26.7
Unprocessed Cheese 0.1 0.1 0.1 0.1 0.1 0.1
- Hard Cheese 0.1 0.1 0.1 0.1 0.1 0.1
-- Packaged Hard Cheese 0.1 0.1 0.1 0.1 0.1 0.1
-- Unpackaged Hard Cheese - - - - - -
- Soft Cheese - - - - - -
Cheese 12.9 14.8 17.1 19.8 23.0 26.9
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 11 Forecast Sales of Cheese by Category: Value 2018-2023

IDR billion
2018 2019 2020 2021 2022 2023

Processed Cheese 1,621.0 1,814.7 2,035.3 2,286.8 2,574.1 2,902.7

- Spreadable Processed 13.7 14.5 15.5 16.6 17.8 19.2
Cheese
- Other Processed Cheese 1,607.3 1,800.1 2,019.8 2,270.2 2,556.3 2,883.5
Unprocessed Cheese 26.1 26.7 27.3 27.9 28.6 29.4
- Hard Cheese 26.1 26.7 27.3 27.9 28.6 29.4
-- Packaged Hard Cheese 26.1 26.7 27.3 27.9 28.6 29.4
-- Unpackaged Hard Cheese - - - - - -
- Soft Cheese - - - - - -
Cheese 1,647.1 1,841.4 2,062.5 2,314.7 2,602.7 2,932.1
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 12 Forecast Sales of Cheese by Category: % Volume Growth 2018-2023

% volume growth
2018/19 2018-23 CAGR 2018/23 Total

Processed Cheese 14.9 16.0 109.6

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- Spreadable Processed Cheese 3.3 3.5 18.8

- Other Processed Cheese 15.0 16.0 110.0
Unprocessed Cheese 3.2 3.6 19.3
- Hard Cheese 3.2 3.6 19.3
-- Packaged Hard Cheese 3.2 3.6 19.3
-- Unpackaged Hard Cheese - - -
- Soft Cheese - - -
Cheese 14.9 15.9 109.0
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 13 Forecast Sales of Cheese by Category: % Value Growth 2018-2023

% constant value growth

2018/2019 2018-23 CAGR 2018/23 Total

Processed Cheese 11.9 12.4 79.1

- Spreadable Processed Cheese 6.0 7.0 40.2
- Other Processed Cheese 12.0 12.4 79.4
Unprocessed Cheese 2.0 2.4 12.6
- Hard Cheese 2.0 2.4 12.6
-- Packaged Hard Cheese 2.0 2.4 12.6
-- Unpackaged Hard Cheese - - -
- Soft Cheese - - -
Cheese 11.8 12.2 78.0
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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