Food and Beverage in Indonesia

Exporter Guide FOOD AND BEVERAGE IN INDONESIA Market Profile February 2012 This record is one of a progression of free data instruments for exporters created by New Zealand Trade and Enterprise. New Zealand Trade and Enterprise gives a wide scope of standard administrations and modern arrangements that help organizations through each phase of the fare procedure. For data or exhortation, telephone New Zealand Trade and Enterprise on 0800 555 888, visit www. nzte. govt. nz, or contact your New Zealand Trade and Enterprise customer chief. Substance 1 MARKET STRUCTURE 1. Market Overview 1. 2 1. 3 1. 4 1. 5 1. 6 2 Market Drivers Market Potential Import Trends Key Players in the Market Regulatory Sustainability 3 6 7 8 9 11 12 13 14 MARKET ENTRY AND DEVELOPMENT 2. 1 Market Entry Strategies 2. 2. 3 2. 4 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 Beve rage | February 2012 1 MARKET STRUCTURE Indonesia is the world’s fourth most crowded nation with a populace of 232. million out of 2010, and the biggest economy in Southeast Asia. In 2011, New Zealand’s food and refreshment trades totalled US$468. 3 million, making Indonesia New Zealand’s eleventh biggest fare goal. I In November 2011, Indonesia gave formal warning of the finishing of its inside endorsement methods to empower the ASEAN †Australia †New Zealand Free Trade Agreement (AANZFTA). From 10 January 2012, AANZFTA will open up impressive open doors for New Zealand organizations. The understanding will permit obligation/tax free access to more than 90 percent of New Zealand merchandise and ventures by 2015. I 1. 1 Market Overview In 2010 and 2011, dairy and meat items included more than 76 percent of New Zealand’s food and refreshment fares to Indonesia (2010: US$363 million; 2011: US$381 million). In 2010, Indonesia’s dairy and meat advertise merited an expected US$2 billion. Most of the populace in Indonesia, around 85 percent, are Muslim and all butchered food and meat (barring pork) must have halal accreditation. iii 3/Exporter Guide | Indonesia | Food and Beverage | February 2012 1. 1. Market by item classification Packaged food In 2010, Indonesia’s bundled food advertise was esteemed at US$19. 1 billion. The offer of drive and guilty pleasure items (I. e. chocolates) became because of expanding fortune. Sustenance and staples (I. e. rice) developed by 31 percent in 2010. Canned/saved food had a high development pace of 20 percent in 2010. Indonesia: Sales of Packaged Food by Category: Value 2005-2010 of every million USD 2007 Packaged Food †Total Nutrition/staples (I. e. rice) Dried Processed Food (I. e. dessert blends, moment soup) Impulse and Indulgence Products (I. e. hocolate covered bread rolls) Bakery Dairy Noodles Baby Food Confectionery Meal Solutions (I. e. tomato glues) Sweet and Sav ory Snacks Oils and Fats Sauces, Dressings and Condiments Frozen Processed Food Ice Cream Canned/Preserved Food Chilled Processed Food Spreads Meal Replacement (I. e. breakfast bars) Pasta Ready Meals (I. e. moment pasta) Snack Bars Soup 13,110 7,876 4,089 4,148 2,111 1,484 1,340 1,257 1,287 1,086 779 759 477 263 245 200 63 62 13 11 4 0. 9 3 2008 14,307 8,798 4,642 4,318 2,201 1,540 1,487 1,398 1,329 1,190 812 909 499 306 269 230 68 65 15 12 4 3 2009 14,817 ,167 4,909 4,404 2,238 1,596 1,526 1,496 1,360 1,244 832 845 510 327 278 251 68 66 16 13 4 3 2010 19,100 11,959 6,515 5,506 2,781 2,026 1,999 1,967 1,704 1,634 1,054 1,039 653 439 356 346 86 82 21 17 5 4 Source: Euromonitor International (NB: IDR/USD cash; [2007] 9141, [2008] 9699, [2009] 10389. 9, [2010] 9090. 4) 4/Exporter Guide | Indonesia | Food and Beverage | February 2012 Fresh food In 2010, the new food advertise in Indonesia had an absolute volume of 48. 1 million tons, making Indonesia the fifth biggest new food advertis e on the planet. During the period 20052010, request of new food expanded by 13 percent. v Indonesia: Fresh food advertise in Indonesia in million tons Starchy Roots Fruits Vegetables Fish and Seafood Meat Sugar and Sweeteners Eggs Nuts Pulses 2007 14,985 10,386 9,095 5,016 1,969 1,778 743 671 222 2008 15,148 10,786 9,356 5,153 2,024 1,825 761 700 224 2009 15,309 11,147 9,613 5,291 2,078 1,872 777 730 227 2010 15,455 11,489 9,868 5,432 2,138 1,914 794 762 230 2011f 15,582 11,787 10,119 5,592 2,188 1,952 808 798 234 Source: Euromonitor International (NB: 2011 estimates) Wineiv In 2011, the Indonesian wine showcase was worth roughly US$32 million (RP 275. 4 billion) and retail deals totalled 3. million liters. Wine represented just 3 percent of absolute liquor deals. Brew is significantly progressively well known as a mixed refreshment. During the period 2008-2010, wine volume deals declined by 6 percent. While costs expanded, the interest from Indonesian buyers with high dispensable livelihoods and exiles remained and the quantity of wine aficionados in Indonesia developed. The development was affected by western culture and wine occasions, for example, wine sampling, wine suppers and classes. The wine showcase indicated an expansion in deals by estimation of 61 percent during the period 2008-2010. Indonesia: Wine Sales Off-exchange Value million USD Off-exchange Volume million liters 2006 12. 0 3. 3 2007 14. 0 3. 4 2008 15. 0 3. 4 2009 16. 0 3. 3 2010 28. 0 3. 2 2011 32. 0 3. 1 Source: Euromonitor International (NB: IDR/USD money; [2006] 9159. 3, [2007] 9141, [2008] 9699, [2009] 10389. 9, [2010] 9090. 4, [2011] 8696. 1) 1. 1. 2 Market by appropriation divert Mass basic food item retail In 2011, customary retailers, involving little free stores and outside business sectors, represented an expected 77 percent of the absolute retail deals. vii 5/Exporter Guide | Indonesia | Food and Beverage | February 2012In the sorted out retail division, Hypermarkets had the b iggest piece of the overall industry in 2010, with US$13. 6 billion in deals, trailed by grocery stores (US$11 billion) and accommodation stores/scaled down business sectors (US$5 billion). During the period 2005-2010, grocery store deals expanded by 112 percent, trailed by hypermarkets (109 percent) and accommodation stores/small markets (105 percent). Mass Grocery Retail Sector †Estimated Number of Outlets 2005 Total Convenience Stores/Mini-Markets Supermarkets Hypermarkets Source: Business Monitor International 2006 7,154 3,337 3,173 644 2007 8,530 3,953 3,830 747 2008 9,429 4,334 4,297 798 009 10,572 4,871 4,801 900 2010 11,524 5,299 5,252 973 5,912 2,758 2,652 502 1. 2 Market Drivers coming up next are seen as key drivers for the food and refreshment advertise in Indonesia: ? The food and refreshment advertise in Indonesia developed in 2010, recuperating from the overall downturn. Buying intensity of center and upper salary purchasers resuscitated with an expansion of extr a cash. Political and financial conditions balanced out and the quantity of current retail outlets and food administration retailers developed. vi Consumers are grasping the wellbeing cognizant pattern seen all through the world, because of introduction to wellbeing instruction through the media. I To fulfill the expanding need of taught and wellbeing cognizant shoppers, the Indonesian government has taken on activities, for example, the Merauke Integrated Food and Energy Estate venture. Through this US$5 billion venture, the administration hopes to create very nearly 2 million tons of rice, 2 million tons of corn, 2. 5 million tons of sugar, 937,000 tons of palm oil,167,000 huge amounts of soy beans and eating land for 64,000 dairy cattle. vii In April 2010, tax collection on wine expanded essentially bringing about an expansion in wine prices.Approximately 45 percent of the cost paid by shoppers is charge, including deals charge (VAT), extract and import charge. v While customary markets despite everything represent most of retail deals, they face more noteworthy weight on piece of the overall industry as present day retail turns out to be increasingly well known. While the administration attempted to debilitate the fast spread of current retail, it wasn’t effective in upholding its authoritative guidelines and present day retailers expanded in numbers by utilizing counterfeit allows now and again. iii ? ? ? ? 6/Exporter Guide | Indonesia | Food and Beverage | February 2012 1. 3 Market PotentialThe by and large food utilization is conjecture to develop by a compound yearly development rate (CAGR) of 9. 1 percent to 2015. vii Modern retail, for example, hypermarkets are anticipated to increment in numbers as urban focuses grow and request increments for accommodation and included worth items (I. e. rice and noodle prepared suppers). Nonetheless, most shoppers in Indonesia remain value delicate and private name will be a famous option as it is seen as a cceptable worth as opposed to modest. vii The offer of mixed drinks is relied upon to decay with a CAGR of 2. 3 percent during 2010-2015. Notwithstanding, wine is gauge to develop with a CAGR of 1. percent during 20102015 as wine is seen to be a more advantageous choice than other mixed drinks, for example, lager. v Indonesia has a monstrous youth populace of around 40. 9 million, matured somewhere in the range of 15 and 24. This age bunch will in general be more westernized contrasted with the more established populace and is anticipated to drive interest for mass market items, for example, confectionary merchandise. vii There are open doors for items focused to improve the state of explicit medical issues. These items incorporate calcium invigorated milk to forestall osteoporosis, dairy milk for nursing moms, infant food and items for weight and cholesterol decrease. I 1. 4 Import Trendsvii In 2010, Indonesia imported an expected US$8. 1 billion, a development of 25 percent from 2 009. Indonesia is moderately versatile to worldwide exchange instability yet dependent on dairy and poultry imports to fulfill need. Indonesia: Food and Beverage Trade in million USD 2009 Exports Imports Balance 18,756 6,476 12,280 2010e 24,765 8,120 16,645 2011f 30,406 9,573 20,833 2012f 36,517 11