According to Euromonitor, retail sales in the packaged food market in Indonesia are estimated to reach US$38.2 billion in 2022, making it by far the largest in Southeast Asia. That represents a growth rate of over nearly 27.5% or US$8.2 billion since 2018. The forecast for growth in this market is also promising. By the year 2026, the retail sales in the packaged food market in Indonesia is expected to reach US$50.6 billion, a growth rate of 32.2%, or US$12.3 billion from 2022. Show High growth categories in the forecast include:
FAS Jakarta reports that Indonesian grocery retail sales reached US$71 billion in 2021 (traditional grocery retailers held 76% of the market share). There are four players in the hypermarket space (Carrefour/Trans Mart, Giant, Hypermart, and Lotte Mart), and six in the supermarket segment (Alfa Midi, Hero, Superindo, Ranch Market & Farmers Market, Food Mart, The Food Hall). Major convenience stores include Indomaret and Alfamart. Convenience stores have contributed to the growth in sales of packaged food in Indonesia, as store expansions to rural areas have created opportunities to sell more packaged products across the country. Comparatively, the growth of supermarkets and hypermarkets has been slow, with total stores reaching only 1,794. The Covid-19 pandemic has negatively impacted several modern grocery stores, including retailer Hero Group which posted a sales decline of 33% in 2020. The company closed all its Giant supermarket outlets in July 2021. Other retailers such as Matahari Putra Prima (brand owner of Hyfresh, Foodmart, and Primo Supermarket) reported a 2020 sales decline of 22%. However, sales for modern grocery companies such as Supra Boga Lestari (brand owner of Ranch Market and Farmers Market), which specializes in high quality fresh products, increased by 26% due to store expansions and efficiencies. Indomaret continues to lead the category with more than 18,000 outlets across Indonesia, followed by Alfamart with nearly 15,000 outlets. About 90% of sales value for convenience stores in Indonesia is derived from these two companies, which have modern, integrated distribution systems and centralized procurement. Convenience stores are expected to continue to be the fastest growing grocery retail segment, with an average of 1,000 new outlet expansions each year. Convenience stores have demonstrated their resiliency and necessity during the pandemic, providing reasonably priced products closer to residential areas during periods of mobility restrictions. Hypermarkets and supermarkets are generally located in malls and shopping centers, and generally offer 5% to 30% imported food and beverage products. The percent of imported products can be as much as 60% for some premium or high-end stores. Those premium outlets target upper-middle income and high-income consumers with a large variety of imported products such as fresh fruits, meat, snacks, condiments, and dairy. Increasing demand for healthy food options has led to the expansion of specialty stores focusing on fresh meat, fruit and vegetables, and seafood. Found mostly in major urban areas, outlets such as Total Buah, Rumah Buah, Frestive, and All Fresh offer high quality fresh produce to middle-upper income consumers. Meatshops have also expanded, as demand for quality meat and seafood has increased. Stores such as Indoguna Meatshop, Goodwins Butchery, Celine Meatshop, Bumi Maestro Ayu, and Stevan Meatshop sell premium cuts of beef, fresh and frozen seafood, and condiments. Best Product Prospects: FAS Jakarta advises best prospective U.S. products for the Indonesian food retail market include fresh fruits, beef, cheese, snack foods, frozen food and sauces, dressings and condiments. FAS Jakarta reports the Indonesian foodservice industry is valued at USD$24.3 billion, making it the largest market in Southeast Asia. The top three players in the Indonesian foodservice sector include international fastfood chains KFC, McDonald’s, and Pizza Hut. Leading U.S. food prospects in this market include cheese, frozen potatoes, beef, fruits, pork, wine, and tree nut products. The Government of Indonesia’s vaccination program is expected to slowly ease social restrictions and boost recovery in the foodservice and tourism sectors. KFC, McDonald’s, and Pizza Hut dominate the fast-food chain sector in Indonesia, accounting for 49% of total fast-food sales. In 2020, International fast-food chains opened new outlets in primary and secondary cities to expand their network coverage. Among them is KFC, which opened 10 new outlets, including one store under the Taco Bell brand. This opening attracted a high level of interest among millennials and resulted in long queues during the first three months of the opening. In the fourth quarter of 2021, MAP Boga Adiperkasa, the Starbucks brand owner in Indonesia, re-opened the U.S.-based sandwich chain Subway after pulling out in the early 2000s. Middle-high and high end restaurants groups such as Boga Group, Ismaya Group and Union Group, which often mix international and local tastes, continue to expand their outlets across Jakarta, Bandung, Surabaya, Yogyakarta, and other growing urban areas. Often located in highend shopping malls, these restaurants frequently use higher quality imported ingredients and cater to a young, urban demographic that follows food trends and embraces a dine-out lifestyle as part of their social activity. Jakarta and Bali remain the ideal locations to target the HRI food service sector. These cities are home to many hotels and international restaurants that cater to sizeable expatriate communities, foreign visitors, and high-income consumers. Bali remains the ‘trendsetter’ in specialized cafés, hotel chains, and restaurants. Other large cities such as Surabaya, Bandung, Medan, Batam, Balikpapan, Lombok, and Makassar also have potential for import growth. Since the government eased its Covid-19 mobility restrictions, Indonesians have begun to flock back to restaurants, malls, and cafes, which provide a great opportunity for U.S. exporters of food ingredients and consumer-oriented products to increase sales in Indonesia. Products such as meats (red meats, processed meats), seafood, condiments, fresh fruits, and other consumer-oriented products are in high demand from hotels and restaurants. They utilize these products to offer a wider variety of international cuisine to local consumers as well as international visitors. The number of hotels in Indonesia increased significantly from 16,685 to 30,823 hotels, offering 870,783 rooms (2013 – 2020). Although most international hotel chains are in Jakarta, Bali, Bandung, Surabaya, Yogyakarta and Medan, more are expanding into secondary cities due to infrastructure development and promotion of new tourist destinations. As a result of Covid-19, star-rated hotels hit record low occupancy rates in 2021, registering just 22.3 in July. The low numbers were driven by the increase of positive COVID-19 cases in a second wave that forced the government to impose the emergency public activity restrictions. In 2020, foreign tourist arrivals reached 4 million, a decline 73% year on year. Visitors from Asian countries accounted for 77% of total tourist arrivals. Indonesia’s catering industry comprises four categories: hospitality (i.e., hotel, weddings, and other events), institutional, online, and in-flight catering. Hospitality, institutional and online catering services are highly fragmented. Services offered in these categories range from five-star hotels and large institutional suppliers to individually run boutique catering businesses and lowcost providers. The hospitality sector was quickly growing prior to Covid-19, especially wedding receptions. The sector generated an estimated annual expenditure of US$4 billion, of which 70%–80% were food and beverage sales. Best Product Prospects: FAS Jakarta advises that the HRI industry will continue as a leading consumer of imported food items. Opportunities for high-value U.S. food items include milk and cream powder and cheese, fresh fruits and vegetables, processed fruit, food preparations and ingredients, red meats, (Halal), french fries, bakery dough, butter, fruit and vegetable juices, breakfast cereals and pancake mix and tree nuts. FAS Jakarta reports that there are approximately 7,868 large and medium-sized food and beverage manufacturers and 1.6 million micro and small establishments in Indonesia. The number of Indonesian workers in the food and beverage processing industry stands at 4.6 million or 28% of the total workforce in the manufacturing sector. Large and medium-sized food processors in Indonesia source raw materials both locally and globally. Large food processors directly import ingredients such as wheat, milk powder, cheese, meat, and horticultural products. Food processors usually purchase small quantities of additives, flavors, or preservatives through general importers or distributors. The Indonesian food processing industry serves a domestic population of 277 million and is increasingly seeking new export markets in the region and globally. According to Statistics Indonesia (BPS), Indonesia’s economy grew close to 3.7% in 2021, a rebound from the 2020 pandemic-induced recession, marked by the resumption of normal investment and business activities. Java Island remained Indonesia’s main economic driver in 2021, accounting for 58% of the country’s economy. The domestic food manufacturing industry is growing, driven by growing middle and upper-income consumption, which constitutes 82% of national food consumption. Indonesia is Southeast Asia’s largest economy and continues to offer significant market potential for U.S. suppliers of food and ingredients, including consumer-oriented products such as fresh fruits and nuts, as well as products utilized in food processing including soybeans, wheat, milk powder and other dairy products, corn (wet milling), and beef. Increasingly Indonesians are consuming more processed and packaged foods, including frozen desserts, processed fruits and vegetables, and various chips and snacks. As more women in urban areas enter the workforce and have less time to prepare meals for their families, the market for convenient, processed food products is expected to grow. In Indonesia, women remain the primary grocery shoppers and meal planners of households and so have the most decision-making power over household food purchases. The Ministry of Industry has reported that 60% of the food and beverage industry’s raw materials come from imports. Additionally, the Indonesian Food and Beverage Industry Association (GAPPMI) notes that it imports 80% of milk ingredients, 70% of soybeans, 100% of sugar, and 80% of certain salts that it uses in its manufacturing. Indofood continues to lead the packaged food market in Indonesia. The company has a wideranging product portfolio, including local and multinational brands. Other major processors include Nestlé and Royal Friesland Campina (Frisian Flag). Many of their products are sold through modern stores. The rapid expansion of convenience stores, which mostly stock locally produced products, has helped to expand the distribution of packaged food throughout Indonesia. Despite the economic slowdown during the pandemic, in 2021, exports of U.S. agricultural products to Indonesia increased by 9% largely due to higher demand for soybean, beef, and corn. However, Australia overtook the United States as the largest supplier of imported agricultural products to Indonesia for the first time in seven years due mainly to a substantial increase in Australian wheat exports to Indonesia in 2021. Indonesia has implemented trade agreements with ASEAN countries, the People’s Republic of China, Chile, the Republic of Korea, India, Japan, Hong Kong, New Zealand, Australia, and Pakistan in the form of Comprehensive Economic Partnership Agreements, Free Trade Agreements, and Preferential Trade Agreements. Agricultural products from those countries, such as milk powder, beef, apples, grapes, cheese, and oranges, enter the market at more competitive rates than U.S. products. However, many U.S. products continue to increase their market share based on price, quality, and availability. Best Product Prospects: The market presents significant opportunities for a range of U.S. agricultural products, including consumer-oriented products: dairy, fresh fruit, beef and beef products, tree nuts, powdered cheese, and dried egg yolk. Intermediate agricultural products: sugar and sweeteners, textured soy protein, cornstarch, natural honey, odoriferous substances. FAS Jakarta advises that primary ingredients such as wheat, refined sugar, soybeans, dairy, fresh fruit, and processed fruit have high demand and are frequently imported. Blending products used for enriching products such as corn starch, potato starch, dehydrated potato, garlic powder, onion powder, and chili powder are also in demand. Coffee extracts or concentrates fresh fruits and vegetables, cheese and tree nuts are also in demand. Who are the top 5 exporters of agricultural products?The world's top five food exporters: the United States, Canada, France, Australia, Argentina. Because the United States has vast land and advanced agricultural technology. And compared to Asian countries, the United States also has a certain advantage in population. What is Indonesia's largest agricultural export?The country's top export products are palm oil, cocoa, coffee, rice, spices, tea, coconuts, fruit and tobacco. What is Indonesia's top major export?Mineral fuels, including coal, natural gas, and petroleum, are the primary exports of Indonesia. The country is one of the world's largest producers and exporters of coal. Key trading partners for Indonesian mineral fuels and oils are China, Japan, India, and Singapore. What is the main agricultural export of Indonesia?Indonesia is one of the world's largest producers and exporters of agricultural products, supplying important commodities such as palm oil, natural rubber, cocoa, coffee, rice, and spices to the rest of the world. |
