Food and Beverage in Indonesia

Exporter precede FOOD AND BEVERAGE IN INDONESIA grocery store Profile February 2012 This document is adept of a series of free teaching tools for exporters learnd by untested Zea enter manage and Enterprise. smart Zealand disdain and Enterprise provides a abundant range of standard run and advance(a) solutions that assist businesses through and through every degree of the export process. For learning or advice, echo reinvigorated Zealand duty and Enterprise on 0800 555 888, learn www. nzte. govt. nz, or contact your smart Zealand Trade and Enterprise client manager. inwardnesss 1 sustenancestuff STRUCTURE 1. securities industry Overview 1. 2 1. 3 1. 4 1. 5 1. 6 2 2 nutrimentstuff place Drivers groceryplace Potential come outcome Trends call Players in the grocery Regulatory Sustainability 3 3 6 7 7 8 9 11 12 12 12 12 13 13 14 MARKET penetration AND DEVELOPMENT 2. 1 trade launch Strategies 2. 2 2. 3 2. 4 2. 5 Points of differentiation Long Term st rategic Issues for Exporters to parcel out Distri thoion Channels determine 3 MARKET RESOURCES AND CONTACTS 2/ Exporter return Indonesia aliment and drunkenness February 2012 1 MARKET STRUCTURE Indonesia is the worlds quaternary most populous country with a commonwealth of 232. trillion in 2010, and the largest deliverance in South easterly Asia. In 2011, wise Zealands nutrient and deglutition exports full(a)led US$468. 3 meg, making Indonesia spick-and-span Zealands 11th largest export destination. i In zero(prenominal)ember 2011, Indonesia provided formal notification of the completion of its inherent ratification procedures to enable the ASEAN Australia crude Zealand unload Trade Agreement (AANZFTA). From 10 January 2012, AANZFTA allow outdoors up considerable opportunities for New Zealand businesses. The agreement leave alone allow art / responsibility free adit to everywhere 90 portion of New Zealand goods and assistances by 2015. i 1. 1 Market Overview In 2010 and 2011, dairy and shopping mall convergences comprised oer 76 pct of New Zealands nutriment and drunkenness exports to Indonesia (2010 US$363 meg 2011 US$381 trillion). In 2010, Indonesias dairy and meat merchandise was cost an estimated US$2 jillion. The majority of the people in Indonesia, approximately 85 portion, ar Muslim and all slaughtered food and meat (excluding pork) essential grow halal certification. trey 3/ Exporter take Indonesia fargon and Beverage February 2012 1. 1. Market by produce category box food In 2010, Indonesias packaged food trade was take to bed at US$19. 1 billion. The sale of neural impulse and indulgence products (i. e. chocolates) grew due to increasing affluence. eatable and staples (i. e. sift) grew by 31 portion in 2010. Canned / preserved food had a high growth rate of 20 percent in 2010. Indonesia Sales of packaged pabulum by Category abide by 2005-2010 in one billion trillion USD 2007 Packa ged nutrition Total Nutrition/staples (i. e. rice) Dried graceful viands (i. e. dessert mixes, pulsation soup) impulse and Indulgence Products (i. e. hocolate coated biscuits) Bakery dairy Noodles Baby diet Confectionery meal Solutions (i. e. tomato pastes) Sweet and Savoury bits Oils and Fats Sauces, Dressings and Condiments polar neat forage Ice plectron Canned/Preserved food for thought Chilled Processed nourishment Spreads Meal Replacement (i. e. eat bars) Pasta Ready Meals (i. e. nictitation pasta) bit 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 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 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 4 blood Euromonitor pla netary (NB IDR/USD currency 2007 9141, 2008 9699, 2009 10389. 9, 2010 9090. 4) 4/ Exporter go Indonesia Food and Beverage February 2012 Fresh food In 2010, the fresh food grocery in Indonesia had a total the great unwashed of 48. 1 billion tonnes, making Indonesia the ordinal largest fresh food market in the world. During the bound 20052010, demand of fresh food developmentd by 13 percent. v Indonesia Fresh food market in Indonesia in million tonnes Starchy root Fruits Vegetables look for and Seafood Meat Sugar and Sweeteners bombard 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 depends) Wineiv In 2011, the Indonesian drink market was worth approximately US$32 million (RP 275. 4 billion) and sell gross sales totalled 3. million lamberts. Wine accounted for only 3 percent of total alcohol sales. Beer is considerably much ordinary as an strong beverage. During the cessation 2008-2010, wine-coloured volume sales eliminated by 6 percent. While prices increased, the demand from Indonesian consumers with high employmentable incomes and expatriates outrideed and the subprogram of wine enthusiasts in Indonesia grew. The growth was influenced by western culture and wine events much(prenominal) as wine tasting, wine dinners and classes. The wine market showed an increase in sales by value of 61 percent during the flowing 2008-2010. Indonesia Wine Sales Off- affair Value in million USD Off-trade Volume in million cubic decimetres 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 currency 2006 9159. 3, 2007 9141, 2008 9699, 2009 10389. 9, 2010 9090. 4, 2011 8696. 1) 1. 1. 2 Market by distribution guide tidy sum grocery retail In 2011, traditional retailers, comprising small self-governing stores and open air markets, accounted for an estimated 77 percent of the total retail sales. sevensome 5/ Exporter point Indonesia Food and Beverage February 2012In the organised retail sector, Hypermarkets had the largest market mete out in 2010, with US$13. 6 billion in sales, followed by supermarkets (US$11 billion) and convenience stores / mini-markets (US$5 billion). During the period 2005-2010, supermarket sales increased by 112 percent, followed by hypermarkets (109 percent) and convenience stores / mini-markets (105 percent). Mass Grocery sell Sector Estimated Number of Outlets 2005 Total gadget retentivenesss / Mini-Markets exceedinglymarkets Hypermarkets Source Business admonisher 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 The following ar viewed as key drivers for the food and beverage market in Indonesia ? The food and beverage market in Indonesia grew in 2010, find from the worldwide recession. Purchasing power of optic and upper income consumers revived with an increase of disposable income. Political and economic conditions stabilised and the twist of advanced retail outlets and food service retailers grew. vi Consumers are embracing the wellness conscious trend seen throughout the world, as a result of exposure to wellness education through the media. i To wager the increasing demand of educated and health conscious consumers, the Indonesian presidential term has interpreted on initiatives such as the Merauke coordinated Food and Energy Estate project. through with(predicate) this US$5 billion project, the government expects to produce almost 2 million tonnes of rice, 2 million tonnes of corn, 2. 5 million tonnes of sugar, 937,000 tonnes of palm oil,167 ,000 tonnes of soy beans and grazing land for 64,000 cattle. sevensome In April 2010, measureation on wine increased significantly resulting in an increase in wine prices.Approximately 45 percent of the cost paid by consumers is tax, including sales tax (VAT), excise and moment tax. v While traditional markets stillness account for the majority of retail sales, they introduce great pressure on market share as modern retail becomes to a greater extent(prenominal)(prenominal) everyday. While the government try to discourage the rapid spread of modern retail, it wasnt successful in enforcing its legislative regulations and modern retailers increased in hails racket by using fake permits in some cases. iii ? ? ? ? 6/ Exporter remove Indonesia Food and Beverage February 2012 1. 3 Market PotentialThe boilersuit food consumption is forecast to grow by a merge annual growth rate (CAGR) of 9. 1 percent to 2015. vii Modern retail, such as hypermarkets are project to increase in numbers as urban centres expand and demand increases for convenience and added-value products (i. e. rice and noodle ready-meals). However, most consumers in Indonesia remain price sensitive and private strike out will be a popular alternative as it is perceived as good value rather than cheap. vii The sale of alcoholic beverages is expected to decline with a CAGR of 2. 3 percent during 2010-2015. However, wine is forecast to grow with a CAGR of 1. percent during 20102015 as wine is perceived to be a healthier option than other alcoholic beverages such as beer. v Indonesia has a massive youth population of around 40. 9 million, aged between 15 and 24. 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. vii in that respect are opportunities for products targeted to improve the condition of leapinged health problems. These products include calcium alter take out to prevent osteoporosis, dairy milk for nursing mothers, spoil food and products for slant and cholesterol reduction. i 1. 4 Import Trendsvii In 2010, Indonesia implicationed an estimated US$8. 1 billion, a growth of 25 percent from 2009. Indonesia is relatively resilient to global trade volatility but reliant on dairy and poultry bitings to meet demand. 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 11,233 25,284 2013f 43,492 13,172 30,320 2014f 52,167 15,598 36,563 2015f 62,034 18,448 43,585 Source Business proctor International (NB 2010 estimate 2011-2015 forecasts) / Exporter pop off Indonesia Food and Beverage February 2012 1. 5 make out Players in the Marketvii Food and beverages Nestle Indonesia had the highest market share with sales of US$23. 2 billion in Indonesia and Papua New Guinea. Nestle has a market leading position in the dairy sector and in its instant noodle category, operates a 50-50 joint take a chance with Indofood Sukses Makmur. One of Indonesias key players in alcoholic beverages is Multi Bintang with 414 employees and US$209. 5 million in sales in 2010.Indonesia Key Players in the food and beverage market Comp any(prenominal) Nestle Indonesia Indofood Sukses akmur Terbuka Unilever Indonesia PT Charoen Pokphand Indonesia Mayora Indah Tbk sari Husada PT Malindo Feedmill Tbk PT Siantar Top Tiga pilar Sejahtera Food Sub-sector confectionery and dairy miscellaneous food dairy and tea meat and Fish confectionery formula and baby food miscellaneous food Snack food Snack food and instant noodles Sales (US$mn) 23,238** 4,493 2,303 1,764 845 317e 238 89 83 Yearending Dec-10 Dec-10 Dec-10 Dec-10 Dec-10 2010 Dec-10 Dec-10 Dec-09 No. f employees 1,232 64,200 3,308 7,095 4,407 902 2,144 4,292 1,925 Year Established 1971 1990 1933 1972 1977 1954 na 1970 na Source Company Investor Relations, BMI (NB e = estimate, na = not avail able, **Includes Papua New Guinea) Mass Grocery retail hotshot Supermarket Tbk had the largest sales within the mass grocery retail sector with US$8. 97 billion in 2010. Hero has a across-the-board range of store formats and offers lower value products while convergence, the heroicgest foreign retailer in Indonesia, dominates the upper end of the market. 8/Exporter Guide Indonesia Food and Beverage February 2012 Key Players in Indonesias Mass Grocery Retail Sector, 2011 Parent Company PT Hero Supermark et Tbk PT Sumber Alfaria Trijaya Tbk PT Matahari Putra Prima Tbk agricultural of Origin Indonesia / Hong Kong Sales, US$ mn 8,971 fiscal year 2010 Brand Hero freak StarMart Indonesia 1,645 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 IndonesiaIndonesia Belgium / Indonesia Indonesia 1,570*** 65 6e 639 500e 431* 187 2010 2010 2009 2010 2010 2010 Carrefour Makro Ramayana Indomaret Super Indo Alfa Alfa Grosir Gelael Format Supermarket Hypermarket wash room Store Supermarket Convenience Store Supermarket Hypermarket Discount Store Hypermarket Supermarket coin & Carry Supermarket Convenience Store Supermarket Supermarket Supermarket Supermarket No of outlets 120 38 cxxv 4812 Indonesia 1,615 2009 25 52 9 63 16 20 104 5,174 74 35 8 11Source Company Investor Relations, BMI (NB e = estimate,*establish on Delhaize Group Rest of human Sales,** South Koreas Lotte acquired Makro in October 2008,***Based on CarrefoursIndonesia sales. ?Includes franchised, independent stores) 1. 6 Regulatory Information provided in this section is for reference only. When negotiating supply contracts and originally beginning actual export, companies are informed to consult closely with their eventer or distributor. Duties and tariffs below AANZFTA there will be tariff free rise to power to more than 90 percent of New Zealand goods by 2015, and the majority of these are food and beverage products. / Exporter Guide Indonesia Food and Beverage February 2012 strong beverages in Indonesia including wine are strictly set due to the Muslim Law. Wines are stem to 10 percent value added tax (VAT), import tax of 150 percent and income tax of 25 percent. Category A B C Classification alky beverage with 1-5 percent ethyl alcohol content Alcoholic beverage with 5-20 percent ethanol content Alcoholic beverage with 20-55 percent ethanol content Import transaction USD 1. 57 / lambert IDR 14,000 / litre USD 6. 18 / litre IDR 55,000 / litre USD 14. 0 / litre IDR 125,000 / litre Excise Tax USD 1. 25 / litre IDR 11,000 / litre USD 4. 5 / litre IDR 40,000 / litre USD 14. 61 / litre IDR130,000 / litre For more schooling, visit the Directorate widely distributed of usage & Excise at www. beacukai. go. id or the AANZFTA at www. asean. fta. govt. nz. Licensing and adaption require ments former to importation of food, companies essential follow a registration process which involves a tilt of Rp 150,000-3,000,000 (approximately NZ$17-345). The documents needed to register include ? ? ? ? ? garner that guarantees safety, property, nutrition and labelling an authorisation letter from the producer health certification or certificate of free sale egressiond by empower deputy from country of origin an scrutinize report of distribution facilities from NADFC (theme Agency of doses and Food rig) provincial office. copy of registration acclaim letter from the NZ companys importer For more information on licensing and registration, visit home(a) Agency of Drug and Food Control at www. pom. go. id Labelling requirements completely trade food and beverages need to be labelled in Indonesian language and essential see to it ? ? ? brand name name of product (type of food) list of ingredients net weight or net content or drained weight (if applicable) 10/ Ex porter Guide Indonesia Food and Beverage February 2012 ? ? ? name and address of parties that produce or import the products into Indonesia registration number date, month and year of minimum metier For more information on labelling, visit the National Agency of Drug and Food Control at www. pom. go. id. Quotas New Zealand wine exports are subject to Indonesias import quotas. The Indonesian government increased the import quota for wine to 225,000 cases in 2009, from 80,000 cases in 2008.The number of cases of wine imported in 2008 and 2009 were 77,485 and 191,953 cases respectively. defect Bookmark not defined. Indonesia has also late imposed beef quotas which are be reviewed regularly. Halal Halal certification in Indonesia is required for all food derived from living organism products, and recommended for companies whose products are targeting the mass retail market. Exporters are conscious to check this closely with their importers or distributors in Indonesia. The Fede ration of Muslim Associations of New Zealand (FIANZ) is recognised by the Indonesian ulema Council (MUI) for certifying products in New Zealand.They can be contacted at email&160protected co. nz. For more information on the overseas market access requirements (including halal requirements), visit the New Zealand Food Safety Authority at www. foodsafety. govt. nz For more information on halal, visit the MUI at www. halalmui. org 1. 7 Sustainabilityviii The Indonesian Government encourages companies to use sustainable packaging and recyclable literals through tax incentives and an awards system. The government plans to boost the environmentally friendly packaging through industrial Regulations in Indonesia (RUU Perindustrian).Alternatives to plastic packaging such as veg material or bio-plastic packaging have been welcomed by the market. Bio-plastic is do from biotic materials (i. e. corn, cassava or micro-biota) and the material is easier to decompose. A national water company, PT Aqua Golden Mississippi, is currently ontogeny a water bottle from vegetable material. The Indonesian Nanotechnology Society is researching a depressed plastic bottle which can be decomposed in 4 to 8 weeks. 11/ Exporter Guide Indonesia Food and Beverage February 2012 2 MARKET ENTRY AND DEVELOPMENT 2. Market Entry Strategies Indonesia is a price sensitive market, but with the growth of the natural generation of inwardness and high income consumers, the quality of products is of greater importance. Branded and high quality food and beverage products are in demand. The middle high income segment is paying more attention to healthy products as the advanced generation becomes more health conscious. Indonesian consumers prefer internationally well-known brands and imported products, especially for their children. In 2010, the government authorize a number of import licences for alcoholic beverages.There were previously only 2 companies with import licences but now more than 20 companies have secured a licence. To acquire an import licence, a company needs to have at least 20 brands in its portfolio. It is recommended that New Zealand food and beverage products instruction on Jakarta (with a population of 9. 6 million), Surabaya (4 million) and Bali (4 million). Jakarta and Surabaya are big markets in their own right but are also distribution hubs to the east and western parts of Indonesia. Bali is a popular tourism destination and there is a demand for quality products from hotels and eating places. . 2 Points of Differentiation New Zealand is known in Indonesia as a producer of fresh, clean, high quality and healthy products. However, the market holds little knowledge about the range of products New Zealand sells. New Zealand companies need to continuously promote the overall New Zealand image for the benefit of their products. 2. 3 Long Term Strategic Issues for Exporters to Consider Recently a number of new regulations were introduced, which are aim ed at protecting topical anaesthetic producers of horticultural, agricultural and dairy products.Political issues and corruption are still a major issue in doing business in Indonesia. All imported food and beverage products must be registered by Indonesias National Agency for Food and Drugs Control (BPOM). New Zealand food and beverage exporters are advised to check with their Indonesian imposters or partners what the study process is. The specified time limit for BPOM to issue registration is 45 on the job(p) days, but in the past it has taken 6-12 months. 12/ Exporter Guide Indonesia Food and Beverage February 2012 2. 4 Distribution ChannelsThe 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, restaurant and catering) markets. Importers will undertake the product registration on behalf of New Zealand companies. New Z ealand companies must provide the necessary documentation including a letter of appointment for the Indonesian importer. 2. 5 Pricing New Zealand products face loaded competition from other imported products, particularly products from Asian countries.With the right pricing and product positioning strategies, Indonesian consumers are free to pay for premium products. 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 2 MARKET RESOURCES AND CONTACTS ASSOCIATIONS /ORGANISATION ASEAN New Zealand have Business Council Halal Indonesia The Federation of Islamic Associations of New Zealand (FIANZ) WEBLINK www. asean. org. nz www. halalindonesia. org/ www. fianz. co. nz/index. php Indonesia National Agency of Drug and Food Control www. om. go. id ASEAN Australia New Zealand set-apart Trade Agreement Guide Ministry of wellness Republic of Indonesia Director ate General of Customs & Excise TRADE EVENTS InterFood Indonesia Fish and Seafood Indonesia Agri Indo Jakarta Fashion & Food Festival OTHER NZTE PUBLICATIONS Indonesia pastoral legal brief Wine Market in southeastward Asia Food and beverage in the hotel, restaurant and institutions market in Southeast Asia www. asean. fta. govt. nz www. depkes. go. id/en/ www. beacukai. go. id WEBLINK www. interfood-indonesia. com www. fisheryandseafoodexpo. com www. agri-indo. com www. jfff. info WEBLINK www. nzte. ovt. nz www. nzte. govt. nz /www. nzte. govt. nz Disclaimer This publication is provided to you as a free service and is intend to flag to you market opportunities and possibilities. Use of and belief on the information/products/technology/concepts discussed in this publication, and the suitability of these for your business is entirely at your own risk. You are advised to lift out your own independent estimate of this opportunity. The information in this publication is world wide it was prepared by New Zealand Trade and Enterprise (NZTE) from publicly available and/or subscription database sources.NZTE its officers, employees and agents accept no liability for any errors or omissions or any intuitive feeling/s expressed, and no responsibility is judge with respect to the standing of any faithful/s, company/ies or individual/s mentioned. New Zealand Trade and Enterprise is not responsible for any adverse consequences arising out of such use. You release New Zealand Trade and Enterprise from all claims arising from this publication. New Zealand Trade and Enterprise reserves the right to reuse any general market information contained in its reports. i ii iii iv v vi vii viii Euromonitor International, 26 August 2011.Indonesia Country Profile APNZ, 15 November 2011. Indonesia to join regional FTA. The New Zealand Herald. Retrieved from www. nzherald. co. nz Euromonitor International, 9 August 2011. Consumer Food Service in Indonesia. Euromonitor Interna tional, 2011. Market sizes, Indonesia Euromonitor International, February 2011. Alcoholic intoxications Indonesia Euromonitor International, November 2010. Packaged food Indonesia Business Monitor International, August 2011. Indonesia Food & Drink Report Q4 2011. Euromonitor International, April 2011. Packaging Indonesia 14/ Exporter Guide Indonesia Food and Beverage February 2012