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Indonesia Food and Drink Report Q3 2011

Indonesia Food and Drink Report Q3 2011

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Price $530.00
Meta Description The near-term domestic demand outlook for Indonesia looks positive on the back of optimistic consumer confidence, continued
Publisher Business Monitor International
Date of Report Oct 6, 2011
Quick Overview
The near-term domestic demand outlook for Indonesia looks positive on the back of optimistic consumer confidence, continued tourist arrivals and strong retail sales growth. However, persistent inflation remains a major risk to our domestic demand outlook, as elevated consumer prices could potentially dampen consumer demand over the coming quarters. Longer term, strong macroeconomic fundamentals and favourable demographics mean that the Indonesian consumer sector has the potential to be regarded in the same light as the economies of Brazil, Russia, India and China.
Headline Industry Data
?? Food Consumption Growth For 2011 = +8.4%; Compound Annual Average Growth To 2015 = +9.1%
?? Alcoholic Drinks Sales Growth For 2011 =+9.6%; Compound Annual Average Growth To 2015 = +9.9%
?? Soft Drinks Sales Growth For 2011 = +11.5%; Compound Annual Average Growth To 2015 = +12.3%
?? Mass Grocery Retail Sales Growth For 2011 = +10.9%; Compound Annual Average Growth To 2015 = +11.3%
Key Company Trends
Massive Retail Potential Attracting the Sights of Global Retailers – Representing its latest bid to capitalise on the burgeoning potential in EMs, German wholesale giant Metro plans to set up stores in Indonesia by 2012. Despite the growing prevalence of modern retail in Indonesia, traditional retail will continue to account for a significant proportion of overall grocery retail sales over the medium term. The proprietors of these independent outlets represent the core customer base for Metro's cash and carry outlets, which suggests to us that there is massive growth potential for Metro to capitalise on.
Super Group and Petra Deepening Their Coffee Push – Petra Foods and instant beverage maker Super Group have established a US$1.5mn joint venture, Ceres Super, for the Indonesian market. The motivation behind the joint venture is largely owing to rising incomes in the country (which translates into a growing consumer base for coffee products) and the stable economy and political situation in the country, according to the CEO of Petra Foods John Chuang. The joint venture will offer 3-in-1 coffee mix products at more than 400,000 stores across Indonesia.
Key Risks To Outlook
Persistent food price inflation is the biggest risk to our domestic demand outlook for 2011. Although we expect food inflationary pressures to moderate over the latter half of 2011 (given that commodity markets remain fundamentally well-supplied), there is a risk that food prices could continue to remain at elevated levels, and in turn dampen domestic spending growth. Given that Indonesia is still a developing economy and that the food component makes up a large 36.2% of the consumer price basket, higher food prices will divert a significant chunk of incomes away from consumer goods. While the prospect of monetary tightening – our country risk team is pencilling in two more 25 basis point (bps) rate hikes by end-2011 – could adversely impact the consumer sector, inflation is realistically a far bigger demand risk and consequently the bank's steps to combat rising inflationary pressures should be demand supportive.
Table of Contents
BMI Industry View ........................................................................................................................................... 7
SWOT Analysis ................................................................................................................................................ 9
Indonesia Food Industry SWOT ............................................................................................................................................................................ 9
Indonesia Drink Industry SWOT ......................................................................................................................................................................... 10
Indonesia Mass Grocery Retail Industry SWOT ................................................................................................................................................. 11
Business Environment ................................................................................................................................. 12
BMI’s Core Global Industry Views .......................................................................................................................................................................... 12
Table: BMI Food & Drink Core Views ............................................................................................................................................................... 17
Asia Pacific Risk/Reward Ratings ............................................................................................................................................................................ 18
Table: Asia Pacific Food & Drink Risk/Reward Ratings -Q3 2011 ..................................................................................................................... 22
Indonesia’s Risk/Reward Rating ......................................................................................................................................................................... 23
Macroeconomic Outlook .......................................................................................................................................................................................... 24
Table: Indonesia - Economic Activity ................................................................................................................................................................. 27
Industry Forecast Scenario ........................................................................................................................... 28
Consumer Outlook ................................................................................................................................................................................................... 28
Food......................................................................................................................................................................................................................... 32
Food Consumption .............................................................................................................................................................................................. 32
Table: Food Consumption Indicators - Historical Data & Forecasts .................................................................................................................. 33
Canned Food ...................................................................................................................................................................................................... 33
Table: Value/Volume Sales, selected food sub-sectors - Historical Data & Forecasts ........................................................................................ 34
Confectionery...................................................................................................................................................................................................... 34
Table: Value/Volume Sales, selected food sub-sectors - Historical Data & Forecasts ........................................................................................ 36
Trade ....................................................................................................................................................................................................................... 36
Table: Indonesia Food & Drink Trade Indicators - Historical Data & Forecasts ............................................................................................... 37
Drink ........................................................................................................................................................................................................................ 38
Hot Drinks .......................................................................................................................................................................................................... 38
Table: Indonesia Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts ........................................................................................ 39
Alcoholic Drinks ................................................................................................................................................................................................. 39
Table: Indonesia Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts ........................................................................................ 40
Soft Drinks .......................................................................................................................................................................................................... 41
Table: Indonesia Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts ........................................................................................ 42
Mass Grocery Retail ................................................................................................................................................................................................ 43
Table: Indonesia Mass Grocery Retail Sales by Format ..................................................................................................................................... 46
Table: Grocery Retail Sales by Format (%) - Historical Data & Forecasts ........................................................................................................ 46
Food ................................................................................................................................................................ 47
Key Industry Trends And Developments .................................................................................................................................................................. 47
Regional Players Munching Deeper Into Indonesia’s Food Sector ..................................................................................................................... 47
Agricultural Production Activity To Liven Up .................................................................................................................................................... 48
Inflationary Pressures To Weigh On Food Producers’ Margins......................................................................................................................... 49
Market Overview ..................................................................................................................................................................................................... 49
Food Production ................................................................................................................................................................................................. 49
Confectionery...................................................................................................................................................................................................... 49
Halal ................................................................................................................................................................................................................... 50
Agriculture .......................................................................................................................................................................................................... 50
Organics ............................................................................................................................................................................................................. 51
Fisheries ............................................................................................................................................................................................................. 51
Drink ............................................................................................................................................................... 53
Key Industry Trends And Developments .................................................................................................................................................................. 53
Challenging Year Ahead For Coca-Cola Amatil ................................................................................................................................................ 53
Super Group and Petra Deepening Their Push Into The Coffee Sector ............................................................................................................... 54
Market Overview ..................................................................................................................................................................................................... 54
Soft Drinks .......................................................................................................................................................................................................... 54
Alcoholic Drinks ................................................................................................................................................................................................. 55
Hot Drinks .......................................................................................................................................................................................................... 55
Mass Grocery Retail ...................................................................................................................................... 56
Key Industry Trends And Developments .................................................................................................................................................................. 56
Massive Retail Potential Attracting The Sights Of Global Retailers .................................................................................................................... 56
Traditional Retailers Facing Greater Pressure On Market Share ....................................................................................................................... 57
Market Overview ..................................................................................................................................................................................................... 58
Table: Structure of Indonesia's Mass Grocery Retail Sector - Estimated Number of Outlets by Format ............................................................. 62
Table: Structure of Indonesia's Mass Grocery Retail Sector - Sales by Format (IDRbn) .................................................................................... 62
Table: Structure of Indonesia's Mass Grocery Retail Sector - Sales by Format (US$mn) ................................................................................... 62
Table: Average Annual Sales by Format - 2010 ................................................................................................................................................. 62
Competitive Landscape ................................................................................................................................ 63
Consumer Share Price Analysis ............................................................................................................................................................................... 63
Table: Key Players in Indonesia's Food Sector .................................................................................................................................................. 67
Table: Key Players in Indonesia's Drink Sector.................................................................................................................................................. 67
Table: Key Players in Indonesia's Mass Grocery Retail Sector, 2011 ................................................................................................................. 68
Company Analysis.................................................................................................................................................................................................... 69
Food ................................................................................................................................................................................................................... 69
Indofood Sukses Makmur Terbuka ...................................................................................................................................................................... 69
PT Charoen Pokphand Indonesia Tbk ................................................................................................................................................................ 71
Nestlé Indonesia.................................................................................................................................................................................................. 73
Mayora Indah Tbk .............................................................................................................................................................................................. 76
PT Unilever Indonesia Tbk ................................................................................................................................................................................. 78
Drink ................................................................................................................................................................................................................... 81
Coca-Cola Amatil (CCA) .................................................................................................................................................................................... 81
Strong 2010, Tough 2011 Ahead ......................................................................................................................................................................... 82
Aqua Golden Mississippi (Aqua) ........................................................................................................................................................................ 84
Mass Grocery Retail ........................................................................................................................................................................................... 87
Matahari Putra Prima ........................................................................................................................................................................................ 87
Carrefour ............................................................................................................................................................................................................ 90
Hero Supermarket Tbk ........................................................................................................................................................................................ 92
BMI Methodology .......................................................................................................................................... 95
Food & Drink Business Environment Ratings ......................................................................................................................................................... 95
Table: Rewards ................................................................................................................................................................................................... 96
Table: Risks ........................................................................................................................................................................................................ 97
Weighting ................................................................................................................................................................................................................. 97
Table: Weighting ................................................................................................................................................................................................ 98
How We Generate Our Industry Forecasts .............................................................................................................................................................. 99
Sourcing .............................................................................................................................................................................................................100
BMI Food & Drink Industry Glossary ....................................................................................................................................................................101
Food & Drink ....................................................................................................................................................................................................101
Mass Grocery Retail ..........................................................................................................................................................................................101




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