Optimistic Outlook For Indonesia Food & Beverage Industry

Wednesday, February 1st, 2017 | 1474 Views

While the Industry Ministry of Indonesia has set the F&B industry’s growth target at 7.5-7.8 percent, players in the industry are optimistic that growth will exceed expectations.

Adhi Lukman, general chairman of the Indonesia Food and Beverage Association (Gapmmi), said that Gapmmi is one of them, and they predicts growth will be around 8.5 percent year-on-year in 2017—similar to what was seen in the preceding year.

There are several driving factors in the equation according to Gapmmi.

First, commodity prices are showing an upward trend. In certain regions, particularly in Sumatra and Kalimantan, these are boosting people’s purchasing power in regions that produce a significant amount of commodities.

Second, a proliferation of modern retailers (minimarkets) is being seen in the country. Selling mainly instant food and beverage products, these retailers have already conquered the bigger cities of the country and are now expanding into the smaller ones.

Indonesia already has a large population (255 million people as of 2016), and figures are increasingly rapidly day by day—experts predict the country will have 260 million in 2018. Per capita GDP for this fast growing population is estimated to rise.

Lastly, with the increasing number of trade agreements between the country and others, such as the ASEAN Economic Community that has turned the region into a single market, export opportunities for Indonesian food and beverage producers are in abundance.

Not only that, but the country’s F&B industry has already been known to be a lucrative sector for foreign direct investment. In fact, this totalled US$1.5 billion in full-year 2015, according to BKPM data. Professionals in the industry are therefore optimistic on the industry’s outlook for the year.