BMI View: Since last quarter, our Asia Country Risk team has revised down our GDP growth forecasts to 5.0% for 2015, on the back of weak consumer demand and significant headwinds in the export sector (due to low commodities prices and weak external demand) and slower-than-anticipated government infrastructure spending in H115. We expect growth to accelerate over the coming quarters, driven by additional interest rate cuts, a more streamlined investment process and a pick-up in the pace of infrastructure investment. With food , drink and retail sector investments likely to be more forthcoming in the coming years, dynamism in consumer-facing sectors will remain buo yant and support demand growth. Indonesia remains one of the most exciting emerging market prospects, in our view.
Headline Industry Data
Food consumption (local currency) forecast growth in 2015 = +9.3%; compound annual growth rate (CAGR) forecast 2014 to 2019= +9.4%.
Alcoholic drinks value sales growth (local currency) in 2015 = +10.7%; CAGR forecast 2014 to 2019 = +10.9%.
Soft drinks value sales growth (local currency) in 2015 = +11.5%; CAGR forecast 2014 to 2019= +10.9%.
Mass grocery retail value sales growth in 2015 = +14.0%; CAGR forecast 2014 to 2019 = +13.1%.
Key Industry Trends
Government Expands Import Tariff Rise : In July 2015, the Indonesian government was planning to raise the import duty charged on several consumer goods, including food and drink items. The move will result in import tariffs increasing by up to 150%, depending on the category. The changes will see import duties on meat rise by 5-30% and on alcohol by up to 150%. Previously, the government increased the duty on imported luxury goods from 7.5% to 10%. According to the finance ministry, the change is aimed at boosting growth in the domestic consumer goods sector and will impact only 1% of total imports. The move is expected to generate an additional revenue of IDR800mn (USD60mn) for the government...
The Indonesia Food & Drink Report features BMI Research's market assessment and independent forecasts for food and drink expenditure, consumption, sales, and imports/exports and forecasts for the mass grocery retail sector. The report also includes analyses of major regulatory developments, the background macroeconomic outlook and competitive landscape comparing national and multinational companies by leading products and services, sales, investments, partners and expansion strategies.
BMI's Indonesia Food & Drink Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the food and drink industry and the mass grocery retail market in Indonesia.
- Benchmark BMI's independent food and drink industry forecasts for Indonesia to test other views - a key input for successful budgeting and strategic business planning in the Indonesian food and drink market.
- Target business opportunities and risks in Indonesia through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
- Exploit latest competitive intelligence on your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity) and Competitive Landscape Tables.
BMI Industry View
Summary of BMI’s key industry forecasts and views, covering food and drink manufacturing and consumption and the mass grocery retail market.
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the food, drink and mass grocery retail sectors and within the broader political, economic and business environment.
BMI’s Food and Drink Risk Reward Index
BMI’s Risk Reward Index provides investors (food and drink manufacturers and mass grocery retailers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic points. These provide indices of highest to lowest appeal to investors, with each position explained.
BMI’s food chapter is divided into sections such as meat, fish, confectionary, dairy and canned foods, and provides insight into each market’s food industry, centred on a forecast to end-2019 for the sector. The chapter includes the following elements:
- Industry Forecast Scenario: Historical data series and a forecast to end-2019 for growth of key indicators within a market’s food industry. Indicators include food consumption, food consumption as % of GDP, canned food sales, confectionery sales and food and drink imports and exports, among others.
- Industry Developments: A summary of corporate developments, including news on M&As, FDI, expansions, closures and financial results, in addition to analysis and explanation of the latest industry events and how these could influence further investment.
- Market Overview: An overview of the structure of the market, introducing the key players and discussing underlying trends.
Segmented the same way as BMI’s food chapter, the drink section provides insight into each market’s drink industry, centred on a forecast to end-2019 for the sector. Forecast indicators include alcoholic and soft drink sales by value, volume and sub-sector and tea and coffee sales, among others.
Mass Grocery Retail Forecasts
Segmented the same way as BMI’s food and drink chapters, the mass grocery retail section provides insight into each market’s grocery retail industry, centred on a forecast to end-2019 for the sector. Forecast indicators include mass grocery retail sales by format (including supermarkets, hypermarkets, convenience and discount stores) and a breakdown of the organised retail sector versus the traditional sector, among others.
Illustration of the mass grocery retail and food and drink industries via rankings tables comparing revenues, number of outlets and number of employees. This chapter also includes data-rich, in-depth regional analysis of the market position, business strategies and investment potential of the region’s leading mass grocery retail and food and drink operators.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Food & Drink reports draw on an extensive network primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.