The Indonesian food and beverages industry is largely benefited by the domestic market, due to which sales are estimated to surge 8.6% during January-June 2009.
According to Thomas Darmawan, the Chairman of the Indonesian Food and Beverages Producers, domestic market is helping the food and beverage industry to resist the downward trend in sales, and the sales are projected to increase by 8.6% during the first six months of 2009, reaching Rp 238.9 Trillion ($23 Billion), as reported by Jakartaglobe.
Exports of processed food, including frozen fish, shrimps and canned food, declined 50% to $252.6 Million during Q1 2009 as compared to $505.2 Million recorded in Q1 2008. This is a relatively smaller amount than the domestic sales that are projected to hit $22.9 Billion during the first six months of the current year.
It is clear that while the country’s exports have considerably suffered, the domestic market in Indonesia has remained intact. Thomas further adds that some of the exporters, especially in vulnerable industries, like fish and cocoa, have either suspended their operations or have closed down their businesses.
The success of the domestic industry in Indonesia is largely attributed to the strict control of the government on unlawful imports and a vigorous campaign to encourage people to buy local products. Demand, in particular, is high from hotels & restaurants and households.
Various factors, like the launch of new products and flavors, growing modern retail outlets, and rising health awareness among consumers, contributed significantly to the growth of Indonesian food processing industry.
Moreover, primary materials, including wheat flour, skimmed milk powder and frozen boned beef, are directly imported by food processor. On the other hand, complementary ingredients, like preservatives and flavorings, are commonly bought from local agents.
The food processing industry in Indonesia is projected to grow further and produce food products on a large scale to serve all the consumers having taste for the Asian food. There is an immense market potential for the imported food ingredients used for producing staple food as well as snacks.
According to a Research Analyst at RNCOS, “Despite the global recession, the food and beverage industry in Indonesia is predicted to grow robustly. High demand for food products will result into this projected growth. Although the producers of primary agricultural products may be suffering due to the economic slowdown, the outlook for secondary manufacturers seems very bright.”
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