Retail Food Sector Jakarta Indonesia 1-7-2010
Retail Food Sector Jakarta Indonesia 1-7-2010
Retail Food Sector Jakarta Indonesia 1-7-2010
Date: 1/7/2010
GAIN Report Number: ID1001
Indonesia
Approved By:
Dennis Voboril
Prepared By:
Fahwani Y. Rangkuti and Jonn Slette
Report Highlights:
Post anticipates that the food retail industry in Indonesia will continue to grow and cater to Indonesia‟s
population of 229 million people. Traditional markets, wet markets and independent grocery stores are
gradually being replaced by modern outlets. The burgeoning supermarket and hypermarket sectors are
opportunities for U.S. food products as these products become more familiar to a wider Indonesian
consumer base. U.S. apples, table grapes, dairy products, potato products, and almonds continue to
enjoy a prominent position in Indonesia's retail outlets. Further growth and changes in consumer
preferences, along with improved refrigeration and storage facilities, will also create additional
opportunities for U.S. exporters.
Post:
Jakarta
Executive Summary:
ECONOMIC TRENDS AND OUTLOOK
Indonesia experienced peaceful direct president elections in 2004 and 2009. This political stability
significantly stabilized Indonesia‟s macro-economy and business climate. This stability helped to
protect Indonesia‟s economy during the recent global economic downturn. Economic growth in 2009
is expected to be around 4 percent. In 2010 economic growth is forecasted to be approximately 5
percent. Indonesia‟s large consumer base is also demonstrating a strong preference to shop in more
comfortable shopping environments, which has led to an ever expanding number of malls in major
cities throughout Indonesia. Post believes that prospects for the continued expansion of the retail
sector throughout Indonesia remain promising. However, a number of persistent market access issues
continue to threaten U.S. food industry exports.
The enforcement of the existing, as well as new regulations on food products often lacks transparency
and consistency. The lack of infrastructure, including, but not limited to poor port facilities, supply
chain management, and cold chain facilities also create a drag on the wider distribution of food
products throughout Indonesia. Another major concern for the food retail sector is the product
registration (ML) number issue. Currently, all imported, packaged food for retail purpose must receive
an ML number.
I. MARKET SUMMARY
The Indonesian retail sector began its rapid expansion in 1999, when a Presidential Decree allowed
Carrefour, a French retailer, to increase its outlet numbers in Jakarta. As other foreign and local
retailers followed, the Indonesian retail sector grew and consumers benefited from stronger competition
between retailers. Modern retail businesses such as hypermarkets, supermarkets, and mini-markets are
replacing more traditional retail outlets, including wet markets and independent small grocers. Growth
of these retailers includes foreign retail giants such as Carrefour, Giant, Lotte (formerly Makro), and
Lion Superindo. Presidential Decree No 111/2007 stated that only supermarkets under 1,200 square
meters and mini-markets under 400 square meters should be owned by domestic investor.
The development of information technology and changing life styles impacts consumers‟ perception of
the value and quality of food products, as well as the way they purchase daily necessities. National
modern retail chains generally start in Jakarta, then spread to other Javanese cities, and finally become
established in other areas outside of Java. Foreign and national chains compete directly with existing
regional modern outlets in these areas.
Specialty stores serving expatriates from the West, Korea, Japan, as well as domestic high-end
consumers in major urban areas, have been negatively impacted because of the ML issue.
I. MARKET SUMMARY
The Indonesian retail sector began its rapid expansion in 1999, when a Presidential Decree allowed
Carrefour, a French retailer, to increase it‟s outlet numbers in Jakarta. As other foreign and local
retailers followed, the Indonesian retail sector grew and consumers benefited from stronger competition
between retailers. Modern retail businesses such as hypermarkets, supermarkets, and mini-markets are
replacing more traditional retail outlets, including wet markets and independent small grocers. Growth
of these retailers includes foreign retail giants such as Carrefour, Giant, Lotte (formerly Makro), and
Lion Superindo. Presidential Decree No 111/2007 stated that only supermarkets under 1,200 square
meters and mini-markets under 400 square meters should be owned by domestic investor.
The development of information technology and changing life styles impacts consumers‟ perception of
the value and quality of food products, as well as the way they purchase daily necessities. National
modern retail chains generally start in Jakarta, then spread to other Javanese cities, and finally become
established in other areas outside of Java. Foreign and national chains compete directly with existing
regional modern outlets in these areas.
Specialty stores serving expatriates from the West, Korea, Japan, as well as domestic high-end
consumers in major urban areas, have been negatively impacted because of the ML issue.
Modern retail supermarkets and hypermarkets offer a wide range of food and beverage products and
are generally located as anchor stores in shopping centers. An increasing number of Indonesians are
shopping at these stores, particularly middle and upper income consumers. In general, grocery products
contribute to about 65 percent of these retail sales. These retail stores usually contain in-store bakeries,
cafés and restaurants, and prepared meals.
Modern retailers are concentrating on improving their marketing of quality fresh produce, a substantial
portion of which is imported, as is exemplified by the emergence of a number of fruit boutiques. There
are around 110 fruit boutiques in Jakarta, Cilegon, Tangerang, Depok, Bekasi, Tasikmalaya, Cirebon,
Bandung, Semarang, Yogjakarta, Surabaya, Malang, Probolinggo, Denpasar, Makassar, Palembang,
and Medan. These stores also sell other imported grocery products. In addition, mini-markets,
convenience stores, and other shops carry a range of convenience food items and fresh fruits. These
stores are found throughout Indonesia‟s major urban centers and are also sometimes co-located with
petrol stations. Franchising is also driving the rapid growth of mini-markets and convenient stores.
Source: Euromonitor
In 2008, the average per capita monthly expenditure in Indonesia in 2008 was about 39.60 dollars and
50.17 percent of it goes for food. A typical break down of these expenditures is as follows:
11.44 percent for processed food and beverages,
9.57 percent for cereals,
6.30 percent for fruits and vegetables,
3.96 percent for fish and
3.12 percent for milk & eggs
15.79 percent for other, such as meat & legume, fats and oils
Despite the growth in the modern retail sector, the majority of Indonesians continue to shop at
traditional stores conveniently located near their homes or places of work. These stores sell
conventional food and beverage products familiar to the majority of consumers.
Halal Products
Indonesian halal concerns continue to challenge U.S. food exporters. According to Indonesian
regulations, halal products shall be foods, beverages, drugs, cosmetics, biochemistry products,
genetically modified products composed of halal elements to be consumed, drank, used, or worn that
have undertake process of halal products in accordance with Islamic Law.
Recently, the Indonesian Congress, or Dewan Perwakilan Rakyat (DPR), began to debate a Guarantee
on Halal Products Law. Currently Post is unsure when the DPR will pass any definitive laws
pertaining to the Guarantee on Halal Products Law, but Post expects that a law is forthcoming. Post
also believes that this law will mandate that any halal product must be consumed, used, or worn in
accordance with Islamic Law. These products must have a recognized halal certificate and be labeled
with the recognized halal symbol.
Market Overview
Growth in the number of large modern retail stores is expected to continue, particularly hypermarkets
and mini-markets. This growth is being driven mostly by strong shopping preferences. There is ample
opportunity for retail store expansion to serve more consumers in Indonesia. In one survey, consumers
said they choose a store based on its product pricing and value (13 percent), store accessibility (10
percent), store format and wide selection (10 percent), efficiency and loyalty (9 percent), and products
quality (8 percent).
Foreign retailers drive retail sector growth and the competition between retailers is fierce. Many large
retailers are strategically located in the heart of Indonesia‟s major urban areas and compete directly
with smaller retailers. As a result smaller retailers and suppliers have complained to the Indonesian
government requesting zoning and trading regulations as well as the protection for small and medium
enterprises.
Imported items continue to face burdensome registration requirements, making business difficult. This
is particularly true for specialty stores carrying a high percentage of imported food products or stores
that want to test the market for new products. Since September 2008, the National Agency for Drug &
Food Control (BPOM) has enforced the ML number regulation for all imported package food for retail
purpose. All non-ML products displayed in supermarket shelves and storages are subject to being
confiscated. Furthermore, non-transparent and unpredictable customs clearance procedures, besides
being costly and administratively cumbersome, create problems when products with limited shelf-life
are unexpectedly held at port.
Indonesian consumers tend to follow one of two purchasing habits. The average Indonesian spends 50
percent of his or her income on food. These consumers tend to:
Shop frequently for food and buy smaller quantities per shopping trip.
Buy smaller package sizes and place price over packaging quality and appearance.
Buy local rather than imported products when satisfactory local substitutes are available.
Commonly buy cooked food at street-side stalls but cook at home is mostly preferred.
Consume more fresh food items then packaged and processed food.
Increasingly make decisions based on health and nutrition concerns, prompting processors to
provide more fortified food products.
Increasingly prefer for shopping at supermarket and modern outlets rather than at traditional wet
markets due to more comfortable shopping space, more complete range of goods, correct
weight, guaranteed quality, food safety and cleanliness, competitive price, good service, and
easier accessibility.
Make decisions based on advertising.
Expatriate and high-income Indonesian consumers are not as price sensitive and often look for branded,
gourmet, and imported items. Organic products are starting to become more popular. Younger
consumers from middle and upper income families are also looking for more variety and are less cost
conscious.
In response to evolving consumer preferences, distributors and retailers have altered marketing
practices. Packaging sizes have been reduced in order to lower prices, and more generic brands,
especially for staple foods such as rice, sugar, and cooking oil, have been introduced. Addition,
promotional campaigns are becoming more aggressive, with store fliers, seasonal discounts, in-store
activities, and advertising more prevalent.
Future Trends
Post expects the patterns of consumer behavior described above are expected to continue. While many
consumers are adjusting to paying higher prices for imported and local food products, they remain
selective in their product purchases and look for good quality products at low prices. As a result,
marketing campaigns for imported products are particularly important, as consumers consider foreign
brands to replace more familiar domestic brands. Product value will remain important to consumers,
but they will also be looking for greater variety in retailers' assortments.
As incomes grow, opportunities for branded products will continue to strengthen. Interest in the
nutritional characteristics of food will also continue to grow. Food safety awareness and consideration
will also increase.
Offering additional in-store services will continue to become common. These services include
acceptance of credit and debit cards, ATM services, floral departments, laundry services, food courts,
bakeries, home delivery services, and cooking services. Money-back or other guarantees, though rare
today, are also expected to become more common.
Ready to eat and ready to cook meals are becoming very popular because of the ease of preparation,
especially for expatriates living in apartments, middle to upper income consumers, and working
mothers.
If Indonesia maintains current food import regulations and enforcement procedures, post expects more
local food products in the retails market. Additionally, if the status quo is maintained, there is not
likely to be any significant increases in the production of premium products for the upper end of the
market segment, particularly in the short term. The quality, nature, and variety of most locally-
produced food products are not comparable to those of the U.S. and other imported products. Local
production is largely limited to more Asian types of foods; with utilize different ingredients and
production processes.
Entry Strategy
The best way to enter the Indonesian market is to appoint an agent. In general, the initial volume of
imported product sales is small. An agent is needed to assure the widest distribution for products as
well as to undertake the marketing efforts necessary to create awareness for products among
consumers.
In some situations, it may make sense to sell product directly to supermarkets or to appoint them as the
exclusive distributors. This is particularly recommended for gourmet products, as upscale products are
not likely to generate sufficient volume to interest an agent bringing in container loads. Nevertheless,
initial sales efforts in Indonesia should include visits with potential agents as well as with key retailers
to gain an understanding of the market.
Labeling
Requirements for labeling of food products (primarily applicable to packaged food for retail sale) are
broad in scope. Changes resulting from the Food Act of 1996, and the Consumer protection Act of
1999 went into effect in 2000. The newly introduced labeling regulations state that labels must be
written in the Indonesian language and note GMO derived ingredients.
All imported processed food products must be registered with BPOM before clearance through
Customs. The process for registration of food is complex, often non-transparent, costly, and time
consuming due to the detailed requirements regarding supporting documentation that should be carried
out before shipping. New regulations require the importers to apply for an import permit on animal
based food products, including processed products, from the Director General of Livestock Service,
Ministry of Agriculture. This permit must be obtained before an exporter can get an ML or registration
number.
Although import duties applied on most of food and agricultural products are 5 percent or less, most
imported products are also assessed a value added tax of 10 percent. The Indonesian sales tax is 2.5
percent. Alcoholic beverages are subject to luxury tax that varies between 40-75 percent according to
the product category.
Distribution System
Due to the widespread and diverse nature of Indonesia, the distribution system is complex. Indonesian
infrastructure is inadequate, especially outside big cities and the island Java. The ability to move
frozen and refrigerated products is limited. There are several national distributors, generally
subsidiaries of consumer goods and food manufacturers, who serve the whole country and numerous
agents and distributors with a more local reach. There are hundreds of wholesalers and millions of
retailers.
Inadequate port facilities are often cited as the single largest constraint in the distribution
system. Shallow draft that allows only small ships, inadequate loading and unloading facilities, and
frequent congestion are some of the problems associated with the ports. Also cited by distribution
firms are unreliable shipping schedules and an inadequate number of small ships serving Eastern
Indonesia, particularly during bad weather periods. This can result in shortages and lead firms to
maintain higher inventories than they desire.
Imported products often move to a distributor or agent, who in turn, sells directly to
modern retail outlets. Delivery of the products may be direct to stores or to the warehousing facilities
of the retailer. Only a few retailers buy directly from foreign suppliers and assume responsibility for
logistics.
Most imported products are sold to the modern retail stores, including hypermarkets, supermarkets,
wholesalers, convenience stores, and mini-markets. Products that move to the traditional sector face a
more extensive distribution process. There are about 10 major cities that serve as distribution hubs in
Indonesia including: Bandung, Yogyakarta, Surabaya, Denpasar, Makassar, Manado, Balikpapan,
Banjarmasin, Medan, Pakanbaru, Padang, Palembang, Batam. Generally, products move to
warehousing facilities of distributors in these hubs, then to sub-distributors and wholesalers for
delivery to retailers.
The modern retail sector is expanding rapidly, but the traditional sector is expected to continue to
dominate the distribution system for the foreseeable future. Distribution channels will shorten. Large
retailers will increasingly import produce and other products directly from foreign exporters, or will be
supplied directly by local manufacturers and fresh produce suppliers or growers. The products are
placed in central warehousing and distribution systems in major urban areas utilizing modern
technology and equipment. They will open more outlets in cities on Java outside of Jakarta to make
these systems efficient. Adequate infrastructure is a major problem on the other islands.
The success of large retailers, wholesalers, and hypermarkets in offering Indonesian consumers a wide
variety of products at lower prices will stimulate growth of imported food sales. More middle and low-
income consumers are beginning to shop in these outlets. Increasing competition will force existing
supermarkets and other modern retailers to focus on targeted consumer groups, to become more
sophisticated in their marketing efforts, and to improve efficiency of store operation. The number of
mini-markets and other small stores is also predicted to grow. The greatest expansion is anticipated on
the islands of Java and Bali, in residential areas and cities outside of Jakarta.
A. Supermarkets, Hypermarkets, and Warehouse Outlets
There are five players in the hypermarket group and three of them dominate the market. In 2008,
Carrefour had 48.7 percent of hypermarket sales, followed by Hypermart with 22.1 percent and Giant
with 17.8 percent. In addition, there are six supermarkets in the supermarket group that have 76
percent of supermarket sales. They include Hero (plus compact Giant) with 14.61 percent, Carrefour
Express with 13.95 percent, Lion Superindo with 13.35 percent, Foodmart with 12.19 percent,
Yogya+Griya Supermarket (Yogya group) with 11.62 percent, and Ramayana with 10.61 percent sales.
This segment is the most likely to purchase imported products. Imports can account for anywhere
between 5 and 30 percent of the food items sold, increasing to 60 percent for specialty retailers catering
to higher end consumers. In the near future, smaller quantities of imported products are expected to be
featured, but with a greater variety of brands and items.
Table5. Major Hypermarket, Supermarket, warehouse outlets (Foreign and National Chain)
Retail Ownership Sales/year No. of Locations (city/region) Purchasing
Name & 2008 outlets in Agent
Market 2008/2009 Type
Type
Carrefour France N/A 63 Jakarta, Depok, Bogor, Direct, Agent,
hypermarket Tangerang, Bekasi, Importer
format and 20 Cikarang, Bandung, Cirebon,
Carrefour Pekalongan, Semarang,
Express Yogyakarta, Solo, Madiun,
(supermarket Surabaya, Malang, Jember,
format) Denpasar, Makassar, Bandar
lampung, Palembang, Medan
Giant Local & N/A 35 Jakarta, Tangerang, Serang, Direct, Agent,
Dairy Farm- hypermarket Banten, Depok, Bogor, Importer
Hongkong format and 63 Bekasi, Kerawang,
supermarket Purwakarta, Cimahi,
format Bandung, Sukabumi,
Pekalongan, Yogyakarta,
Surabaya, Malang, Sidoarjo,
Probolinggo, Pasuruan,
Banyuwangi, Bali, Bandar
Lampung, Bengkulu,
Pakanbaru
Hypermart Local Rp. 11,977 47 Jakarta, Cilegon, tangerang, Agent,
billion for all Depok, Bogor, Bekasi, Importer
PT Matahari Cianjur, Bandung,
Prima Putra Pekalongan, Semarang, Solo,
Tbk businesses Madiun, Surabaya, Malang,
include Kuta (Bali), Batam,
Hypermart, Makassar, Manado,
Food Mart, Balikpapan, Banjarmasin,
Boston HBCs Pontianak, Bandar
(Rp. 5.7 Lampung, Palembang,
billion) Jambi, Pakanbaru, Medan,
Binjei (North Sumatera)
Indogrosir Local N/A 3 Jakarta, Yogyakarta, Agent,
Surabaya Importer
Lotte South Korea N/A 19 Jakarta, Tangerang, Bekasi,
Mart/former Bandung, Semarang,
Makro Yogyakarta, Solo, Sidoarjo,
Medan, Pakanbaru,
Palembang, Bali, Makassar,
Banjarmasin, Balikpapan
Alfa Midi Local N/A 102 Jakarta, Bogor, Tangerang, Agent,
(bigger than Bekasi, Banten, Serang, Importer
mini market Kerawang, Surabaya,
but smaller Sidoarjo, Gresik
than
supermarket)
D‟Best (fomer Local N/A 6 Jakarta, Palembang, Agent,
Diamond Makassar, Batam, Importer
supermarket) Yogyakarta
Food mart Local Rp. 11,977 27 Jakarta, Cilegon, Bogor,
(formerly billion for all Kerawang, Cirebon,
Matahari PT Matahari Pekalongan, Kudus, Klaten,
Supermarket) Prima Putra Purwokerto, Magelang,
Tbk businesses Yogyakarta, Madiun,
include Malang, Jember, Denpasar,
Hypermart, Samarinda, Pontianak,
Food Mart, Bandar Lampung,
Boston HBCs Pakanbaru, Padang
(Rp. 5.7
billion)
Gelael Local N/A 12 Jakarta, Semarang, Kuta, Agent,
Makassar Gorontalo, Importer
Manado, Timika, Bandar
Lampung
Hero Local & N/A 41 Jakarta, Serang, Bekasi, Agent,
Dairy Farm Bandung, Yogyakarta, Importer
Hongkong Surabaya, Sidoarjo,
Malang, Denpasar, Lombok,
Timika, Makassar,
Balikpapan, Banjarmasin,
Samarinda
Lion Local- N/A 68 Jakarta, Tangerang, Cilegon, Agent,
Superindo Delhaize Depok, Cibinong, Bogor, Importer
Belgia Bekasi, Cikampek, Cimahi,
Bandung, Sukabumi,
Sumedang, Yogyakarta,
Surabaya, Palembang
Ramayana Local Rp.5,526 93 Jakarta, Cilegon, Serang, Agent,
billion for all Tangerang, Depok, Imporer
PT Ramayana Cibinong, Bogor, Bekasi,
Lestari Kerawang, Cikarang,
Sentosa Tbk Cianjur, Sukabumi,
business and Purwakarta, Cimahi,
Ramayana and Cirebon, Semarang, Salatiga,
Orange Kudus, Surabaya, Sidoarjo,
Supermarket Gresik, Malang,
contribute to Banyuwangi, Denpasar,
29.3% of total Kupang, Tarakan,
sales Banjarmasin, Makassar,
Palu, Balikpapan, Pontianak,
Bandar Lampung,
Palembang, Pangkal Pinang,
Jambi, Pakanbaru, Tanjung
Pinang, Batam, Padang,
Bukittinggi, Medan, Binjei,
Tebing Tinggi, Pematang
Siantar,
Mini-markets are rapidly growing in popularity. This is especially true in the cities outside of
Jakarta. Indonesian mini-markets are essentially upgraded traditional road side stalls that carry
essential staple goods, some frozen items, and fresh fruits. Low prices compared to the major retailers
are one of their selling points. Many mini-markets are conveniently located in housing developments
and residential areas. Most mini-markets chains have their own distribution facilities. Purchasing
from importers or distributors is centralized and items can be delivered to a central warehouse or
directly to stores. Imported fruits are available in some of these stores.
In 2008, Indomart and Alfamart were the major stakeholders in this group, with a combined total
market share of approximately 84 percent.
C. Traditional Sector
The traditional sector continues to dominate Indonesian food retailing. This sector includes small
stalls, some of which are in traditional markets. Distribution channels are long and complex. Little
imported product is carried by these outlets except for fresh fruit and beef offal. Common imported
fresh fruit products that found in this market are apples, mandarins, oranges, table grapes and
pears. Since a ban on U.S. beef was implemented in 2005, offal is sourced almost exclusively from
Australia.
III. COMPETITION
Local companies with a strong position in the food and beverage market
The local industry dominates the markets for baked goods, noodles, and other wheat-based products,
snacks, frozen poultry products, processed dairy products, canned fish, soft drinks, and bottled and
packaged teas, tropical fruits and vegetables, and fresh sea food.
While businesses featuring fresh produce compete on their ability to supply competitively priced
locally grown products, businesses featuring processed food and beverages compete based on brand
name. There are several multinational companies in this sector, including Unilever, Nestle, Kraft,
Danone, Heinz, Frito Lay, and Effem.
Temperate fresh fruit, fruit juice, beef, french fries, confectionary, tree nuts, cheese, and pet foods are
mostly imported. Primary competing suppliers include Australia, New Zealand, Netherlands, South
Africa, Canada, Brazil, China, Japan, Korea, Taiwan, Pakistan, Thailand, Malaysia, and Singapore.
Thailand: longan,
durian
Canada: frozen
processed vegetables
(includes French
fries)
Many U.S. food items have strong sales potential in Indonesia. This is especially true of those for
which no local substitutes are available. The best opportunities for imported products exist in modern
retail outlets in the major cities on Java such as Jakarta, Bandung, Surabaya, Balinese centers of
tourism, and Medan in Sumatera. Potential also exists where foreign companies employee high
numbers of expatriates, such as Balikpapan on Kalimantan, Lombok, Sumbawa in Nusa Tenggara
Barat, Pakanbaru on Sumatera, and Timika on West Papua.
In most large cities, there is at least one supermarket that caters to the expatriate community providing
products unfamiliar in use and taste to typical Indonesians, such as pickles, olives, and condiments. In
general, the biggest opportunities exist for good quality, middle or low price ranged items with brand
names well-known to expatriates. Because importers purchase in small quantities and transportation
costs can be high, products are expensive compared to what expatriates pay at home. However, since
2008, retail stocks of imported products have decreased considerably due to ML registration
problem. The Indonesian expatriate community is made of a broader range of ethnicities than in the
past, with more expatriates to coming to Indonesia from Asian countries.
For U.S. products already present in the Indonesian market, fresh fruit continues to have the best sales
prospects. U.S. cheese and processed fruit and vegetables products have also started to increase their
market share. Some of the best selling processed foods include frozen french fries, frozen and canned
vegetables, breakfast cereals, snack food, biscuits, crackers, popcorn, baby food, dressings, sauces and
seasonings, cooking and salad oils, fruit juice and beverages.
Best market prospects for imported U.S. food products and competing suppliers‟ presence, as identified
by the FAF/Jakarta based on Indonesian Central Bureau Statistics data are as follows:
Table10. Products Present in the Market That Have Good Sales Potential
Product 2008 2008 Import from 5 Yr. Import Key Constraints to Market
Category Import US ($mil) Avg Tariff Market Development Attractiveness for
($mil) Import Rates (%) USA
(Value)
Growth
(%)
Dairy 857 171 31.2 5 Competition from Demand for dairy
Products (mainly non fat Australia and New processors, food &
excl Cheese dry milk, lactose, Zealand beverage
whey, butter industries, and
milk, casein) bakeries are
increasing
Other 518 51 15.8 5 Competition from Food service and
consumer (mainly food Malaysia, China, food processors
oriented prep., canned Thailand, need more and
food food, Netherlands, consistent supply
products mayonnaise, Singapore, New of products due to
gelatin, starch, Zealand, South growth of these
pastry, salad Korea, France, sectors
dressing) Brazil, and Germany
Fresh Fruit 426 46 17.2 5 Competition from Health awareness
(mainly apples, Except China, Thailand, pushes the demand
grapes & orange) mandarin Australia, South for quality fresh
and mango Africa, and products
25% Argentina.
Red meats 150 0 31.2 5 Competition from High demand of
fresh, Australia, New prime beef for
chilled, Zealand, and high-end
frozen Canada. Recent restaurants and
regulation only offal for the lower
allowed certain US to mid-class food
establishments to service industry
export beef to
Indonesia
Processed 77 29 14.2 5 Competition from Increase
fruit & (mostly onion Except China, Canada, consumption of
Vegetables powder, French orange Thailand, and fruit juice due to
fries, potato juice and Singapore the increase of
flakes, sauces, pine apple health awareness
celery, garlic 15%
powder)
Fish & 58 5 34 5 Competition from High-end
Seafood (mostly crab, Malaysia, China, restaurants need
crab meat & Pakistan, Thailand, non-tropical
other seafood) Japan, Singapore and seafood products
local products
Cheese 46 5 13.4 5 Competition from Demand from food
(fresh cheese, Australia, New industry, HRI and
cheddar) Zealand, France, and bakeries are
Philippines increasing
Snack foods 42 0.5 -9.4 5 Competition from Retail industry
(mainly China, Malaysia, development
confectionary, Switzerland, pushes sales of
potato chips, Thailand, Singapore snack food
popcorn) and local products products
Pet foods 10 4 21.2 5 Competition from Demand exists for
(mostly dog & Thailand and niche market
cat food) Australia
Tree nuts 6 2.2 (mostly 34 5 Competition from Fast-growing
almonds) India, China and bakery industry
local products needs
B. Products Not Present in Substantial Quantities but which have Good Sales Potential
There are also good opportunities for sales of other American high value items. Many of these are not
yet in the market in significant quantities. These include refrigerated frozen foods such as frozen pizza,
frozen meats, delicatessen meats, organic foods, and specialty fruits, particularly certain types of
berries.
C. Products Not Present because They Face Significant Barriers
Prior to the ban on U.S. beef implemented in 2005, the most important U.S. sales item in the retail
sector were beef offal marketed in traditional outlets. However since 2008, more and more US meat
establishment are approved to export boneless meat to Indonesia although it has not reached the
exported volume prior to the ban.
Indonesian imports of U.S. chicken parts, which have high market potential in Indonesia, were banned
by the Indonesian government in 2000 due to questions regarding halal certification.
D. Recommendations
Generally, it is a good time to enter the Indonesian market, as the retail sector is growing rapidly. Post
believes that the current Indonesian consumer demands a greater variety of products and the market
conditions are good building brand awareness. However, it is important to have realistic expectations
about the size of the market, as well as some of the ongoing market access challenges. If exporters are
flexible and willing to make a long-term commitment to market development, Indonesia has huge
potential.
The Foreign Agricultural Service (FAS), U.S. Embassy Jakarta maintains up-to-date information
covering food and agricultural import opportunities in Indonesia and would be pleased to assist in
facilitating U.S. exports and entry to the Indonesian market. Questions or comments regarding this
report should be directed to FAS Jakarta at the following local or U.S. mailing address:
For more information on exporting U.S. agricultural products to Indonesia and other countries, please
visit the Foreign Agricultural Service‟s Home Page: http://www.fas.usda.gov
Food and Agricultural Import Regulation and Standard Annual Report (ID9022):
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20and%20Agricultural%20I
mport%20Regulations%20and%20Standards%20-%20Narrative_Jakarta_Indonesia_9-1-
2009.pdf
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg
200 9,82 10,09 10,25 10,02 10,06
5 9,149 9,235 9,518 9,682 9,467 9,649 6 7 0 0 7 9,850 9,734
200 9,12
6 9,369 9,280 9,117 8,826 9,212 9,353 4 9,119 9,205 9,110 9,165 9,020 9,158
200 9,18
7 9,090 9,160 9,118 9,083 8,828 9,054 6 9,410 9,137 9,379 9,376 9,419 9,187
200 9,11 10,99 12,15 10,95
8 9,304 9,051 9,199 9,234 9,318 9,225 8 9,153 9,378 5 1 0 9,756
200 11,33 11,97 11,57 10,71 10,34 10,22 9,92 10,06 10,35
9 0 5 5 3 0 5 0 0 9,681 9,545 9,480 9,400 4
Source: Central Bureau of Statistic (BPS-Badan Pusat Statistik) and Business Indonesia Daily Newspaper