handbook-indonesia-2018 en

The Food and Beverage Market Entry
Handbook: Indonesia
a Practical Guide to the Market in Indonesia for European Agrifood Products
Agriculture
and Rural
Development
October 2017
Prepared by:
EUROPEAN COMMISSION
Consumers, Health, Agriculture and Food Executive Agency
Promotion of Agricultural Products Unit
E-mail:
Chafea-agri-events@ec.europa.eu
Tastes of Europe Indonesia – Market Entry Handbook
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Tastes of Europe Indonesia – Market Entry Handbook
TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................. 4
TABLE OF FIGURES ............................................................................................... 7
LIST OF TABLES .................................................................................................... 8
I. THE FOOD AND BEVERAGE MARKET ENTRY HANDBOOK: INDONESIA ..................... 10
i. How to use this handbook ....................................................................... 10
1. INDONESIA FACT SHEET .................................................................................. 11
1.1 Key economic figures “at a glance” ........................................................ 16
1.2 Food and beverage trade statistics ......................................................... 17
1.3 General information on distribution and logistics infrastructure .................. 17
2. THE INDONESIAN FOOD AND BEVERAGE MARKET ............................................... 19
2.1 Market size and market share ............................................................... 19
EU-Indonesia bilateral trade ............................................................. 20
EU GIs in Indonesia ......................................................................... 21
Opportunities for Foreign-Supplied Products ....................................... 22
2.2 Growth drivers and trends .................................................................... 22
Rising incomes and growing consumer confidence ............................... 22
Young, growing Indonesian population ............................................... 23
Increased urbanization..................................................................... 23
Growing awareness of healthy lifestyle products ................................. 23
Expanding mass grocery retail sector ................................................. 23
Growth of tourism sector .................................................................. 24
General consumer tastes and preferences .......................................... 24
2.3 Market access and market entry ............................................................ 25
2.4 Transportation infrastructure ................................................................. 25
Infrastructure challenges.................................................................. 26
Distribution Channels and Intermediaries ........................................... 26
2.5 Key markets by geography ................................................................... 28
Mid-sized and large middleweight cities.............................................. 28
Small middleweight cities ................................................................. 29
Indonesia’s 2025 Vision for Major Cities ............................................. 29
2.6 Customs, SPS Requirements and Labelling .............................................. 29
Customs Procedures and Documentation ............................................ 29
Important stakeholders in export-import process in Indonesia: ............. 30
Import declaration forms.................................................................. 33
SPS Requirements in Indonesia ......................................................... 33
Standards ...................................................................................... 34
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Labelling ........................................................................................ 35
Packaging and Container Regulations................................................. 36
Halal labelling ................................................................................. 36
Organic labelling ............................................................................. 37
2.7 The Status of Geographical Indications (GIs) and Intellectual Property (IP)
Protection ................................................................................................ 37
Definitions of GIs in Indonesia .......................................................... 37
Protection ...................................................................................... 38
Enforcement ................................................................................... 38
Registration as a GI ......................................................................... 38
Application Cost .............................................................................. 40
Registration of foreign GIs in Indonesia.............................................. 40
Competent authorities for GI protection ............................................. 41
3. MARKET SNAPSHOTS FOR SELECTED PRODUCTS ................................................ 42
3.1.
Wine.............................................................................................. 44
Consumption .................................................................................. 44
Offer.............................................................................................. 45
Distribution .................................................................................... 50
3.2 Spirits ................................................................................................ 53
Consumption .................................................................................. 53
Offer.............................................................................................. 55
Distribution .................................................................................... 58
3.3 Beer ................................................................................................... 60
Consumption .................................................................................. 60
Offer.............................................................................................. 61
Distribution .................................................................................... 66
3.4 Fresh and Processed Meat ..................................................................... 68
Consumption .................................................................................. 68
Offer.............................................................................................. 70
Distribution .................................................................................... 76
3.5
Olive Oil ......................................................................................... 78
Consumption .................................................................................. 78
Offer.............................................................................................. 79
Distribution .................................................................................... 81
3.6 Fresh Fruits and Vegetables .................................................................. 82
Consumption .................................................................................. 82
Offer.............................................................................................. 85
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Tastes of Europe Indonesia – Market Entry Handbook
Distribution .................................................................................... 90
3.7 Processed Fruits and Vegetables ............................................................ 93
Consumption .................................................................................. 93
Offer.............................................................................................. 94
Distribution .................................................................................... 97
3.8 Dairy Products ..................................................................................... 98
Consumption .................................................................................. 98
Offer............................................................................................ 101
Distribution .................................................................................. 108
3.9 Processed Cereals .............................................................................. 110
Consumer trends........................................................................... 110
Offer............................................................................................ 113
Distribution .................................................................................. 116
3.10 Bread, Pastry, Cakes, Biscuits and other bakery products ..................... 117
Consumption ................................................................................ 117
Offer............................................................................................ 122
Distribution .................................................................................. 127
3.11 Chocolate and Derived Products and Confectionery .............................. 131
Consumption ................................................................................ 131
Offer............................................................................................ 134
Distribution .................................................................................. 140
3.12 Honey ............................................................................................ 142
Consumption ................................................................................ 142
Offer............................................................................................ 143
Distribution .................................................................................. 147
3.13 Gums Resins and Plant Extracts ......................................................... 150
Consumption ................................................................................ 150
Offer............................................................................................ 151
Distribution .................................................................................. 155
3.14 Cotton and Live Plants ...................................................................... 156
............................................................................................................. 156
Consumption ................................................................................ 156
Offer............................................................................................ 158
Distribution .................................................................................. 165
4. COMMUNICATION .......................................................................................... 166
4.1 How does the Consumer get Influenced: By whom and how? .................. 166
4.2 Example of current communication campaigns made by main investor ..... 170
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5. DOS AND DON’TS .......................................................................................... 172
DO ........................................................................................................ 172
DON’T .................................................................................................... 173
Key Facts and Considerations ......................................................... 173
6. SYNOPSIS .................................................................................................... 176
6.1 Strengths, Weaknesses, Opportunities and Threats Analysis ................... 176
6.2 Key Criteria for Success ...................................................................... 178
7. SUPPORT SERVICE DIRECTORY ...................................................................... 180
7.1 European Union Organizations ............................................................. 180
7.2 Directory of EU Member States’ Embassies ........................................... 182
7.3 Other organizations and service providers ............................................. 184
7.4 Calendar of trade events and exhibitions .............................................. 193
ANNEX I: GI PRODUCTS REGISTERED IN INDONESIA ............................................ 197
ANNEX II: DATABASE OF PROFESSIONAL BUYERS ................................................ 198
TABLE OF FIGURES
Figure 1: Indonesia’s Individual Household Consumer Expenditure (2014). Source:
Statistic Indonesia ............................................................................................... 20
Figure 2: EU Agri-Food Exports to Indonesia. Source: European Commission .............. 21
Figure 3: Masterplan for the Acceleration and Expansion of Indonesia's Economic
Development ...................................................................................................... 29
Figure 4: Guidelines for Foreign Enterprises on the Import of Overseas Shipments in
Indonesia ........................................................................................................... 31
Figure 5: GI Registration Procedure in Indonesia ..................................................... 40
Figure 6: EU Export of Wines and Vermouth to Indonesia (in value), 2011-2015 ......... 47
Figure 7: Indonesia's Wine Exports (in tonnes), 2011-2015 ...................................... 47
Figure 8: Indonesian Spirits Imports from the EU, 2010-2015. ................................. 55
Figure 9: Indonesia's Export of Spirits (in tonnes), 2011-2015. ................................. 56
Figure 10: Indonesia’s Beer Imports, 2011-2015..................................................... 63
Figure 11: Indonesia’s Beer exports (in tonnes), 2011-2015. .................................... 63
Figure 12: Indonesian Imports of Meat and Edible Meat Offal, 2010-2015. ................. 71
Figure 13: Indonesian Imports of Processed Meat, 2010-2015. ................................. 72
Figure 14 Indonesia's export of meat and edible meat offal in thousands of euros, 20112015. ................................................................................................................ 73
Figure 15: Indonesia's Olive Oil Imports, in tonnes (2011-2015) ............................... 80
Figure 16 Indonesia's Olive Oil Exports, in tonnes (2011-2015)................................. 80
Figure 19: Fruit consumption in Indonesia amongst the elderly (65 and above) .......... 84
Figure 20: Indonesia's Exports of Fresh Fruits (2011-2015) ...................................... 90
Figure 24: Imports of Preparations of Vegetables, Fruits and Nuts, 2011-2015 ........... 95
Figure 25: Exports of Preparations of Vegetables, Fruits and Nuts, 2011-2015. ........... 96
Figure 26 Percentage Share of Total Dairy Imports (in terms of quantity)................. 103
Figure 27 EU Exports of Dairy Products to Indonesia, 2011-2015 ............................ 104
Figure 28: Percentage Share of Total Dairy Exports (in terms of quantity), 2015 ....... 105
Figure 29 Indonesian Imports of Processed Cereal, 2011-2015 ............................... 114
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Tastes of Europe Indonesia – Market Entry Handbook
Figure 30 Indonesian Exports of Processed Cereals, 2011-2015 .............................. 114
Figure 31: ©Consumption and Expenditure on Baked Goods in Selected Markets. ..... 118
Figure 32: Sales Trends of Baked Goods by Selected Product Category in Indonesia .. 123
Figure 33 Leading Exporters to Indonesia of Bread, Pastry Cakes, Biscuits and Other
Bakers' Wares ................................................................................................... 124
Figure 34 Leading European exporters to Indonesia of Bread, Pastry, Cakes, Biscuits and
other Bakers’ Wares. ......................................................................................... 125
Figure 35: Indonesia's Exports of Baked Goods (2011-2015) .................................. 125
Figure 36: Composition of Indonesian Baked Goods Market by Producer Shares (percent)
....................................................................................................................... 126
Figure 37 Distribution Shares of Store-Based Retailers of Baked Goods in Indonesia. . 128
Figure 38 Comparing Import Costs in Indonesia with the East Asia & Pacific Region. .. 130
Figure 39: Indonesia's Imports of Chocolate and Confectionery by Quantity (2011- 2015)
....................................................................................................................... 135
Figure 40: Indonesia's Imports of Chocolate and Confectionery from the EU by Value,
2011-2015 ....................................................................................................... 135
Figure 41: Indonesia's Exports of Chocolate and Confectionery by Quantity (2011-2015)
....................................................................................................................... 136
Figure 42 Indonesia's Exports of Chocolate and Confectionery to the EU by Value, 20112015 ............................................................................................................... 137
Figure 43 Indonesia: Import Procedure Flow Chart ................................................ 144
Figure 44: Indonesia's Exports of Honey by Quantity (2011-2015) .......................... 145
Figure 45 Evolution of 20 Top EU Agri-Food Exports to Indonesia, 2011-2015 ........... 152
Figure 46: Indonesia's Imports of Gums Resins and Plant Extracts by Value (2011-2015)
....................................................................................................................... 153
Figure 47 Countries importing Indonesian-made Gum Resins (kg) ........................... 154
Figure 48: Indonesia's Exports of Gums Resins and Plant Extracts by Value (2011-2015)
....................................................................................................................... 154
Figure 49 Indonesian Imports of Cotton from the EU ............................................ 159
Figure 50 Imports of Live Plants from the EU to Indonesia ...................................... 161
Figure 51 Growth in Value of Indonesian Imports of Live plants from the EU (% p.a.) 161
Figure 52 Indonesian Exports of Cotton to the EU.................................................. 162
Figure 53 Indonesian Exports of Live Plants to the EU ............................................ 162
Figure 54 Growth in Value of Indonesian Exports of Live plants to the EU (% p.a.) .... 163
Figure 55 Indonesian Communication Channels..................................................... 168
LIST OF TABLES
Table 1 Key Economic Figures “at a glance”. Source: compiled from publicly available
statistics ............................................................................................................ 16
Table 2 Product Classification Table ....................................................................... 42
Table 3 S.W.O.T. Analysis .................................................................................. 178
Table 4 Key Criteria for Success .......................................................................... 179
Table 5 Directory of EU Member States’ Embassies ................................................ 184
Table 6 Chambers of Commerce and Other Associations......................................... 186
Table 7 Service Providers ................................................................................... 192
Table 8 Local Bodies and Associations .................................................................. 193
Table 9 Calendar of Trade Events and Exhibitions .................................................. 196
Table 10 EU GI Products Registered in Indonesia .................................................. 197
Table 11 Buyers ................................................................................................ 201
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Table
Table
Table
Table
12
13
14
15
High End Supermarkets ........................................................................
Convenience Stores ..............................................................................
Journalists ...........................................................................................
Bloggers .............................................................................................
203
205
206
207
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I. THE FOOD AND BEVERAGE MARKET ENTRY HANDBOOK: INDONESIA
This Handbook is intended to act as a reference for those agri-food producers planning for, or
in the process of entering, the Indonesian market. This Handbook provides step-by-step guides
on the operationalisation of the market in Indonesia, including relevant information such as
analysis of the Indonesian market for different product categories, market access and market
entry procedures, IP protection, referrals to professional buyers and a signposting and referral
system providing useful contacts and ways to penetrate the Indonesian market.
i. How to use this handbook
Depending on your stage of market entry, company profile, and product range, different
sections within this handbook will be helpful to a different extent for your business strategies.
For those wishing to learn more about the Indonesian food and beverage market in general
Section 2 provides an overview of the business climate. This section contains information on:
the food and beverage market, market access procedures, customs procedures, SPS and
labelling requirements, and the status of Geographical Indications and Intellectual Property
protection. The information contained within this section is of a general nature and so may not
be relevant for those in the more advanced stages of market entry. _2._The_Indonesian
If Section 2 got you interested in the market but you want to find out more information relevant
for your product, then check out the Market Snapshots for Selected Products. This content
illustrates the market situation, market access procedures, SPS requirements etc. specific for
this product or product category. This information will provide more industry specific
information to consider as part of any market entry or market expansion strategies.
_3._Market_Snapshots
If you already have decided that the Indonesian market is where you want to be, but you need
some support, then the Support Services Directory can point you in the right direction.
Contact information for a service provider, business facilitation support organisation, or from
a business contact, could help put you in touch with the right parties who can help you to build
your brand in the Indonesian market.
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Tastes of Europe Indonesia – Market Entry Handbook
1. INDONESIA FACT SHEET1
Indonesia
Official name
Republic of Indonesia
Political system
Capital
Flag
Unitary presidential constitutional republic
Jakarta
Official languages
Largest languages are Indonesian, Javanese, and Malay, in
addition to more than 700 spoken languages and dialects
USD 3.032 trillion (2016, 2.564 trillion EUR)
- USD 16,143 (2016, World Bank latest, 13,649 EUR)
GDP growth has remained positive in the last 10-year
reference period in Indonesia, with growing GDP per
capita indicative of increasing purchasing power
among Indonesia consumers
GDP, PPP
-
1
Per capita, PPP
Trend
Data from World Bank and WTO
11
14
GDP, PPP
12
3
GDP PPP, euro
GDP, per capita 10
2.5
8
2
6
1.5
4
1
2
2007
2008
2009
Currency
-
GDP per capita, euro
3.5
Thousands
Trillions
Tastes of Europe Indonesia – Market Entry Handbook
Exchange
trend
2010
2011
2012
2013
2014
2015
2016
Indonesian rupiah (IDR)
rate
-
There are approximately 16,000 IDR in 1 EUR.
Since early 2017, the IDR:EUR exchange rate has
been at a relative 10-year low, down from a peak
of 11,100 IDR to 1 EUR in 2010.
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Tastes of Europe Indonesia – Market Entry Handbook
Major cities
-
-
Metropolitan
population
(CIA,
2015)
Province
Jakarta (Capital)
-
8.5 million
Jakarta
Surabaya
-
2.4 million
East Java
Medan
-
1.8 million
North Sumatra
Bandung
-
1.7 million
West Java
Bekasi
-
1.5 million
West Java
Palembang
-
1.4 million
South Sumatra
Tangerang
-
1.4 million
Banten
Makassar
-
1.3 million
South Sulawesi
South Tangerang
-
1.3 million
Banten
Semarang
-
Land area
Population
-
Median age
Trend
-
Age by cohort:
1.3 million
Central Java
1,904,569 km2
261,115,456 (2016)
-
27.9 years
Indonesia has one of the largest populations in the
world,and maintains a positive growth rate.
However this rate has decreased in recent years
and registered a comparatively modest 1.1% in
2016.
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Tastes of Europe Indonesia – Market Entry Handbook
65 & older
Age cohort
55-64
25-64
Male
Female
15-24
0-14
80
60
40
20
0
20
40
60
Millions
Labour force (economic
participation of population
aged 10 and over, 2016)
-
Employment share
by sector
Unemployment
rate of population
aged 15 and over
125.1 million
-
Agriculture sector 32%; Manufacturing sector
21%; Services sector 47%
5.6%
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Tastes of Europe Indonesia – Market Entry Handbook
Provinces, Provincial Capitals and Population (2010 census)
Indonesia’s large population of more than 260 million inhabitants is distributed
across 34 provinces, ranging from high density urban adminstrative areas to
sparesely populated islands and rural regions.
Province
Capital
Population
Aceh
Banda Aceh
4.5 million
Bali
Denpasar
3.9 million
Babel
Pangkalpinang
1.2 million
Banten
Serang
10.6 million
Bengkulu
Bengkulu
1.7 million
Jateng
Semarang
32.4 million
Kalteng
Palangka Raya
2.2 million
Sulteng
Palu
2.6 million
Jatim
Surabaya
37.5 million
Kaltim
Samarinda
3.0 million
East Nusa Tenggara (NTT)
Kupang
4.7 million
Gorontalo
Gorontalo
1.0 million
Jakarta Special Capital Region
Central Jakarta
9.6 million
Jambi
Jambi
3.1 million
Lampung
Lampung
7.6 million
Maluku
Ambon
1.5 million
Kaltara
Tanjung Selor
622,350
Malut
Sofifi
1.0 million
Sulut
Manado
2.3 million
Sumut
Medan
12.9 million
Papua
Jayapura
2.8 million
Riau
Pekanbaru
5.5 million
Kepri
Tanjung Pingang
1.7 million
Sultra
Kendari
2.2 million
Kalsel
Banjarmasin
3.6 million
Sulsel
Makassar
8.0 million
Sumsel
Palembang
7.5 million
Jabar
Bandung
43.0 million
Kalbar
Pontianak
4.4 million
West Nusa Tenggara (NTB)
Mataram
4.5 million
Papuabarat
Manokwari
760,400
Sulbar
Mamuju
1.2 million
Sumbar
Padang
5.1 million
Special Region of Yogyakarta (DIY)
Yogyakarta
3.5 million
Author’s compilation
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Tastes of Europe Indonesia – Market Entry Handbook
1.1 Key economic figures “at a glance”
Indonesian market economy
GDP (billions of euros)
2011
2012
2013
2014
2015
2016
798.4
822
818
796.6
768.4
838.1
Real annual GDP
growth
5.0% in 2014
4.8% in 2015
4.9% in 2016
Forecast GDP growth
2016-2018
Indonesia is projected to grow at a rate of 6% in 2017 and 5.1% in
2018.
GDP by sector
In 2014, industry including energy accounted for 32.8% of the
total GDP; trade, repairs, transport and accommodation
accounted for 21.3%; the agriculture, forestry and fishing sector
accounted for 13.7%; the construction sector accounted for 10.1%;
public administration, defence, education, health and social
work accounted for 8.4%; finance and insurance accounted for
4.1%; the information and communication sector accounted for
3.6%; real estate accounted for 2.9% and professional, scientific
and support services accounted for 1.6%.
GDP per capita
(in euros)
2011
2012
2013
2014
2015
2016
3,298.0
3,348.3
3,286.7
3,158.1
3,006.7
3,237.5
Inflation
6.4% in 2014
6.4% in 2015
4.3% in 2016
Principal exports and
main destinations
(2015)
The top export products of Indonesia are coal briquettes, palm oil,
petroleum gas, crude petroleum and rubber.
The export of goods accounted for EUR 132.7 billion and the
export of services accounted for EUR 19.8 billion.
The main export destinations were Japan (12.0%), the United
States (10.8%) and China (10.0%), followed by Singapore and
India.
Principal imports
(2015)
The top import products are refined petroleum, crude petroleum,
petroleum gas, vehicle parts, broadcasting equipment and spelt,
common wheat and meslin.
The import of goods accounted for EUR 120.8 billion and the
import of services accounted for EUR 27.3 billion.
Indonesia mainly imported from China (20.6%), Singapore
(12.6%) and Japan (9.3%), followed by South-Korea and Malaysia.
Table 1 Key Economic Figures “at a glance”. Source: compiled from publicly available statistics
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Tastes of Europe Indonesia – Market Entry Handbook
1.2 Food and beverage trade statistics
According to statistics retrieved from the Global Cold Chain Alliance, expenditure on food
amounted to USD 179 billion (approx. EUR 152,5 billion 2 ) in 2015 and represented
approximately 36 percent of total consumer expenditure in Indonesia. The per capita spending
on food was recorded at USD 697 (EUR 594 billion). Forecasts reveal that expenditure on food
and beverages will progressively increase up to 2020. National statistics reveal that such
expenditure will increase from just over IDR 2 trillion (EUR 126 million) to approximately
IDR 4 trillion (EUR 252 million) in 2020.3
In 2015, the EU had a considerable trade deficit of EUR 3,411 million for its agri-food trade
with Indonesia. EU exports of agri-food products to Indonesia amounted to EUR 735 million,
while EU imports of agri-food products from Indonesia amounted to EUR 4,148 million. Over
the period 2005-2015, the annual rate of change for EU agri-exports to Indonesia was 9.4
percent compared to 10 percent in the case of EU agri-imports from Indonesia. The top five
EU agri-food export products in 2015 and their respective export shares were: milk powders
and whey (27 percent), wheat (9 percent), food preparations (8 percent), pet food (6 percent),
and raw tobacco (5 percent).4
It is important to note that the range of goods traded between Indonesia and the European Union
is largely complementary. Hence, the economies are considered an ideal “trading” fit.
1.3 General information on distribution and logistics infrastructure
As Indonesia is an archipelago with thousands of islands, freight and transportation can be both
complex and expensive. Transportation times and costs vary upon the mode of transportation
and goods, and it may require a combination of two or more means of transport to reach some
markets in Indonesia.
Indonesia’s distribution infrastructure is fragmented geographically, and mom-and-pop stores
predominate in many consumer categories. 5 Channels are evolving, however, and modern
retailing has made rapid inroads. Wholesale and hypermarket outlets procure from domestic
suppliers or directly from manufacturers and importers.6
There are many elements to the food distribution supply chain including importers, distributors,
retailers and food service operators. The appointment of a local partner or importer is essential.
A reputable importer will be able to supplement knowledge of the feasibility of market entry
in the first instance, but also help create a development plan for the product over time. Such
partners can help register a product, advise on marketing, organise logistics and liaise with the
most appropriate retail outlets. They have established networks with defined geographies and
reach.
Currencies in this Handbook are converted at official posted rates available at
www.ec.europe.eu/budget/contracts_grants/info_contracts/inforeuro/index_en.cfm.
3
U.S. Department of Commerce, “2016 Top Markets Report Cold Chain Country Case Study: Indonesia”
available at: http://trade.gov/topmarkets/pdf/Cold_Chain_Indonesia.pdf
4
European Commission, DG Agriculture and Rural Development, “European Union-Indonesia” available at:
http://ec.europa.eu/agriculture/trade-analysis/statistics/outside-eu/countries/agrifood-indonesia_en.pdf
5
©Indonesia Investments, “Infrastructure Development in Indonesia” available at: https://www.indonesiainvestments.com/business/risks/infrastructure/item381?.
6
U.S. Department of Agriculture, “Indonesia Retail Foods”, GAIN Report, December 2015, available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-182015.pdf
2
17
Tastes of Europe Indonesia – Market Entry Handbook
Distributors and agents usually sell directly to modern retailers, the food service industry and,
in case of ingredients, directly to manufacturers. Goods are shipped to warehousing facilities
or delivered directly to the store.
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Tastes of Europe Indonesia – Market Entry Handbook
2. THE INDONESIAN FOOD AND BEVERAGE MARKET
Boasting one of the largest populations in the world, the demand for primary goods in Indonesia,
which includes food and beverage products, is very high. Importantly, whilst local production
of food and beverages is robust, a large percentage of products still have to be imported to meet
local demand. As a result, EU producers stand to gain immensely as consumer demand
continues to rise.
Indonesia has great market potential for European exporters of branded and specialty food
products, as well as for suppliers of food ingredients and packaging. 7 Rising disposable
incomes levels have resulted in increased consumer spending for a wide range of products and
services, which is backed by the rapid growth of the middle class. European companies must
be proactive to take full advantage of these promising possibilities.
2.1 Market size and market share
Indonesia has a booming economy and the income levels are high. In 2016, GDP amounted to
USD 932 billion (EUR 781 billion), while real GDP growth amounted to 5.1 percent. 8
Indonesia is recognised as the largest economy in ASEAN and is one of the most dynamic
regions in the world. Indonesia’s GDP makes up 36 percent of total ASEAN GDP. 9
Additionally, Indonesia stands as the 16th largest economy in the world. Meanwhile, it is
important to recall that with a total population of 261 million, Indonesia is the fourth most
populous country in the world.10
Jakarta Skyline: large and crucial for market entry in Indonesia
The food and beverages industry is one of the industrial development priorities set by the
Indonesian government and it is still promising for both domestic manufacturers and importers.
The sector has proven to be very resilient during economic downturns, and for many
7
© EU-Indonesia Business Network, “Food and Beverage”, EIBN Sector Reports, 2014, available at:
https://www.flandersinvestmentandtrade.com/export/sites/trade/files/news/637150602213204/63715060221
3204_1.pdf
8
World Bank, Open data – Indonesia, available at https://data.worldbank.org/country/indonesia.
9
European Commission, Countries and regions – Indonesia, available at
http://ec.europa.eu/trade/policy/countries-and-regions/countries/indonesia/.
10
World Bank, Open data – Indonesia, available at https://data.worldbank.org/country/indonesia.
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Tastes of Europe Indonesia – Market Entry Handbook
multinational food companies, Indonesia is among their most important markets. Indonesia has
the fifth largest fresh food market in the world, at a total of 48.1 million tons in 2010.11
Nestlé Indonesia has the highest market share in the food and beverage market, leading in the
dairy and instant noodle categories, operating a joint venture with Indofood Sukses Makmur.12
Other players include Unilever Indonesia, Charoen Pokphand Indonesia and Mayora Inda. 13
The consuming class is made up of 55 million urban and 15 million rural Indonesians.14 Thet
are the most commercially attractive segment. It is anticipated that 5 million Indonesians will
enter the urban consuming market each year. Consumer expenditure in 2015 amounted to USD
493 billion (EUR 440 billion) and is expected to increase by 7.7 percent a year resulting in a
USD 1 trillion (EUR 893 billion) opportunity by 2030.15
Expenditure on food in Indonesia amounted to USD 179 billion (EUR 160 billion) and
represented approximately 36 percent of total consumer expenditure in 2015. In 2014, the
monthly average expenditure per capita for food was IDR 388,350 (USD 32.64). This averages
approximately 50 percent of total monthly expenditure per capita. A breakdown of average
expenditures in 2014 is adequately captured in the figure below.16
Figure 1: Indonesia’s Individual Household Consumer Expenditure (2014)17
EU-Indonesia bilateral trade
Trade between Indonesia and the EU reached EUR 25.3 billion in 2015.18 Not only is the EU
one of Indonesia's largest export markets, with a value of more than EUR 15.3 billion in 2015,
© EU-Indonesia Business Network, “Food and Beverage”, EIBN Sector Reports, 2014, available at:
https://www.flandersinvestmentandtrade.com/export/sites/trade/files/news/637150602213204/63715060221
3204_1.pdf.
12
Ibid.
13
Ibid.
14
World Bank Data, available at: https://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS.
15
© Source: Euromonitor International, “Indonesia Country Factfile”, 2015
16
U.S. Department of Agriculture, “Indonesia Retail Foods”, GAIN Report, December 2015, available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-182015.pdf.
17
Ibid
18 European Commission, Countries and regions – Indonesia, available at
http://ec.europa.eu/trade/policy/countries-and-regions/countries/indonesia/.
11
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Tastes of Europe Indonesia – Market Entry Handbook
but Indonesian exports to the EU increased by 6.2 percent from 2014. Furthermore, the EU is
Indonesia's largest trading partner with which it enjoys a large trade surplus (EUR 5.4 billion
in 2015).
Total EU exports to Indonesia increased by 13 percent in 2015 compared to 2010. In 2015, the
EU’s share in Indonesian imports was 7.9 percent. Overall, the EU was the 4th largest exporter
to the Indonesian market in that year. The main exporters to the Indonesian market in 2015 (in
terms of market share) are China (20.6 percent), Singapore (12.6 percent) and Japan (9.3
percent).19
In 2015, the EU had a considerable trade deficit of EUR 3.6 billion for its agri-food trade with
Indonesia. EU exports of agri-food products to Indonesia amounted to EUR 735 million, while
EU imports of agri-food products from Indonesia amounted to EUR 4.3 billion. Over the period
2005-2015, the annual rate of change for EU agri-exports to Indonesia was 9.4 percent
compared to 10 percent in the case of EU agri-imports from Indonesia.20 The top five EU agrifood products exported to Indonesia in 2015 and their respective export shares were:
1.
2.
3.
4.
5.
Milk powders and whey (27 percent);
Wheat (9 percent);
Food preparations (8 percent);
Pet food (6 percent); and
Raw tobacco (5 percent).
Figure 2: EU Agri-Food Exports to Indonesia. Source: European Commission
EU
GIs in Indonesia
Currently, there are only three European products that are registered as GIs in Indonesia.
However, this number is expected to increase as Indonesian intellectual property laws improve
19
© Trade Map, International Trade Center, available at: http://www.trademap.org/
European Commission, Agri-Food Trade Statistical Factsheet, “European Union- Indonesia” available at:
http://ec.europa.eu/agriculture/trade-analysis/statistics/outside-eu/countries/agrifood-indonesia_en.pdf
20
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Tastes of Europe Indonesia – Market Entry Handbook
and as Indonesian enforcement authorities become more aware of GI protection and
enforcement.
The European products that are presently registered as GIs include Champagne (wine) from
France (Registration ID: ID G 000000002), Parmigiano Reggiano (cheese) from Italy
(Registration ID: ID G 000000009) and Grana Padano (cheese) from Italy (Registration ID: ID
G 000000045).
Opportunities for Foreign-Supplied Products
The following are some of the opportunitieswhich exist for the supply of foreign goods in the
Indonesian market:
1. Temperate fresh fruit, processed fruits and vegetables, beef, French fries, tree nuts, and
pet foods are among the most imported products. Sixty percent of fresh fruit sold in
hypermarkets is imported.
2. Western cuisine is becoming more common and western products such as breakfast
cereals, spreads and baked goods are often consumed in the place of traditional rice or
noodle breakfasts.
3. Changing dietary habits are driving consumption growth of milk, yoghurt, cheese, pasta,
meat nuggets, sausages, and red meats.21
2.2 Growth drivers and trends
Prospects and trends regarding the food and beverage sector remain broadly positive for a
number of reasons. Some of the main reasons include: (i) rising incomes and growing consumer
confidence; (ii) a young and growing Indonesian population; (iii) increased urbanisation; (iv)a
growing awareness of healthy lifestyle products; (v) the shift of consumers towards modern
retail stores; and (vi) a growing Indonesian tourism industry.
Rising incomes and growing consumer confidence
Rising incomes and growing consumer confidence in Indonesia will support a growing demand
for a wider product range and higher-value products. Indonesia's economy is largely driven by
rising household consumption, and one industry that thrives on this like no other is that of food
and beverages. Sales growth is fueled by rising personal incomes and increased spending on
food and beverages, especially from the growing number of middle class consumers.
According to Adhi Lukman, General Chairman of the Indonesian Food and Beverage
Association (Gapmmi), Indonesia's purchasing power is improving amid overall rising
commodity prices.22 This is reflected by a strong demand for food and beverages in August
2016. Regarding full-year 2016, turnover in Indonesia's processed food and beverages industry
is expected to reach IDR 1,400 trillion (approx. EUR 100 billion), up 8 percent (y/y). The first
semester of the year will contribute about 60 percent to full-year turnover as consumption of
food and beverages increased in June due to Islamic celebrations.
U.S. Department of Agriculture, “Indonesia Exporter Guide”, GAIN Report, December 2014, available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Jakarta_Indonesia_12-302014.pdf
22
©Indonesia Investments, “Food and Beverage Industry of Indonesia: Positive Outlook” available at:
http://www.indonesia-investments.com/news/todays-headlines/food-beverage-industry-of-indonesia-positiveoutlook/item7135
21
22
Tastes of Europe Indonesia – Market Entry Handbook
Young, growing Indonesian population
Indonesia has a large youth population of 40.9 million between the ages of 15 and 24 which is
expected to drive demand for more westernised products such as confectionery goods. Jakarta
will be the city with the largest young and consumptive population in the world by 2030.
One of the major trends is growing health consciousness among Indonesia's young population,
which creates opportunities for products such as nutritional drinks or cereals enhanced with
vitamins and minerals.
Urbanisation and a growing office workforce make also convenience foods popular, such as
ready-to-drink coffee and tea, as well as sport and energy drinks.
Increased urbanization
The UN forecasts that two-thirds of the Indonesian consumers will be urbanised by 2050, and
60 percent of these will be located on Java Island.
Lifestyle changes in Indonesia's urban centres largely follow the trends of established markets,
with office workers having less time for cooking, or less interest in doing so, yet demanding
health-boosting food. Importantly, shoppers are gaining access to a wider range of products
thanks to the country's developing retail infrastructure, with hypermarkets and mini-markets
moving deeper into the regions
Indonesia has several large- and medium- sized cities with populations of more than one
million inhabitants. At the same time as overall urbanisation increased in Indonesia, the
country’s cities are developing into unique markets based on income levels and economic
structure. For example, Jakarta is highly internationalized city and Indonesia’s political centre,
attracting a cadre of foreign and cosmopolitan consumers. Surabaya on the other hand is a
major port, and key export point for commodities such as tobacco, coffee and sugar, which
influence local demand.
Growing awareness of healthy lifestyle products
Indonesian consumers are increasingly health-conscious and aware, in-line with global trends.
This provides opportunities for products targeted at alleviating certain health conditions such
as calcium fortified milk to prevent osteoporosis, dairy milk for nursing mothers, baby food
and products for weight problems.
Moreover, consumers are looking for fast and convenient food without significantly
compromising on healthy eating. One product category that fits the bill is frozen foods, which
reduces cooking time, but maintains much of the 'goodness' contained in vegetable or animal
products. The expansion of modern retail outlets across the archipelago is the main driver for
frozen food sales in Indonesia. Equipped with freezers and modern storage facilities,
hypermarkets and supermarkets help to supply frozen goods even to formerly underserved
regions such as eastern Indonesia.
Expanding mass grocery retail sector
The availability of imported products will be accommodated by the rapid growth of the modern
retail sector. Hypermarkets, supermarkets, and minimarkets are developing rapidly in
Indonesia as purchasing power increases. Development is primarily occurring in urban areas,
23
Tastes of Europe Indonesia – Market Entry Handbook
and the prospects for the continued retail sector expansion throughout Indonesia remain
promising.23
Growth of tourism sector
The growth of the tourism sector in
Indonesia is expected to increase
the demand for imported products
especially
in
the
horeca
(hotel/restaurant/café)
sector.
Currently, Indonesia’s tourism
sector is benefitting from its
proximity to major regional
markets, an expanding luxury hotel
sector and greater international air
connectivity. 24
Additionally,
supporting growth in the tourism
sector are ongoing and widespread
government-led investments in
transport infrastructure, which is
gradually improving accessibility
across Indonesia's many islands.
Tourism is a significant driver for food service
consumption in Indonesia and influences local culinary
preferences
General consumer tastes and preferences
The following provides a synopsis of the tastes and preferences of Indonesian consumers:
1. Most consumers prefer fresh foodstuffs, which are readily available in their
neighborhood at affordable prices. Healthy eating is becoming more popular among
educated consumers and is regularly featured in print and broadcast media. Fresh foods,
fruit juices, fruit concentrated-based beverages, organic foods, sugar-free confectionery,
packaged food with higher fiber content, dairy products, vitamin and calcium fortified
packaged food and beverages are also preferred by middle to upper-income consumers.
2. Traditional and modern snack foods, such as confectionaries, pastries, cakes, biscuits,
ice cream, or sweet and savory snacks are very popular among Indonesians.
3. Local flavours are generally preferred and local food manufacturers are exploring
opportunities to produce new products using a combination of local and imported
flavours. Frozen foods and instant noodles, which are easy to prepare for children, are
popular among working mothers.
4. Smaller package sizes are often preferred due to convenience, price considerations, and
weight management concern. Consumers are showing a growing concern about food
additives, high amount of MSG, fat, sugar, salt, and preservatives in packaged food.25
U.S. Department of Agriculture, “Indonesia Exporter Guide”, GAIN Report, December 2014, available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Jakarta_Indonesia_12-302014.pdf
24
©Indonesia Investments “Tourism Industry Indonesia”, available at https://www.indonesiainvestments.com/business/industries-sectors/tourism/item6051?
25
U.S. Department of Agriculture, “Indonesia Exporter Guide”, GAIN Report, December 2014, available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Jakarta_Indonesia_12-302014.pdf
23
24
Tastes of Europe Indonesia – Market Entry Handbook
2.3 Market access and market entry
All food and drink products must be registered at the Indonesia National Agency of Food &
Drug Control (BPOM), which can be done by the local distributor or agent. It can be a lengthy
process with standard product
registration taking at least 50 to 60
days. All imported products must
display the ingredients used, storage
requirements and any applicable
health warnings in Indonesian.26
A health or safety certificate from
the country of origin must
accompany all food imports. The
certificate is to be issued by the
responsible authority in the country
of origin or the exporting country. It
should state that the food is safe or
fit for human consumption, and that
its distribution is permitted in the
country of origin.
Indonesia’s geography and established maritime
transport services lead to most agri-food trade being
conducted by sea
Certain products are the subject of more protectionist policy, namely those that may compete
with locally produced goods, such as electronics and a range of agricultural products, including
coffee and tea, as well as luxury goods. Furthermore, “Alcoholic beverages are strictly
controlled and subject to high rates of excise.”27 The requirements for obtaining approval for
importing alcoholic liquor are listed in several Ministerial and Departmental documents.
Furthermore, the Ministry of Agriculture (MOA) and The Ministry of Trade (MO) regulations
limit the sale of imported beef to the hotel and restaurant industry. Indonesian regulations also
prohibit retailers from purchasing imported horticultural products directly from importers,
limiting product availability and increasing prices. 28 There are also several regulations
regarding the import of rice, sugar, seeds, and meat and poultry products. An Import Permission
Certificate must be obtained from the Director General of Livestock Services.
2.4 Transportation infrastructure
As Indonesia is an archipelago with thousands of islands, freight and transportation can be both
complex and expensive. Transportation times and costs vary upon the mode of transportation
and goods selected and it may require a combination of two or more means of transport to reach
some markets in Indonesia.
Concerning goods transport, the sea route is used the most. Almost 70 percent of imports pass
through the two main ports which are Tanjung Priok (Jakarta) and Tanjung Perak (Surabaya).29
Ports are managed by the various Indonesia Port Corporations, of which there are four,
Australia Trade and Investment Commission, “Food and Beverage to Indonesia” available at:
https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Indonesia/Industries/food-andbeverage.
27
“Food Safety Standards in Major Export Markets: A Readymade Guide for Agro Exporters”, Ministry of
Foreign Affairs of the Republic of Indonesia, available at:
http://www.kemlu.go.id/kyiv/Documents/indonesia_food_regulations.pdf.
28
U.S. Department of Agriculture, “Indonesia Exporter Guide”, GAIN Report, December 2014, available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Exporter%20Guide_Jakarta_Indonesia_12-302014.pdf
29
For further information on product logistics channels in Indonesia, see: OECD, “Regulatory and Competition
Issues in Ports, Rail and Shipping”, available at: https://www.oecd.org/indonesia/Chap%205%20%20Ports%20Rail%20and%20Shipping.pdf.
26
25
Tastes of Europe Indonesia – Market Entry Handbook
numbered I through IV. Each has jurisdiction over various regions of the country, with I in the
west and IV in the east. Shipping to Indonesia usually happens via Singapore. Some cargoes
are also transshipped via regional ports. The distribution system on the island of Java is
improving, providing increased access to a population of 145 million.
Infrastructure challenges
According to figures by the Indonesian Chamber of Commerce and Industry (Kadin Indonesia),
logistics costs represent around 17 percent of a company’s total expenditure in the country.30
In peer regional economies, this number lies below ten percent. Transport costs are high both
for land and sea transport. Despite Indonesia's archipelagic geography, the country's sea
transport is yet to be developed substantially.
Infrastructure is often inadequate, especially outside of Java and major cities. The ability to
transport frozen and refrigerated products is limited. Inadequate port facilities are often cited
as the single largest distribution constraint. Shallow drafts limit ports to small ships, and
inadequate loading/unloading facilities and frequent congestion are frequently cited problems.
Poor roads and bad traffic both inside and outside of ports are also a major constraint.
Distribution firms also list unreliable shipping schedules and an inadequate number of small
ships serving Eastern Indonesia, particularly during bad weather periods, among the transport
challenges. This can result in shortages and obligate firms to maintain large and costly
inventories.31
Distribution Channels and Intermediaries
Distribution of infrastructure in Indonesia is fragmented geographically, while mom-and-pop
stores lead in many consumer categories. Modern retailing has made rapid inroads, as channels
are growing. Wholesale and hypermarket outlets procure from domestic suppliers or directly
from manufacturers and importers.32
There are about 16 major cities that serve as distribution hubs in Indonesia. They are Bandung,
Cirebon, Yogyakarta, Semarang, Surabaya, Makassar, Manado, Denpasar, Mataram,
Balikpapan, Banjarmasin, Medan, Padang, Pakanbaru, Palembang, and Batam.
There are many elements to the food distribution supply chain including importers, distributors,
retailers and food service operators. The appointment of a local partner or importer is essential.
A reputable importer will be able to supplement knowledge of the feasibility of market entry
in the first instance, but also help create a development plan for the product over time. Such
partners can help register a product, advise on marketing, organise logistics and liaise with the
most appropriate retail outlets. They have established networks with defined geographies and
reach.
Distributors and agents usually sell directly to modern retail, the food service industry and, in
case of ingredients, directly to manufacturers. Goods are shipped to warehousing facilities or
delivered directly to the store.
It is crucial that exporters consider the following steps:
©Indonesia
Investments,
“Infrastructure
in
Indonesia”
available
at:
http://www.indonesiainvestments.com/business/risks/infrastructure/item381
31
U.S. Department of Agriculture, “Indonesia Retail Foods”, GAIN Report, December 2015, available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-182015.pdf
32
Ibid.
30
26
Tastes of Europe Indonesia – Market Entry Handbook
✓ Appoint the right business partner who has an Import Identifier Number;
✓ Visit the market on a regular basis: face-to-face contact and the development of a
relationship is critical to business success;
✓ Prepare comprehensive information packs profiling your company, product
specifications, pricing and terms of payment;
✓ Participate in major trade exhibitions to showcase products to a relevant audience and
buyers; and
✓ Support importers, distributors and retailers with marketing and collateral spending.
Retail Channels
Consumer spending represents a significant although share of GDP in Indonesia.
Economic uncertainty eased
after the election of proreform President Widodo in
July 2014. GDP growth is
expected to rebound after
reaching a five-year low and
should outpace other regional
markets
going
forward.
Despite a slight decline in
retail sales per capita in 2014,
total retail sales grew by 14.5
percent as retailers continue to
be drawn to Indonesia's large
population
and
growing
middle class.
Imported products from the
EU can make use of several
Wetmarkets and traditional retailers still account for a
different retail channels, each
significant share of food purchases in Indonesia
with their own advantages and
disadvantages. Understanding the potential of various retail channels is important for
understanding the market and shaping entry strategies accordingly.
While traditional markets still account for the majority of retail food sales in Indonesia, modern
retail is expanding and holds a significant share. 33 Traditional retail outlets, including wet
markets and independent grocery stores, are gradually being replaced by modern outlets. The
key characteristics of the main retail channels in Indonesia are listed below.34
Hypermarkets and supermarkets offer a wide range of food and beverage products and are
generally located as anchor stores in shopping centers. Supermarkets differentiate themselves
from traditional retailers by marketing high-quality fresh produce, a substantial portion of
which is imported. Indonesian middle and upper income level consumers are increasingly
shopping at these stores. Additionally, hypermarket and supermarket retailers usually contain
in-store bakeries, cafés and restaurants, and prepared meals, with grocery products typically
making up about 65 percent of the total sales.
U.S. Department of Agriculture, “Indonesia Retail Foods”, GAIN Report, December 2015, available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-182015.pdf
34
Ibid.
33
27
Tastes of Europe Indonesia – Market Entry Handbook
Minimarkets, convenience stores,
and other shops carry a wide range
of convenience food products such as
readymade meals, bakery products,
processed food, ice cream, and
beverages. They sometimes carry a
limited offering of fresh fruits and
are open 24 hours a day. These stores
can be found throughout Indonesia’s
major urban centers and are also colocated with gasoline stations.
While traditional small grocers
(warungs) may not be able to offer
the variety of products and services
Warungs are prevalent food retailers in Indonesia,
catering to consumers’ convenience-oriented
offered by minimarkets, they do sell
preferences
and often in informal or semi-formal
local food and beverage products
formats
familiar to most consumers. This
differentiation, along with location, helps them remain competitive against organised retail.
Traditional markets also remain an important retail channel in Indonesia.
2.5 Key markets by geography
The island of Java will continue to be the main area for commercial opportunities, with more
than half of the population living on the island and relatively high incomes, especially in Jakarta
and Central Java. However, with the island increasingly saturated by numerous operators,
leading retailers and other businesses are likely to expand to other regions.
Although Jakarta is the capital city of Indonesia, it is erroneous to believe that almost all of
Indonesia’s growth comes from Jakarta alone. Jakarta is indeed the major contributor to
Indonesia’s economic output, accounting for between one-fifth and one-quarter of the total, if
the whole of greater Jakarta - known in Indonesia as Jabodetabek - is included. However, a
broad swathe of mid-sized cities is outstripping the capital’s GDP growth.
Mid-sized and large middleweight cities
The economies of mid-sized and large middleweight cities - with between two million and ten
million inhabitants - have been growing at a faster pace than Jakarta’s economy (6.7 percent a
year for large middleweights and at least 6.4 percent for mid-sized middleweights) since 2002.
These cities include Bandung, Bekasi, Bogor, Medan, Surabaya, and Tangerang. Bekasi, Bogor,
Depok, and Tangerang are often treated as part of the Jakarta urban agglomeration. The output
of these cities is expanding mainly thanks to their high population growth. Bandung (Java) is
growing at 6.7 percent a year, while Surabaya (Java) and Medan (Sumatra) are each growing
at 7 percent a year, largely driven by improvements in productivity. “Urban population in West
Java (including Jakarta) is expected to increase from currently 60 per cent to 80 per cent by
2025”35
35
Peter D. Ellis , “Indonesia’s Urban Development Towards Inclusive and Sustainable Economic Growth”, World
Bank, available at: https://siteresources.worldbank.org/INTURBANDEVELOPMENT/Resources/3363871296405826983/Ellis.pdf.
28
Tastes of Europe Indonesia – Market Entry Handbook
Small middleweight cities
Small middleweight cities are defined as cities (kota) or districts (kabupatens) with urban
populations of between 150,000 and two million. They are growing at an average annual rate
of 5.9 percent, on par with Jakarta. Around 40 percent of the cities in this category are outside
Java. Among the fastest-growing cities in this category are Pekanbaru in Sumatra, Pontianak
and Balikpapan in Kalimantan, and Makassar in Sulawesi with growth of respectively 9.8, 9.5,
8.6, and 9.0 percent. The economies of Pekanbaru, Pontianak, and Balikpapan are benefiting
from the commodity boom, while Makassar is a key commercial centre for Eastern Indonesia.
Growth in small middleweights is, in general, being fueled by simultaneous growth in their
populations and productivity.36
Indonesia’s 2025 Vision for Major Cities
As a country consisting of thousands of islands and located between two continents and two
oceans, the Indonesian archipelago has a unique combination of economic potential with
specific major islands or regions having its own strategic future-role in achieving Indonesia’s
2025 vision [Masterplan for the Acceleration and Expansion of Indonesia's Economic
Development Plan (MP3EI 2011-2025)]. By taking into consideration the potential and
strategic roles of each major island, six economic corridors have been identified as depicted in
the map below.37
Figure 3: Masterplan for the Acceleration and Expansion of Indonesia's Economic Development
Source: ©Investment Indonesia
Each of the economic corridors – Sumatra, Java, Kalimantan, Sulawesi, Bali-Nusa Tenggara,
and Papua-Kepulauan Maluku – will focus on developing a number of main economic activities
in accordance with their respective advantages. It is important to note that Java is expected to
be the main economic corridor for the food and beverages industry.
2.6 Customs, SPS Requirements and Labelling
Customs Procedures and Documentation
All shipments to Indonesia must pass through bureaucratic verifications jointly administered
by the Finance Ministry’s Taxes and Customs Office and the Trade Ministry. For food
products, the recommendation from the Agriculture Ministry, the Environment and Forestry
Ibid.
©Indonesia Investments, “Masterplan: Acceleration and Expansion of Indonesia Economic Development
2011-2025” available at: http://www.indonesia-investments.com/projects/government-developmentplans/masterplan-for-acceleration-and-expansion-of-indonesias-economic-development-mp3ei/item306
36
37
29
Tastes of Europe Indonesia – Market Entry Handbook
Ministry, the Food and Drug Monitoring Agency (BPOM), or the Indonesian Ulama Council
(MUI) might be considered.
It is highly suggested that exporters looking to ship products to Indonesia seek advice from
local partners to go through the bureaucratic hurdles, as Indonesian officials strongly prefer
high-contact interaction such as phone calls or face-to-face meetings with native speakers.
Meanwhile, logistics costs are relatively high in the country compared to its peers in the
Southeast Asian region due to the layered bureaucratic red-tapes between ministries to process
the permits, with waiting time in Indonesian seaports being painstakingly long at certain busy
periods of the shipping seasons.
To deal with the local bureaucratic procedures, foreign companies usually appoint one or more
agents or distributors, preferably those who possess an Import Identified Number (API – Angka
Pengenal Import). The local representatives can then keep track of market regulations, which
tend to change at short notice. Verification should be necessary whether the local distributors
or retailers have the Import Approval (PI) that would be required for the exported goods to pass
the customs.
Important stakeholders in export-import process in Indonesia:
a) The Finance Ministry’s Taxes and Customs Office
All goods coming into Indonesia must be cleared through customs and they are subject to
customs duty and other taxes related to import unless specifically exempted from duty by law.
There are several processes one needs to undergo prior to the clearance process, such as
declaration and documentation; an instructional outline of required procedures can be accessed
here.
The Finance Ministry’s taxes and customs office is responsible for the goods’ clearance, but it
must first receive verification from institutions such as the Trade Ministry and, when required,
the Agriculture and Trade Ministry, or the Environment and Forestry Ministry. The following
notes on customs declaration procedures should be considered for the import of goods into
Indonesia:
The import declaration should be made with Importer/Customs Broker module.
• Customs supplementary documents:
o Invoice
o Packing List
o Bill of Lading/ Airway bill
o Insurance Policy
o Receipt of payment of import duty and import related taxes (SSPCP)
30
Tastes of Europe Indonesia – Market Entry Handbook
o
Power of Attorney, if submitted by Customs Broker
Figure 4: Guidelines for Foreign Enterprises on the Import of Overseas Shipments in Indonesia38
Source: ©EU-Indonesia Business Network
The Finance Ministry taxes and customs office has three dedicated lines for overseas shipments
coming to Indonesia:
1. Red Channel, where 30 to 100 percent of the shipped goods would undergo physical
inspection and document verification prior to the issuance of the Approval Letter for
Clearance of Goods (SPPB). Included in this category are high-risk commodities,
shipments that come from high-risk countries, certain imported goods set by the
Indonesian government, re-import goods, as well as those shipped by new importers.
2. Yellow Channel, where the goods might not have to undergo physical inspection but
would have to go through the document verification process prior to the issuance of the
clearance approval letter. Included in this category are low-risk goods exported by highrisk exporters, or medium-risk goods exported by medium-risk exporters.
3. Green Channel, where the shipped goods would not have to undergo physical
inspection and will only go through the document verification process after the issuance
of the clearance approval letter. Included in this category are priority shipments from
big multinational firms who have become the Indonesian government’s strategic
partners (MITA).
38
The customs clearance procedure is available at: http://www.eibn.org/en/page/bizguide_content/2
31
Tastes of Europe Indonesia – Market Entry Handbook
b) The Food and Drug Monitoring Agency (BPOM)
Pharmaceutical, food and cosmetic products exported to Indonesia need to be registered at the
Food and Drug Monitoring Agency (BPOM) that is responsible for the health and safety
standards of edible products in Indonesia, particularly food and drugs. A recommendation from
the BPOM – with the addition from the Agricultural Ministry for livestock food products – is
required to receive shipment approval from the Ministry of Trade.
The time it takes for BPOM to issue safety certificates for food products is expected to be
shortened as President Joko Widodo’s administration, in his economic package announced in
2015, has pledged to conduct reforms in the agency and to make certain business permit
applications easier. “The government planned to review 89 regulations to avoid the duplication
of business licensing procedures.”39
The registration process in the BPOM:
1. Make an account and register the application online through http://e-bpom.pom.go.id.
2. Upload and submit the required documents as stipulated on the website, which include
health certificates, lab tests, among others.
3. Pay the required Non-Tax State Revenue (PNBP). The invoice, together with the
supporting documents such as packing lists, would also be required for the export
declaration documents (PEB) processed in the Trade Ministry.
4. Go to the PBOM office in Jakarta to consult with officials in charge and to get the
issued (paperless) certificate of recommendation from the agency.
c) The Indonesian Ulama Council (MUI)
The Indonesian Ulama Council (MUI), the nation’s highest authority on Islamic affairs, is
responsible for issuing the “Halal” certification, which is valid for two years. Halal certification
proves that the exported foods have been produced, processed and distributed according to the
Islamic sharia law, and are safe to be consumed by Muslims, with the rules comprising of:
- Meat must not come from pigs and dogs and other animals with long pointed tusks that
are used to kill prey such as tigers, lions, bears, elephants, cats, monkeys, among others,
as well as pests such as rats or scorpions.
- Meat must come from animals that are slaughtered in ways that comply to the Sharia
law.
- Processed food should be cooked accordingly until raw blood is completely gone from
the meat tissues.
- All fish and sea creatures are halal, except for amphibious animals such as alligators or
frogs.
- All vegetables, mushrooms and other plant products are halal, except for those that are
considered poisonous or have harmful effects to the body.
- Beverages should not include alcohol no matter how small its amount.
- Food must be stored or transported in wares that are not in direct touch with non-Halal
materials, such as those containing dog, pork, or alcoholic water.
Exporters to the country can apply for the certification online, with all the documents available
to be downloaded at www.halalmui.org and www.e-lppommui.org, or with the assistance of
various market entry consultancy firms in Indonesia.
39
The Jackarta Post, “Economic deregulation package announced”, September 2015 available
http://www.thejakartapost.com/news/2015/09/09/economic-deregulation-package-announced.html
at:
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Tastes of Europe Indonesia – Market Entry Handbook
1. Fulfil the Halal food processing requirements as stipulated by MUI in Halal Assurance
System (HAS) 23000.
2. Collected all the necessary documents and Halal certification paperwork online
available in the websites.
3. Pay the required processing fees.
4. Prepare to have the goods tested in the following processes: Pre-Audit assessment,
Audit, and Post-Audit Lab Analysis.
5. Receive the Halal certificate.
Currently, it is not mandatory for food and beverage products exported to Indonesia to obtain
Halal certificates – imported pork meat or alcoholic beverages, for example, could still be sold
in limited places in the country without the certificate – but it is nevertheless strongly
recommended in a country where more than 80 percent of the total population is Muslim.
Nevertheless, the law, drafted in 2014, [not yet in force] requires all food, pharmaceutical,
and cosmetic products that are consumed in Indonesia to have halal certification (which
indicates the product was prepared according to Islamic law) by October 2019.40 The draft has
been in the House of Representatives’ table since 2006 but is not yet passed into law due to its
highly political nature.
The draft bill also proposes the establishment of an independent halal certification body,
effectively curbing the MUI’s authority. At the moment, the MUI and the government – in this
case the Religious Affairs Ministry – are still wrangling in a power struggle on who should be
responsible for issuing the Halal certification.
Import declaration forms
The types of import declaration forms based on purpose of the import are as follows:
Market Access Database: Procedures and Formalities
Details on the required documents, including examples of these forms, and detailed information
on the procedures for customs clearance are available on the Market Access Database. Both
general information and specific information per product category is available via search
functions using HS 4 codes.
Website: http://madb.europa.eu/madb/indexPubli.htm
SPS Requirements in Indonesia
SPS measures may be applied in any territory or country to protect the human and animal
populace as well as flora and fauna from a variety of risks such as diseases, pests, residues and
toxins. SPS measures include the formation of National Standards on residues and additives,
inspection procedures, and quarantine regulations. Most of the SPS measures in Indonesia are
in line with international standards, however, there are some areas where deviations do exist
and exporters should be aware of potential impacts this may have.
The five main regulators for food safety, animal health and plant health in Indonesia are:41 the
Indonesian Agricultural Quarantine Agency (IAQA), the Directorate-General of Livestock and
Animal Health, and the Directorate-General of Horticulture, which fall under the responsibility
Halal Focus, “Indonesia: Mandatory Halal Certification Looms for Food, Pharamceuticals and Cosmetics”,
available at http://halalfocus.net/indonesia-mandatory-halal-certification-looms-for-food-pharmaceuticals-andcosmetics/.
41
© World Trade Organisation, “Sanitary and Phytosanitary Measures” available at:
https://www.wto.org/english/tratop_e/tpr_e/s278_e.pdf
40
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Tastes of Europe Indonesia – Market Entry Handbook
of the Ministry of Agriculture. The Fish Quarantine and Inspection Agency (FQIA) is part of
the Ministry of Marine Affairs and Fisheries and the National Agency for Drug and Food
Control (BPOM) falls under the President's responsibility.
The main laws concerned with food safety, and animal and plant health are: Law No. 16/1992
on Animal, Fish and Plant Quarantine; Law No. 7/1996 on Food; Law No. 31/2004 on Fisheries;
Law No. 18/2009 on Animal Husbandry and Animal Health; and, Law No. 13 of 2010 on
Horticulture.42
In recent times, specific concerns have been raised in the WTO SPS Committee about
Indonesia’s SPS policies, including about import restrictions on pork products due to influenza
A/H1N1 (raised by Mexico and supported by Australia, Brazil, Canada, the Dominican
Republic, and the United States); new meat import conditions (raised by the EU); import
restrictions on poultry meat (raised by Brazil); import restrictions on beef and recognition of
the principle of regionalization (raised by Brazil); and Indonesia's port closure (raised by the
United States and supported by Australia, Canada, Chile, EU, Japan, the Republic of Korea,
New Zealand, and South Africa).43
Examples of SPS measures that have impacted specific products or product categories from
the European Union include unjustified import restrictions on a number of animals and animal
products related to Bovine Spongiform Encephalopathy (BSE) and other diseases; and export
of plant and plant products through Tanjung Priok port (Jakarta) which since early 2012 are
opened only to countries with a so-called Country Recognition Agreement (CRA). None of the
EU Member States have concluded a CRA. New legislation for food (Food Law 18/2012) selfsufficiency puts a temporary ban on agriculture and fisheries’ imports.44
Standards
The National Standardisation Agency of Indonesia (Badan Standardisasi Nasional, BSN)
remains the governmental institution responsible for coordinating and facilitating standard
setting. BSN is also the contact point for cooperation with international standard setting bodies.
Indonesia National Standards (SNIs) are voluntary. However, those related to national security
requirements, the prevention of deceptive practices, protection of human health or safety,
animal or plant life or health, and the environment may be adopted to be mandatory.
Some of the concerns raised by WTO members about the application of TBT measures to
imports in Indonesia include:
1. Transparency in the development of a new regulation regarding trade in Halal products,
and the absence of a notification to the TBT Committee before its entry into force
(raised by the United States);
2. Labelling requirements for certain imported goods prior to their entry into the
Indonesian customs area, including a requirement for importers (and domestic
producers) to submit a sample label to the Ministry of Trade in order to obtain a
certification of labelling in the Indonesian language. The EU, Australia, and the United
States argued that these measures were more burdensome than necessary to achieve the
stated objectives of surveillance and consumer information, and asked Indonesia to
consider other options. Concern was also expressed that this measure had not been
notified to the TBT Committee prior to its entering into effect; and
Ibid.
Ibid.
44
European Commission, DG Trade, Market Access Database, “Sanitary and Phytosanitary Issues” available at:
http://madb.europa.eu/madb/sps_barriers_result.htm?description=&countries=ID&days
42
43
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3. Import permit regulations for horticultural products from the ministries of Agriculture
and Trade (raised by the EU, the United States and South Africa).45
Labelling
The labelling requirements for products can be one of the stumbling blocks for companies
exporting to Indonesia and those wishing to enter the market should ensure that they are in full
compliance with all labelling requirements to avoid issues for customs clearance procedures.
Basic labelling requirements
Specific labelling requirements are stipulated under Government Regulation No. 69/1999 on
Food Labels and Advertisement ("GR 69"). According to GR 69, anybody producing or
importing packaged food into Indonesia for trade must label food as part of the food packaging.
The label must contain at least the following details:
a) the name of product;
b) a list of ingredients;
c) the net weight or net content;
d) the name and address of the manufacturing party or importer; and
e) the date of expiration.
The labels shall be written or printed by using the Indonesian language, Arabic figures and
Latin letters. These letters shall be clear and easy to read.
Information regarding the ingredients used in the production process must be mentioned on
labels in the form of a list, beginning with the ingredient which has the largest proportion. This
does not apply to vitamins, minerals, and other nutritional supplements.
Information on the nutritional content of food shall be provided on the food label. Where
applicable, this is to be accompanied by a declaration of any vitamins, minerals and/or other
kinds of nutritional supplement present in the food. Nutritional content information shall be
contained in the following order:
a) total volume of energy, with specifications based on amounts of energy derived from
fat, protein and carbohydrates.
b) total volume of fat, saturated fat, cholesterol, carbohydrates, fibre, sugar, protein,
vitamins and minerals.
Some product specific requirements for labelling include:
1. On products derived from swine: the words "MENGANDUNG BABI." (Contains
pork) to be written in red 'universe medium corps 12' font and enclosed in a red
rectangle together with a drawing of a pig.
2. On sweetened condensed milk: the words "PERHATIKAN! TIDAK COCOK
UNTUK BAYI." (Beware! Not suitable for babies) to be written in Indonesian in red
'universe medium corps 8' font and enclosed in a red rectangle.
3. Alcoholic beverages must have “MINUMAN BERALKOHOL”, DIBAWAH UMUR
21 TAHUN ATAU WANITA HAMIL DILARANG MINUM (Prohibited for use by
people under 21 years or pregnant women) on the label.
4. Irradiated packaged food must carry the words "RADURA: PANGAN IRADIASI"
(Irradiated food), the reason for irradiation and this logo. Also required are the name
and address of the radiation facility, the month and year of irradiation, and the country
in which the process was carried out. If the food cannot be re-irradiated, then the label
© World Trade Organisation, “Standards and Technical Regulations” available at:
https://www.wto.org/english/tratop_e/tpr_e/s278_e.pdf
45
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Tastes of Europe Indonesia – Market Entry Handbook
should include the word: “TIDAK BOLEH DIRADIASI ULANG” (Not to be reirradiated).
5. Food derived from genetic engineering must have” PANGAN REKAYASA
GENETIKA” (Genetically Engineered food) on the label.46
Processed food for infants, children below five, pregnant or breast-feeding mothers, people on
special diets, elders, and sufferers of certain diseases should be informed of the portion size,
method of use and other necessary instructions, including the impact of the food on human
health. If the product has been approved as meeting Indonesian Islamic standards, then “Halal”
should appear on the package.
Labels are unacceptable unless they meet all the requirements of the Indonesian law, but stickon labels meeting Indonesian requirements may be affixed. Foreign languages in addition to
the mandatory Indonesian language may be used. In general, although they can be widely
found on retail products, foreign expressions are discouraged since they are seen as potentially
misleading to a majority of the population.
Packaging and Container Regulations
Packaging is regulated under the Food Act of 1996 as follows: Any person producing food for
sale is forbidden to use any material that has been banned or can release contaminants that are
dangerous or harmful to human health. Food for sale is to be packaged using methods that
avoid spoiling or contamination. The government identifies forbidden packaging materials and
methods for packaging certain food.
If the effects of a packaging material on human health are not known, it cannot be used before
being checked for safety. New types of material may be used for packing food only after
receiving government agreement.
No person is permitted to unwrap and re-pack food, except in the case of bulk food intended to
be packed into smaller packages.
There are no industry regulations or practices applicable to package size. The metric system is
used for weights and measures. Waste disposal is not regulated, except as covered in Section
VI for time expired food.
Halal labelling
In September 2014, Indonesia passed a law governing halal products
(33/2014). The law makes halal certification mandatory for all food,
beverage, drugs, cosmetics, chemicals, and organic and agricultural
biotech products sold in Indonesia, as well as machinery and equipment
used in processing these products, subject to further implementing
regulations.47
Companies have three years from October 2014 to comply with the new
law. In the meantime, companies have been instructed to follow existing Indonesia Ulama
Council (MUI) halal-certification procedures. The new law also states that the Indonesian
“Food Safety Standards in Major Export Markets: A Readymade Guide for Agro Exporters”, Ministry of
Foreign Affairs of the Republic of Indonesia,available at
http://www.kemlu.go.id/kyiv/Documents/indonesia_food_regulations.pdf
47
U.S. Trade Department, “Indonesia: Foreign Trade Barriers” available at:
https://ustr.gov/sites/default/files/files/reports/2015/NTE/2015%20NTE%20Indonesia.pdf
46
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government will establish a new institution called the Halal Product Guarantee Agency to issue
halal certificates. Once formed, this agency will assume the role currently fulfilled by the MUI.
As of March 2015, implementation of the halal law remained uncertain, partly due to resource
restraints.48 Fresh and processed meat should be halal certified in order to be better marketed
in Indonesia.
Organic labelling
Products that meet organic requirements may use the word organic on
their product as well as use the Indonesia’s organic logo on their
labels. Foreign organic logos can be placed next to the Indonesian
organic label logo. Indonesian consumers trust local brands more than
foreign brands, but the Indonesian organic label could increase the
trust towards foreign products. As a result, the label could attract
health-conscious consumers. The Organik Indonesia label is
administered by the Office for National Standardisation BSNI &
Otoritas Kompeten Pangan Organik.
2.7 The Status of Geographical Indications (GIs) and Intellectual Property (IP)
Protection
Indonesia became a member of the World Trade Organization (WTO) on January 1, 1995.
Through Law No. 7 of 1994 the country has fully adopted the Agreements Establishing the
WTO, including the agreement on Trade-Related Intellectual Property Rights (TRIPS).
Therefore, the country recognises Geographical Indications (GI) as a part of Intellectual
Property Rights (IPR). It is also important to note that Indonesia has ratified the Paris
Convention since December 24, 1950, as well as it joined the World Intellectual Property
Organization in 1979.
Definitions of GIs in Indonesia
In Indonesia, GI protection is regulated under the Law No. 15 of 2001 about Trademark,
Chapter VII, which provides the Protection of GI and Source of Origin. The definition of GI
based on Article 56 (1) of Law No. 15 of 2001 is “GI shall be protected as a sign which
indicates the place of origin of goods, which due to its geographical environment factors,
including the factor of the nature, the people or the combination of the two factors, gives a
specific characteristics and quality on the goods produced therein”. In implementing GI
protection system, the law has been followed up by Government Regulation No. 51 of 2007
about GI. The goods may be agricultural products, foodstuffs, handicrafts or any other goods
complying with the provision.
The Indonesian Trade Mark Law also accepts registrations for geographical indications (GIs).
A geographical indication is a name or a sign used on goods that have a specific geographical
origin and possess qualities, a reputation or characteristics that are essentially attributable to
that place of origin. The following signs from the EU have been accepted for registration as
GIs in Indonesia: Champagne, Parmigiano Reggiano, and Grana Padano. Other recognised GIs
in Indonesia include Pisco, Kopi Arabika Kintamani, Lada Putih Muntok, and Kopi Arabika
Gayo. The party entitled to register will have to be an institution representing the community
in the area that produces the goods.
48
Ibid.
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Protection
Registered GIs shall be protected against any:
-
-
-
Direct or indirect commercial use of a registered GI in respect of goods not complying
with the book of requirements;
Direct or indirect commercial use of a registered GI in respect of goods covered as well
as not covered by the registration to the extent that those goods are comparable to those
covered under this registered GI or to the extent that this use benefits or could benefit
from the reputation of the Geographical Indication;
Commercial use of a registered GI which misleads the public as to the true origin of the
good;
GI use in respect of accompanied by an expression such as “style”, “type”, “method”,
“manner”, “imitation”, or translations of such expressions, or a similar expression;
Other false or misleading indications as to the provenance, origin, nature or essential
qualities of the good appearing on packaging or wrapping, in advertising materials or
on documents concerning the good, as well as the packing of the product in a container
liable to convey a false impression as to its origin; and
Other practices likely to mislead the public as to the true origin of good.
Enforcement
The Indonesian trade mark system is generally understood to adopt the 'first-to-file' system. It
is especially important to register your trade mark in Indonesia because trademark piracy due
to ‘bad-faith’ registration is a serious problem. Bad-faith registrations exist where a third party
(not the legitimate owner of the mark) registers the mark first in Indonesia, thereby preventing
the legitimate owner from registering it. This is very common in the case of ‘well-known’
trademarks. In such a case however, you may be able to apply to the Indonesia courts to cancel
the unauthorised registration.
The Indonesian legal system presents many challenges to conducting IP enforcement. While
the IP laws in Indonesia are compliant with the Agreement on Trade-related Aspects of
Intellectual Property (TRIPs), these laws are not yet matched by an efficient criminal
enforcement or customs border protection system.
Registration as a GI49
The registration of GI products is executed by the Directorate
General of Intellectual Property Rights (DGIPR) of the Ministry
of Law and Human Rights. The DGIPR is supported by a
Geographical Indications Expert Team (GIAT) consisting of 7
members from the Ministry of Agriculture, the Ministry of Law
and Human Rights, the Ministry of Industry as well as the Ministry
of Sea and Fisheries. These are also responsible for the supervision
and administration.
A GI application cannot be enlisted if it contains indications as
follows:
- Contradicting with the morality of religion, and public order;
- Misleading the public as to the specific characteristic, quality, place of origin,
production process, and/or uses; and the name of a plant variety, which is protected by
“Establishment of Geographical Indication Protection System in Indonesia, Case in Coffee” available at:
http://www.wipo.int/edocs/mdocs/geoind/en/wipo_geo_sof_09/wipo_geo_sof_09_www_124275.pdf
49
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-
plant variety law, except that the name of the plant variety originated from the name of
a place or region; and/or
Has become generic name.
An applicant for GI protection may include any of the following:
- an institution that represents the people in the area, which produces the goods concerned
(consisting of parties that undertake business on goods of natural products or natural
resources, producers of agricultural products and people who make handicrafts or
industrial products);
- an institution that is given the authority to do so; and/or
- a group of consumers of the mentioned origin products.
An applicant can apply for GI protection by filling out a form or through his proxy at the
DGIPR. An application shall be filed in writing in the Bahasa Indonesia (Indonesian language)
then to be submitted to the DGIPR. The application shall contain the following information:
- The name and address of the applicant;
- The complete name and address of the proxy (if the application is filed through his
proxy);
- A special power of attorney (in case an application is filed through a proxy);
- The filing date of the application;
- A recommendation from the relevant government institution;
- The Book of Requirement (BoR); and
- Receipt of the application costs.
The BoR is an essential administrative document in obtaining GI protection. It should contain
the following information:
- The name of the GI that is filed for registration;
- The type of goods covered by the GI;
- The description of the specific characteristic and the quality which allows the objective
differentiation of the product from other products of the same category through
characteristics conferred to the product by its origin, with the description of the
geographical environment and with the inherent natural and/or human factor which
have an effect on quality or characteristic of the products;
- The boundaries and/or map of the area that is protected by the GI;
- A description of the history and tradition in relation to the using of GI to designate the
goods in that area including a description of the recognition by the relevant public of
the GI;
- A description of the production process explained in such a way so as to allow any
producer within the region to produce the given product on the basis of the information
given in the specification;
- A description of the method used to control the goods as well as measures taken to
ensure the traceability of a good; and
- The specific labeling details to be used relating to the GI.
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Figure 5: GI Registration Procedure in Indonesia50
It is important to note that both administrative and substantive examinations are undertaken.
Thereafter, there is a publication stage to allow third parties to oppose and applicants to rebut
the application, which may lead to a substantive re-examination.
The flow diagram above (Figure 9) outlines the main formalities in registering GI protection
under Indonesian Government Rule No. 51/2007.
Application Cost
The application costs for trademarks, which include GIs, as of August 2014, are as follows:51
a. Official fee: EUR 63 (converted from IDR 1,000,000). From 3 July, the official fee
for the specification of goods/services in each class will be calculated in sets of 10
items, with each set costing EUR 63. This will be regardless of the number (1-10) of
items in each set of 10 items.
b. Agent fee: EUR 150 – 600.
c. During the examination of a trade mark application, the authorities may reject the
application if the mark does not satisfy all criteria (i.e. it is too similar to an existing
trade mark etc.). Applicants may argue against such objections for a fee of between
EUR 200 to EUR 650.
Registration of foreign GIs in Indonesia
A foreign GI product can be registered in Indonesia when an application is made by producers
or operators holding legitimate interest or by the representative administrations or authorities
of the foreign country in Indonesia. To be admissible for registration a foreign GI product must
“Establishment of Geographical Indication Protection System in Indonesia, Case in Coffee” available at:
http://www.wipo.int/edocs/mdocs/geoind/en/wipo_geo_sof_09/wipo_geo_sof_09_www_124275.pdf
51
For additional resources to register trademarks and GIs in Indonesia, see: Southeast Asia IPR Helpdesk,
“Indonesia” available at: http://www.southeastasia-iprhelpdesk.eu/es/content/indonesia-factsheet.
50
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have been recognised and/or registered in accordance with the provisions of the country of
origin.
Competent authorities for GI protection
The Directorate General of Intellectual Property Rights
Ministry of Law and Human Rights
Administrative of the Directorate of Marks and Geographical
Indications
Jalan H. R. Rasuna Said, Kav 8-9,
Jakarta Selatan 12190, INDONESIA
Phone: +62 21 579 05619
http://www.dgip.go.id/
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Tastes of Europe Indonesia – Market Entry Handbook
3. MARKET SNAPSHOTS FOR SELECTED PRODUCTS
This section provides specific information for various food and beverage categories and products. This information includes a market snapshot
containing analysis of the market size, trends, distribution, and consumer profiles and sensitivities. Additional information regarding market entry,
import procedures, and considerations for intellectual property are also included.
Within the following category specific market snapshots products have been aggregated and analysed according to the Harmonised System (HS)
codes. For some product categories a single HS 4 entry will be covered whilst for others there will be multiple HS 4 categories across different HS
2 chapters. See Figure below for specific HS 4 codes covered in the following product category sections.
Table 2 Product Classification Table
Product Category
Wine and Vermouth
Spirits
Beer
Fresh and Processed Meat
HS 2 Chapters/ HS 4 Codes
2204 and 2205
2208
2203
0201,0202,0203,0204,0206,0207,0210,1601
and 1602
Olive Oil
1509 and 1510
Fresh Fruits and Vegetables
Processed Fruits and
Vegetables
Dairy Products
07 and 08
20
0401,0402,0403,0404,0405 and 0406
Description
Wine and aromatized wines
Spirits of an alcoholic strength of less than 80per cent
Beer made from malt
Fresh meat covers the meat and edible offal of beef,
pork, lamb and poultry; processed meat covers edible
meat or offal that has been salted, is in brine or is dried
or smoked, sausages and similar products of offal and
meat and other prepared or preserved meat or offal.
Olive Oil and its fractions and other oils produced from
olives.
All products under these chapter headings
All products under these chapter headings
Includes milk and cream not concentrated or sweetened,
milk and cream concentrated or sweetened, buttermilk
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Tastes of Europe Indonesia – Market Entry Handbook
and yoghurt, whey and natural milk products, butter,
cheese and curd.
Processed Cereals
1902 and 1904
Bread, Pastry, Cakes, Biscuits
and other bakery products
Chocolate and Derived
Products, and Confectionery
1905
Honey
1409
Gum Resins and Plant
Extracts
1301 and 1302
Cotton and Live Plants
52, 06
1806, 1704
Pasta and couscous, and breakfast cereals and cereal
bars
Products include bread, biscuits, wafers, cakes and
pastries
Chocolate and other food preparations containing cocoa,
Sugar confectionary (including white chocolate, not
containing cocoa
Includes natural honey
Includes gum resins, vegetable saps and extracts; pectic
substances, pectinates and pectates, agar-agar and other
mucilages and thickeners, whether or not modified,
derived from vegetable products.
Includes all forms of cotton, bulbs, live plants, cut
flowers and ornamental foliage
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Tastes of Europe Indonesia – Market Entry Handbook
3.1. Wine
Strengths
Opportunities
•Low domestic competition
•General awareness and
recognition of EU wines as
leaders in terms of product
quality
•High growth potential driven by
growing tourism and expatriate
communities
•Growing demand in Indonesia's
increasingly cosmopolitan key
markets
Wine Outlook
Weaknesses
Threats
•Relatively smaller market share
compared with other alcoholic
beverages
•Rates of wine consumption lower
among Indonesia's Muslim
majority
•Burdensome labeling and
domestic marketing requirements
•High tariffs of more than 90% on
EU imported wines
Consumption
The alcohol market in Indonesia is
heavily regulated, partly due to
several
legal
and
cultural
associations related to drinking
alcohol. However, whilst there is no
significant domestic wine supply in
Indonesia, there seems to be a
growing interest for wine, as local
consumers begin to integrate it into
their lifestyle. The consumption of
red and white wines is of equal
amount in general. Red wines are
favored more among consumers in
Jakarta and other Indonesian major
cities, while white wines are the preferred choice of consumers in the popular tourist resort of
Bali, which tend be mostly tourists. 52 Between 2005 and 2011, the consumption of wine in
Indonesia increased by an annual average of 25 percent. The year-to-year consumption is
estimated to increase by 20 percent.53
U.S. Department of Agriculture Foreign Agricultural Service, “Indonesia: Market Brief- Wine” GAIN Report,
November 2011, available at: https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20BriefWine_Jakarta_Indonesia_5-10-2011.pdf
53
Ibid
52
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Wine and spirits importers and their distributors expect that the tourism industry will continue
to expand over the next five years, leading to an increased demand for quality wines in
Indonesa’s market.54
Consumer Profiles
Even though, Indonesia has the world’s largest Muslim population where the consumption of
alcohol is generally forbidden, alcoholic beverages are consumed not only by upper-income
bracket local people but are also in high demand by expatriates and tourists.
In Indonesia, red and white wines are generally consumed in equal amounts.55 Red wines tend
to be favoured more among consumers in Jakarta and other Indonesian cities, while white wines
are the preferred choice of consumers in Bali, which tend be mostly tourists.
Consumer Trends
•
•
•
•
Rising disposable income has resulted in a preference for premium wine products in
Indonesian wine market.
Indonesian consumers have started to prefer wine over other alcoholic beverages for its
health-related benefits.
The growing interest in wines in Indonesia is influenced by globalisation and an
increasing foreign presence in the country, leading to the integration of some Western
elements into Indonesians’ urban lifestyles.
As a result of the expansion of tourism, hotels, restaurants and institutional sectors will
continue to increase their demand for wine.
Challenges for EU Producers
“Two Islamic parties have also proposed legislation to ban consumption of alcohol in the
country with the world’s largest Muslim population.”56 Offenders could get up to two years in
prison, should the proposals become law. If this legislation passes, this will extinguish the
alcoholic drink industry in Indonesia and, as such, EU exporters stand to lose tremendously.
Offer
Domestic Offer
The Indonesian wine market is expected to grow significantly in the coming years. Still wine
will sustain the largest market share, while sparkling wine will be the fastest growing category,
registering a compound annual growth rate (CAGR) of 10.4 percent between 2014 and 2019.
The use of stopper closure for wine is forecast to grow at a high CAGR of 5.4 percent till 2019,
led by its high usage in the sparkling wine category. There are around five wineries which
include Sababay Winery and Hatten Wines.
Imports
Indonesia imported approximately EUR 1 million of wines in 2010. By 2015, wine imports
amounted to approximately EUR 2 million. The main exporters of wine to Indonesia and their
respective market shares in 2015 were: Australia (25.9 percent), France (25.6 percent),
Singapore (18.1 percent), Italy (9.3 percent) and the United States of America (4.3 percent).
Ibid
U.S. Department of Agriculture, “Indonesia Market Brief - Wine”, GAIN Report, October 2011, available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf.
56
Reuters, “Indonesian alcohol market faces price headache after tariff hike” available at:
http://www.reuters.com/article/indonesia-alcohol-idUSL3N10I24V20150810
54
55
45
Tastes of Europe Indonesia – Market Entry Handbook
According to the table below, the EU has the largest market share for imported wines in the
Indonesian market. In 2015, wine exports from the EU accounted for 40 percent of the total
value of wine imports into Indonesia. Importantly, all of Indonesia’s imports of Vermouth in
2015 came from the EU. Over the period 2011-2015, EU exports of wine and vermouth to
Indonesia have increased steadily. In 2011, EU exports of wine were recorded at EUR 492,000,
but increased to EUR 695,000 in 2015. This represents a 29 percent increase in exports over
the period. In 2012, the EU recorded its highest level of exports to Indonesia – EUR 876, 000.
It is important to note that in 2011, the EU had a market share of 36 percent in the imported
wine industry in Indonesia. This increased to 40 percent by 2015. In the case of vermouth, EU
exports moved from EUR 8,000 in 2011 to EUR 34,000 in 2015.
The table below displays the EU countries from which wines and vermouth originated between
2011 and 2015. France was the dominant supplier for all the years under review, followed by
Italy and Portugal, respectively.
46
Tastes of Europe Indonesia – Market Entry Handbook
Figure 6: EU Export of Wines and Vermouth to Indonesia (in value), 2011-201557
Exports
Exports of wine from Indonesia increased from approximately EUR 3 million in 2010 to
approximately EUR 7 million in 2015. The main export destinations in 2015 and their
respective market shares were Singapore (32.7 percent), China (11.5 percent), Japan (11.1
percent), and Hong Kong (11.1 percent).58
900
800
700
600
500
Exports
400
300
200
100
0
2011
2012
2013
2014
2015
Figure 7: Indonesia's Wine Exports (in tonnes), 2011-201559
57
58
59
© Trade Map, International Trade Center, available at: http://www.trademap.org/
Ibid.
Ibid.
47
Tastes of Europe Indonesia – Market Entry Handbook
Local Competitors
One of the main local providers is Ultra Prima Abadi PT, also known as Orang Tua Group,
which produces a non-grape herbal fruit wine. This wine is more traditional and mostly
consumed during important festivities, for example at Christmas or Easter. They carry a range
of traditional wines such as:
- Orang Tua Premium Herbal Wine;
- Orang Tua Beras & Kencur Traditional;
- Orang Tua Malaga Wine; and
- Orang Tua Kolesom Herbal Wine.
One of the main producers
of wine in Indonesia is
Hatten Wines. Bali based
producer Hatten Wines
planted the first vines in
1994. After years of
testing,
the
tough
Alphonse LaVallee grape
proved able to survive the
tropical conditions and
was successfully grown
and harvested. Production
is still in its infancy on a
global
scale
of
production, but the seeds
of a potential new latitude
market are clear. The
Hatten Wines owns the
biggest domestic market
share in Indonesia.
Specific Customs and SPS Requirements
Importer Registration
The Ministry of Trade regulations (MOT 20/2014) requires duty-paid alcoholic beverage
importers to be “registered importers of alcoholic beverages” (IT-MB). IT-MBs are issued by
MOT’s Directorate General of Foreign Trade. Some major requirements necessary to obtain
an IT-MB include:60
• The importer must have three years’ experience as an alcoholic beverages distributor;
• The importer must provide letters from at least 20 manufacturing companies,
originating from at least five countries, which attest that the importer is an official
distributor of their brand and that the importer is able to purchase a minimum of 3000
cartons per brand per year;
• The importer must provide a letter from the manufacturing company granting
permission to the importer to assign a distributor in Indonesia. The letter must be
U.S. Department of Agriculture, “New Regulations on Alcoholic Beverage Distribution”, GAIN Report, June
2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
60
48
Tastes of Europe Indonesia – Market Entry Handbook
“legalised” by the Indonesian commercial/economic attaché in the country of origin;
and
The importer must have distribution agreements with alcoholic beverage distributors in
at least six of Indonesia’s provinces. The IT-MB is valid for three years and can be
extended. Indonesia’s state-owned company is appointed by the Minister to import
duty-free alcoholic beverages.
Quota
Indonesia applies quantitative import limits to imported wines and distilled spirits. The
Ministry of Trade determines the national demand for the type and the number of alcoholic
beverages to be consumed annually in Indonesia and allocates a quantity for import based on
this estimate. The determination is made annually on April 1. Importers (IT-MB holders) must
also apply to MOT for an import permit. The application should be made fifteen days prior
April 1 every year. Importers are required to import at least 80 percent of the import allocation
listed in their import permit. As of 2010, each importer is able to import most brands, although
some brands remain exclusive to certain importers.61 In 2010, the breakdown of the total import
quota was about 70 percent wine, 10 percent spirits, and 20 percent beer.
Product Registration
As per BPOM regulations, all imported, duty-paid wine, spirits, and beer must receive a
product registration (ML) number. In order to obtain the ML registration number for each SKU
(Stock Keeping Unit), the importer must submit complete documentations to BPOM prior to
importation of alcoholic beverages, requiring the following documentation.62
1. Letter of Appointment from the plant of origin (the original letter must be shown with the
copy attached);
2. Health Certificate or Certificate of Free Sale from the competent authority in the country
of origin (the original letter must be shown with the copy attached);
3. The results of laboratory analysis (original) associated with products such as nutrients
(nutrition claims), a substance that is claimed in accordance with the label, chemical tests,
microbiological contamination and metal contamination. The analysis is valid 6 months
from the date of testing;
4. The design of the label that will be distributed in accordance with and sample products; and
5. A completed application form.
Labelling
Alcoholic beverages must have [“MINUMAN BERALKOHOL”, DIBAWAH UMUR 21
TAHUN ATAU WANITA HAMIL DILARANG MINUM] (Prohibited for use by people
under 21 years or pregnant women) on the label.
Challenges for EU Producers
The tariffs applied by the Indonesian government on alcoholic beverages are very high. Tariffs
applied on wine are 90 percent of the market price. “Retail prices for imported wine and spirits
will now rise further, in a range from 15 percent to more than 100 percent, the association’s
Borman [a board member at the International Spirit and Wine Association interviewed by
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
62
Ibid.
61
49
Tastes of Europe Indonesia – Market Entry Handbook
Reuters] said. “Such high prices for imported brands might give incentive for some actors to
fill in the gap by producing fake liquor at very cheap prices,” he said”.63
Distribution
In order to successfully enter the Indonesian market, it is highly recommended, and in some
cases mandatory for alcoholic beverages, to find a local partner either as importer or as
distributor. They will help with the local procedures and the registration and certification with
the Agency for Drug and Food Control (BPOM).
Before 2007, only state-owned enterprises could import wine and alcoholic beverages.64 But
since April 2010, strict government controls have relaxed, giving way to private official
distributors to import directly any duty-paid wine and alcoholic beverage, within a mandated
quota. Alcoholic beverage distribution is only allowed for designated distributors, subdistributors, and retailers. This applies for both imported and domestic products.
Alcoholic beverage sales are only allowed for consumers that are 21 years of age or older in
the following locations:65
• on-site consumption: hotels, restaurants, bars and other places designated by local
government
• retail: duty-free shops, and other places designated by local government
Estimates show that the Horeca sector accounts for 90 percent of total sales of alcoholic drinks,
with retail outlets accounting for the remaining 10 percent.66
Starting mid-April 2015, regulations passed by the Ministry of Trade (MOT 6/2015) prevent
category A alcoholic beverages with an alcohol content of less than five percent from sale in
minimarkets. Category A beverages are still allowed to be sold in supermarkets and
hypermarkets. These beverages include beer, low-alcohol wine, and shandy. Previously, such
restrictions were applied mostly to alcoholic beverages with over five percent of alcohol.
Distribution and sale of category B and C alcoholic beverages are limited to companies that
have an alcoholic beverages trade business license (SIUP-MB). This license is also valid for
distributing and selling category A alcoholic beverages. Businesses selling category A products
must have an SKP-A permit letter (for supermarkets, and hypermarkets) or an SKPL-A (for
hotels, restaurants, and bars). SIUP-MB, SKP-A, and SKPL-A are valid for three years and can
be extended.67 Importers (IT-MB holders) are required to report their import and distribution
realisation every three months.
Eveline Danubrata and Klara Virencia, “Indonesian alcohol market faces price headache after tariff hike”,
Reuters, August 2015, available at: http://www.reuters.com/article/indonesia-alcoholidUSL3N10I24V20150810
64
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf.
65
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
66
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
67
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
63
50
Tastes of Europe Indonesia – Market Entry Handbook
Geography and Major Markets
Wine consumption is only permitted in licensed four and five-star hotels, upscale restaurants,
bars, pubs, and night clubs. Duty free alcoholic beverages can only be sold through the
appointed shops located in some Jakarta neighborhoods and international airports.68
Approximately 80 percent of imported alcoholic beverages are distributed to Jakarta and Bali.
The remaining 20 percent goes to other major urban centres like Medan, Surabaya, and
Bandung. Currently, there are three areas where selling alcoholic beverages is restricted:
Bandung, Banten and Depok.69
The ports of entry for imported duty-paid alcoholic beverages include Belawan sea port, Medan;
Tanjung Priok sea port, Jakarta; Tanjung Emas sea port, Semarang; Tanjung Perak sea port,
Surabaya; Bitung sea port, Manado; and Soekarno Hatta sea port, Makassar. Duty-paid
alcoholic beverage can also enter the country via all Indonesian international airports.70
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
69
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf.
70
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
68
51
Tastes of Europe Indonesia – Market Entry Handbook
Challenges to EU Producers
Alcoholic beverage advertisement is prohibited in all media in Indonesia. As a result of this,
EU producers may find it difficult to promote their products in the Indonesian market.
52
Tastes of Europe Indonesia – Market Entry Handbook
3.2 Spirits
Strengths
Opportunities
•Low existing levels of domestic
competition
•General awareness and recognition of
EU spirits as leaders in terms of
product quality, as well as status
symbol
•Well-suited to meet high growth
potential driven by growing tourism
and expatriate communities, as well
as young consumer segments
•Growing demand in Indonesia's
increasingly cosmopolitan key
markets
Spirits Outlook
Weaknesses
Threats
•Relatively smaller market share
compared with other alcoholic
beverages, with higher niche dynamic
•Rates of spirits consumption lower
among Indonesia's Muslim majority
•Burdensome labeling and domestic
marketing requirements, in addition
to political risks from islamic parties
•High tariffs of more than 90% on EU
imported wines
Consumption
Despite
the
challenging
business environment which
exists in Indonesia in the
spirits industry, international
players posted a strong
performance in 2015. The
demand for premium brands,
including those from the EU, is
increasing, especially in ontrade channels. In recent times,
Indonesians consumers have
gradually been making a shift
from domestic to international
spirits brands. For spirits, the
import tariff is now set at 150
percent of the market price.71
Since 2004, Indonesia’s public statistical agency has ceased to collect data on household
expenditure on and consumption of alcoholic beverages. The trend is widely believed to be
growing, however. The World Health Organisation collects detailed information on alcohol
consumption in Indonesia, available here.
71
© Source: Euromonitor International, “Alcoholic Drinks in Indonesia”, 2015
53
Tastes of Europe Indonesia – Market Entry Handbook
Consumer Profiles
Even though, Indonesia has the world’s largest Muslim population where the consumption of
alcohol is generally forbidden, alcoholic beverages are consumed not only by upper-income
bracket local people but are also in high demand by expatriates and tourists. Men are more
likely to consume alcoholic beverages in Indonesia than women and consume in greater volume
per capita. Emerging cosmopolitan markets in Jakarta and Surabaya increasingly drive the
import and consumption of alcoholic beverages in Indonesia.
Consumer Trends
In recent times, due to shifts in consumer preferences towards more premium brands,
international brands benefited from sales restrictions in off-trade channels, which led many
consumers to switch to on-trade channels. Other major growth drivers include the growing
population of millennials, increasing acceptance of social drinking and the increasing number
of on-trade establishments that offer alcoholic drinks as part of their menu.
Challenges for EU Producers
The alcohol market in Indonesia is heavily regulated, partly due to several legal and cultural
associations related to drinking alcohol. “Two Islamic parties have also proposed legislation
to ban consumption of alcohol in the country with the world’s largest Muslim population “.72
If this legislation passes, this will extinguish the alcoholic drink industry in Indonesia and, as
such, EU exporters stand to lose tremendously.
The business environment for spirits in Indonesia remains challenging. While the Indonesian
Government is eager to curb the black market and the consumption of bootleg drinks (known
as oplosan), it is also keen to earn higher revenue from alcoholic drinks. 73 As a result, it is
likely that the government will increase import tariffs and/or excise duty in the future, while
tightening customs enforcement and monitoring of alcoholic drinks distribution at the same
time. Both measures, however, are likely to negatively impact legal spirits.
For spirits, the import tariff is now set at 150 percent of the market price. Meanwhile, under
the previous regulation, the amount of import tariffs payable was based on volume and was set
at IDR 125,000 (EUR 8.6) per litre. Not only did the new taxation scheme cause a steep increase
in prices of spirits in 2015, it also encouraged more illicit trade of spirits in the country.74
The increase in import tariffs and/or excise duties is likely to encourage black market sales, as
the potential profit margin for illicit trade is higher. At the same time, tighter customs
enforcement and monitoring of alcoholic drinks distribution are unlikely to help with the
situation. As observed in 2015, more restricted distribution damaged the sales of domestic
spirits, while tighter customs enforcement tends to impede the spirits supply chain in the
country. As of late 2015, there was an ongoing discussion between the Directorate General of
Customs and Excise and trade associations on a plan to restore the import tariff scheme to
volumetric base. However, as of April 2016, regulatory changes had yet to be observed.
Reuters, “Indonesian alcohol market faces price headache after tariff hike” available at:
http://www.reuters.com/article/indonesia-alcohol-idUSL3N10I24V20150810
73
© Source: Euromonitor International, “Spirits in Indonesia”,2015
74
© Ibid
72
54
Tastes of Europe Indonesia – Market Entry Handbook
Offer
Domestic Offer
Foreign companies which sell alcohol in Indonesia are Diageo, Pernod Ricard, Remy Cointreau
and Bacardi. PT Multi Bintang is the largest domestic brewery of Indonesia. Market experts
have predicted that because of various regulations that are put in place to deter consumption of
alcohol, overall sales volumes are likely to decline in the near-term future.
Imports
International brands in spirits enjoyed stellar growth in 2015 because of their strong brand
presence in restaurants, bars, and clubs in 2015.75 According to statistics retrieved from the
International Trade Centre, imports of spirits into the Indonesian market moved from
approximately EUR 4 million in 2010 to approximately EUR 7 million in 2015. Indonesian
imports of spirits in 2015 were recorded at 767 tonnes. The main countries from which
Indonesia imported spirits in 2015 and their respective market shares were: The United
Kingdom (38 percent), Singapore (21 percent), France (17 percent), and the United States of
America (8 percent). Overall, the EU’s market share in 2015 was approximately 63 percent of
Indonesia’s overall inward trade in spirits.76
3500
3000
2010
2500
€'000
2011
2000
2012
1500
2013
1000
2014
500
2015
0
United France
Kingdom
Ireland
Sweden
Figure 8: Indonesian Spirits Imports from the EU, 2010-2015.77
Exports
According to statistics retrieved from the International Trade Centre, Indonesian exports of
spirits rose from approximately EUR 172,000 in 2010 to EUR 632, 000 in 2015. Importantly,
in 2013, exports were the highest and amounted to approximately EUR 1 million. The major
export destinations for Indonesian exports of spirits in 2015 and their respective market shares
were: The Netherlands (63.8 percent), Singapore (24.1 percent), Vietnam (6.6 percent), and
Cambodia (4.6 percent).78
75
76
77
78
Ibid.
© Trade Map, International Trade Center, available at: http://www.trademap.org/
© Trade Map, International Trade Center, available at: http://www.trademap.org/
Ibid.
55
Tastes of Europe Indonesia – Market Entry Handbook
300
250
200
150
100
50
0
2011
2012
2013
2014
2015
Export
Figure 9: Indonesia's Export of Spirits (in tonnes), 2011-2015.79
Local Competitors
Sumber Sari Mekar Perkasa PT continued to lead the spirits market with an 18 percent total
volume share in 2015, due to the popularity of its flagship brands, Topi Miring and Asoka,
among local consumers.80 The low-price positioning of its brands also attracts a large consumer
base in Indonesia, especially those from the lower-to-middle income demographics. However,
as with other domestic spirits manufacturers, such as Perindustrian Bapak Djenggot PT and
Semak Industri PT, the company’s total volume shares steadily declined over the review period.
This was mainly due to increased restrictions on retail distribution of alcoholic drinks, as well
as consumers’ shift towards international spirits brands.
Specific Customs and SPS Requirements
Importer Registration
The Ministry of Trade regulations (MOT 20/2014) requires duty-paid alcoholic beverage
importers to be “registered importers of alcoholic beverages” (IT-MB). IT-MBs are issued by
MOT’s Directorate General of Foreign Trade. Some major requirements necessary to obtain
an IT-MB, outlined in MOT 20/2014, include:81
•
•
•
•
The importer must have three years’ experience as an alcoholic beverages distributor;
The importer must provide letters from at least 20 manufacturing companies,
originating from at least five countries, which attest that the importer is an official
distributor of their brand and that the importer is able to purchase a minimum of 3,000
cartons per brand per year;
The importer must provide a letter from the manufacturing company granting
permission to the importer to assign a distributor in Indonesia. The letter must be
“legalised” by the Indonesian commercial/economic attaché in the country of origin;
and
The importer must have distribution agreements with alcoholic beverage distributors in
at least six of Indonesia’s provinces. The IT-MB is valid for three years and can be
Ibid.
© Source: Euromonitor International, “Spirits in Indonesia”, 2015
81
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
79
80
56
Tastes of Europe Indonesia – Market Entry Handbook
extended. Indonesia’s state-owned company is appointed by the Minister to import
duty-free alcoholic beverages.
Quota
Indonesia applies quantitative import limits to imported wines and distilled spirits. The
Ministry of Trade determines the national demand for the type and number of alcoholic
beverages to be consumed annually in Indonesia and allocates a quantity for import based on
this estimate. The determination is made annually on April 1. Importers (IT-MB holders) must
also apply to MOT for an import permit. The application should be made fifteen days prior
April 1 every year. Importers are required to import at least 80 percent of the import allocation
listed in their import permit. As of 2010, each importer can import most brands, although some
brands remain exclusive to certain importers. In 2010, the breakdown of the total import quota
was about 70 percent wine, 10 percent spirits, and 20 percent beer.82
Product Registration
As per BPOM regulations, all imported, duty-paid wine, spirits, and beer must receive a
product registration (ML) number. To obtain the ML registration number for each SKU (Stock
Keeping Unit), the importer must submit complete documentations to BPOM prior to
importation of alcoholic beverages.83
The minimum requirements for product registration (ML) include:
1. Letter of Appointment from plant of origin (the original letter must be shown with
the copy attached);
2. Health Certificate or Certificate of Free Sale from the competent authority in the
country of origin (the original letter must be shown with the copy attached);
3. The results of laboratory analysis (original) associated with products such as nutrients
(nutrition claims), a substance that is claimed in accordance with the label, chemical
test, microbiological contamination and metal contamination. The analysis is valid
6 months from the date of testing;
4. The design of the label that will be distributed in accordance with and sample
products; and
5. A completed application form.
Product-Specific Labelling
Alcoholic beverages must have “MINUMAN BERALKOHOL”, DIBAWAH UMUR 21
TAHUN ATAU WANITA HAMIL DILARANG MINUM (Prohibited for use by people
under 21 years or pregnant women) on the label.
Challenges for EU Producers
The tariffs applied by the Indonesian Government on alcoholic beverages are very high. Tariffs
applied on spirits are 150 percent of the market price. “Retail prices for imported wine and
spirits will now rise further, in a range from 15 percent to more than 100 percent, the
association’s Borman [a board member at the International Spirit and Wine Association
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
83
Ibid.
82
57
Tastes of Europe Indonesia – Market Entry Handbook
interviewed by Reuters] said. “Such high prices for imported brands might give incentive for
some actors to fill in the gap by producing fake liquor at very cheap prices,” he said”84
Distribution
To successfully enter the Indonesian market, it is highly recommended, and in some cases
mandatory for alcoholic beverages, to find a local partner either as importer or as distributor.
They will help with the local procedures and the registration and certification with the Agency
for Drug and Food Control (BPOM).
Before 2007, only state-owned enterprises were allowed to import wine and alcoholic
beverages. 85 But since April 2010, strict government controls have relaxed, giving way to
private official distributors to import directly any duty-paid wine and alcoholic beverages,
within a mandated quota. Alcoholic beverage distribution is only allowed for designated
distributors, sub-distributors, and retailers. This applies for both imported and domestic
products.
Alcoholic beverage sales are only allowed for consumers that are 21 years of age or older in
the following locations:86
• on-site consumption: hotels, restaurants, bars and other places designated by local
government
• retail: duty-free shops, and other places designated by local government
Estimates show that the Horeca sector accounts for 90 percent of total sales of alcoholic drinks,
with retail outlets accounting for the remaining 10 percent.87
Distribution and sale of spirits are limited to companies that have an alcoholic beverages trade
business license (SIUP-MB). This license is also valid for distributing and selling category A
alcoholic beverages. Businesses selling category A products must have an SKP-A permit letter
(for supermarkets, and hypermarkets) or an SKPL-A (for hotels, restaurants, and bars). SIUPMB, SKP-A, and SKPL-A are valid for three years and can be extended.88 Importers (IT-MB
holders) are required to report their import and distribution realisation every three months.
Eveline Danubrata and Klara Virencia, “Indonesian alcohol market faces price headache after tariff hike”,
Reuters, August 2015, available at: http://www.reuters.com/article/indonesia-alcoholidUSL3N10I24V20150810
85
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
86
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
87
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
88
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
84
58
Tastes of Europe Indonesia – Market Entry Handbook
Geography and Major Markets
Spirits consumption is only permitted in licensed four and five-star hotels, upscale restaurants,
bars, pubs, and night clubs. Duty free alcoholic beverages can only be sold through the
appointed shops located in some Jakarta neighborhoods and international airports.89
Approximately 80 percent of imported alcoholic beverages are distributed to Jakarta and Bali.
The remaining 20 percent goes to other major urban centres like Medan, Surabaya, and
Bandung. Currently, there are three areas where selling alcoholic beverages is restricted:
Bandung, Banten and Depok.
The ports of entry for imported duty-paid alcoholic beverages include Belawan sea port, Medan;
Tanjung Priok sea port, Jakarta; Tanjung Emas sea port, Semarang; Tanjung Perak sea port,
Surabaya; Bitung sea port, Manado; and Soekarno Hatta sea port, Makassar. Duty-paid
alcoholic beverage can also enter the country via all Indonesian international airports.90
Challenges to EU Producers
Alcoholic beverage advertisement is prohibited in all media in Indonesia. Because of this, EU
producers may find it difficult to promote their products in the Indonesian market.
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
90
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
89
59
Tastes of Europe Indonesia – Market Entry Handbook
3.3 Beer
Strengths
Opportunities
•Indonesia is the largest existing
market for beer consumption in
Southeast Asia
•General awareness and recognition of
EU beers as leaders in terms of
product quality, as well as status
symbol
•Well-suited to meet high growth
potential driven by growing tourism
and expatriate communities, as well
as through alcohol-free products
•Growing demand in Indonesia's
increasingly cosmopolitan key
markets
Beer Outlook
Weaknesses
Threats
•Relatively smaller market share
compared with other alcoholic
beverages, with higher niche dynamic
•Rates of spirits consumption lower
among Indonesia's Muslim majority
•Burdensome labeling and domestic
marketing requirements, in addition
to political risks from islamic parties
•High tariffs of more than 90% on EU
imported wines
Consumption
Asia in general and
Vietnam in particular are
excellent markets for
European beer producers.
According to Investvine
“Asia overtook Europe
and the Americas in beer
consumption already in
2007. In 2011, the
continent drank 67 billion
liters of beer, against 57
billion in the Americas
and 51 billion in Europe.
The top beer-drinking
nation in ASEAN is
Vietnam. Vietnamese drinkers downed 2.6 billion liters of beer in 2011, followed by Thailand
with 1.8 billion liters and the Philippines with 1.6 billion liters, nearly double the total amount
of beer consumed in Indonesia (236.4 million liters), Malaysia (171.4 million), Cambodia
(136.3 million), Laos (134.3 million), Singapore (108.2 million) and Myanmar (30.4
million).”91
Arno Maierbrugger, “Beer in Southeast Asia: A Matter of Taste”, Investvine, March 2016 available at:
http://investvine.com/beer-in-southeast-asia-a-matter-of-taste/
91
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Tastes of Europe Indonesia – Market Entry Handbook
Indonesia is one of the largest markets in Asia for consumption of alcoholic beverages, with
the overall trend expected to increase in-line with levels of disposable income and Indonesia’s
increasing integration with international markets. Beer is the most widely consumed alcoholic
beverage in Indonesia, with a prevalence of both domestic and foreign products.
Consumer Trends
“The main reason why Southeast Asia’s citizen are gulping more booze is the growth in the
number of young people with higher disposable income in recent years”.92 A correlation can be
established between the consumption of beer and economic dynamics, let alone Western
influence as expressed through the growing number of tourists, Western-style restaurants and
international beer brands. This results in Southeast Asian consumers turn away from their
traditional distillates, either rice whiskey in Thailand, or arrack in Indonesia. Other major
growth drivers include the growing population of millennials, increasing acceptance of social
drinking and the increasing number of on-trade establishments that offer alcoholic drinks as
part of their menu. “Public drinking is technically forbidden in Indonesia, the world’s most
populous Muslim-majority country, but in practice enforcement is often spotty”.93
Consumer Profiles
There is a negative attitude towards alcohol in Indonesia as consumption of intoxicants
(including alcohol) is generally forbidden (haram) in Islam. However, as millions of nominal
Muslims (who do not follow Islamic principles strictly) live in Indonesia, beer consumption
has recently risen, especially in the urban regions where it has become part of the lifestyle.94
Challenges for EU Producers
The alcohol market in Indonesia is heavily regulated, partly due to several legal and cultural
associations related to drinking alcohol. “Two Islamic parties have also proposed legislation
to ban consumption of alcohol in the country with the world’s largest Muslim population.” 95
Offenders could get up to two years in prison, should the proposals become law.
Offer
Domestic Offer
Total volume sales of beer witnessed a drastic decline of 13 percent in 2015, after the Ministry
of Trade’s regulation Permendag No. 06/M-DAG/PER/1/2015 was passed into law in January
2015.96 This regulation essentially banned category A alcoholic drinks, including beer, from
sale in convenience stores, independent small grocers and other grocery retailers. The
government implemented the ban to “protect the morals and culture of Indonesian society”, as
Ibid.
Prashanth Parameswaran, “Indonesia wages war on alcohol”, The Diplomat, February 2015 available at:
http://thediplomat.com/2015/02/indonesia-wages-war-on-alcohol/
94
© Indonesia, Investments, “Alcohol-free beer in Indonesia: Strategy to comply with rules” available at:
http://www.indonesia-investments.com/news/todays-headlines/alcohol-free-beer-in-indonesia-strategy-tocomply-with-rules/item6342)
95
Reuters, “Indonesian alcohol market faces price headache after tariff hike”, August 2015 available at:
https://www.reuters.com/article/indonesia-alcohol/indonesian-alcohol-market-faces-price-headache-aftertariff-hike-idUSL3N10I24V20150810
96
© Source: Euromonitor International, “Spirits in Indonesia”, 2015
92
93
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Tastes of Europe Indonesia – Market Entry Handbook
the high number of minimarkets and
kiosks in the country made it easy for
schoolchildren or students to buy lightalcoholic beverages (such as beer and
breezers).97
After a tumultuous start to 2015, beer
began to stabilise in the last quarter of
2015 and total volume sales are expected
to grow by a CAGR of 6 percent in the
coming years. Many key players are now
concentrating on establishing a strong
foothold in on-trade establishments.98
Owing to the new government regulations,
key players have moved to introduce non/low alcohol beer in the Indonesia market.
By launching new products, it is
anticipated that they will attract more
consumers and help offset the impact of
the restricted distribution. Multi Bintang
introduced Bintang Radler Grapefruit in
2015 and Bintang Radler Lemon 0.0% in
February 2016, becoming the pioneer of
flavoured non/low alcohol beer in Indonesia.99 As a result, consumers remain engaged and tend
to stay loyal to the company’s product portfolio.
Introduction of Alcohol-Free Beer 100 : The British multinational alcoholic beverages firm
Diageo plc has introduced alcohol-free Guinness to the country. The company is also
considering building a factory on the island of Bali.
The new beverage is the main strategy of the company to boost its sales in Indonesia after the
ban on mini-markets has been imposed. Despite this, the company – that claims to control
around 15 percent of Indonesia’s beer market - has made it clear that it was planning to
introduce Guinness Zero to the Indonesian market already before.
As after implementation of the ban, the company’s sales in Indonesia fell by 40 percent, Diageo
now hopes to see its alcohol-free products back in the minimarkets and kiosks of Indonesia.
Imports
Beer imports into the Indonesian market moved from approximately EUR 258,000 in 2010 to
approximately EUR 277,000 in 2015. Importantly, imports reached an all-time high in 2014
at EUR 509,000. Indonesian beer imports in 2015 were recorded at 120 tonnes. The main
© Indonesia Investments, “Alcohol-Free Beer in Indonesia: Strategy to comply with Rules” available at:
http://www.indonesia-investments.com/news/todays-headlines/alcohol-free-beer-in-indonesia-strategy-tocomply-with-rules/item6342
98
© Source: Euromonitor International, “Spirits in Indonesia”, 2015
99
Ibid.
100
©Indonesia Investments, “Alcohol-Free Beer in Indonesia: Strategy to comply with Rules” available at:
http://www.indonesia-investments.com/news/todays-headlines/alcohol-free-beer-in-indonesia-strategy-tocomply-with-rules/item6342
97
62
Tastes of Europe Indonesia – Market Entry Handbook
countries from which Indonesia imported beer in 2015 and their respective market shares were:
Singapore (41.4 percent), Australia (29.3 percent), Italy (17.6 percent), Hong Kong (6.5
percent), and Belgium (2.9 percent). Overall, the EU’s market share in 2015 was approximately
21.5 percent. Italy exported beer worth EUR 49,000 to Indonesia, while Belgium and the
United Kingdom exported EUR 8,000 and EUR 2,000, respectively.101
600
EUR '000s
500
400
300
Imports
200
100
0
2010
2011
2012
2013
2014
2015
Figure 10: Indonesia’s Beer Imports, 2011-2015.102
Exports
Indonesian exports of beer rose from approximately EUR 2 million in 2010 to an all-time high
of EUR 12 million in 2015. The major export destinations for Indonesian exports of beer in
2015 and their respective market shares were: Timor Leste (51.7 percent), Thailand (27.8
percent), Malaysia (8.8 percent) and Australia (4.8 percent).103
14000
12000
10000
8000
6000
4000
2000
0
2011
2012
2013
Export
2014
2015
Figure 11: Indonesia’s Beer exports (in tonnes), 2011-2015.104
101
102
103
104
© Trade Map, International Trade Center, available at: http://www.trademap.org/.
Ibid.
Ibid.
© Trade Map, International Trade Center, available at: http://www.trademap.org/
63
Tastes of Europe Indonesia – Market Entry Handbook
Local Competitors
The two main players on the beer market are Multi Bintang Indonesia and Delta Djakarta Tbk.
Multi Bintang continued to lead the beer market with a total volume share of 64 percent in
2015.105 Despite receiving a severe blow from the latest Ministry of Trade’s regulation, the
company’s performance was buoyed by its wide product portfolio. Due to the established
presence of Bintang Zero in non/low alcohol beer prior to 2015, the company could quickly
shift its focus to the brand when there were unfavourable regulatory changes affecting its lager
and stout portfolio. In addition, the company greatly benefits from it top-of-the-mind
positioning and huge loyal consumer base of Bir Bintang in Indonesia, as well as its excellent
distribution network throughout the country. Multi Bintang also remains committed to product
innovation amidst a challenging volume environment.
Specific Customs and SPS Requirements
Importer Registration
The Ministry of Trade regulations (MOT 20/2014) requires duty-paid alcoholic beverage
importers to be “registered importers of alcoholic beverages” (IT-MB). IT-MBs are issued by
MOT’s Directorate General of Foreign Trade. Some major requirements necessary to obtain
an IT-MB, outlined in MOT 20/2014, include:106
•
•
The importer must have three years’ experience as an alcoholic beverages distributor;
The importer must provide letters from at least 20 manufacturing companies,
originating from at least five countries, which attest that the importer is an official
© Source: Euromonitor International, “Spirits in Indonesia”, 2015
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
105
106
64
Tastes of Europe Indonesia – Market Entry Handbook
•
•
distributor of their brand and that the importer is able to purchase a minimum of 3,000
cartons per brand per year;
The importer must provide a letter from the manufacturing company granting
permission to the importer to assign a distributor in Indonesia. The letter must be
“legalised” by the Indonesian commercial/economic attaché in the country of origin;
and
The importer must have distribution agreements with alcoholic beverage distributors in
at least six of Indonesia’s provinces. The IT-MB is valid for three years and can be
extended. Indonesia’s state-owned company is appointed by the Minister to import
duty-free alcoholic beverages.
Quota
Indonesia applies quantitative import limits to imported wines and distilled spirits. The
Ministry of Trade determines the national demand for the type and number of alcoholic
beverages to be consumed annually in Indonesia and allocates a quantity for import based on
this estimate. The determination is made annually on April 1. Importers (IT-MB holders) must
also apply to MOT for an import permit. The application should be made fifteen days prior
April 1 every year. Importers are required to import at least 80 percent of the import allocation
listed in their import permit. As of 2010, each importer can import most brands, although some
brands remain exclusive to certain importers. 107 In 2010, the breakdown of the total import
quota was about 70 percent wine, 10 percent spirits, and 20 percent beer.
Product Registration
As per BPOM regulations, all imported, duty-paid wine, spirits, and beer must receive a
product registration (ML) number. To obtain the ML registration number for each SKU (Stock
Keeping Unit), the importer must submit complete documentations to BPOM prior to
importation of alcoholic beverages.108
The minimum requirements for product registration (ML) include:
1. Letter of Appointment from plant of origin (the original letter must be shown with
the copy attached);
2. Health Certificate or Certificate of Free Sale from the competent authority in the
country of origin (the original letter must be shown with the copy attached);
3. The results of laboratory analysis (original) associated with products such as nutrients
(nutrition claims), a substance that is claimed in accordance with the label, chemical
test, microbiological contamination and metal contamination. The analysis is valid
6 months from the date of testing;
4. The design of the label that will be distributed in accordance with and sample
products; and
5. A completed application form.
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
108
Ibid
107
65
Tastes of Europe Indonesia – Market Entry Handbook
Labelling
Alcoholic beverages must have “MINUMAN BERALKOHOL”, DIBAWAH UMUR 21
TAHUN ATAU WANITA HAMIL DILARANG MINUM (Prohibited for use by people
under 21 years or pregnant women) on the label.
Distribution
To successfully enter the Indonesian market, it is highly recommended, and in some cases
mandatory for alcoholic beverages, to find a local partner either as importer or as distributor.
They will help with the local procedures and the registration and certification with the Agency
for Drug and Food Control (BPOM).
Before 2007, only state-owned enterprises could import
wine and alcoholic beverages. 109 But since April 2010,
strict government controls have relaxed, giving way to
private official distributors to import directly any duty-paid
wine and alcoholic beverages, within a mandated quota.
Alcoholic beverage distribution is only allowed for
designated distributors, sub-distributors, and retailers. This
applies for both imported and domestic products.
Alcoholic beverage sales are only allowed for consumers
that are 21 years of age or older in the following
locations:110
• on-site consumption: hotels, restaurants, bars and
other places designated by local government
• retail: duty-free shops, and other places designated
by local government
Estimates show that the Horeca sector accounts for 90
percent of total sales of alcoholic drinks, with retail outlets
accounting for the remaining 10 percent.111
Starting mid-April 2015, regulations passed by the Ministry
of Trade (MOT 6/2015) prevent category A alcoholic beverages with an alcohol content of less
than five percent from sale in minimarkets. Category A beverages are still allowed to be sold
in supermarkets and hypermarkets. These beverages include beer, low-alcohol wine, and
shandy. Previously, such restrictions were applied mostly to alcoholic beverages with over five
percent of alcohol.
Distribution and sale of category B and C alcoholic beverages are limited to companies that
have an alcoholic beverages trade business license (SIUP-MB). This license is also valid for
distributing and selling category A alcoholic beverages. Businesses selling category A products
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
110
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
111
U.S. Department of Agriculture, “Indonesia: Market Brief - Wine”, GAIN Report, October 2011 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Market%20Brief-Wine_Jakarta_Indonesia_5-102011.pdf
109
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Tastes of Europe Indonesia – Market Entry Handbook
must have an SKP-A permit letter (for supermarkets, and hypermarkets) or an SKPL-A (for
hotels, restaurants, and bars). SIUP-MB, SKP-A, and SKPL-A are valid for three years and can
be extended.112 Importers (IT-MB holders) are required to report their import and distribution
realisation every three months.
Although it is still allowed to sell alcoholic drinks in the larger supermarkets, restaurants, cafes
and hotels, sales of beer have plunged as the beverage was banned in the (estimated) 70,000
minimarkets that are the favourite shopping spot for urbanized Indonesia.113
Geography and Major Markets
Approximately 80 percent of imported alcoholic beverages are distributed to Jakarta and Bali.
The remaining 20 percent goes to other major urban centres like Medan, Surabaya, and
Bandung. Currently, there are three areas where selling alcoholic beverages is restricted:
Bandung, Banten and Depok.114
The ports of entry for imported duty-paid alcoholic beverages include Belawan sea port, Medan;
Tanjung Priok sea port, Jakarta; Tanjung Emas sea port, Semarang; Tanjung Perak sea port,
Surabaya; Bitung sea port, Manado; and Soekarno Hatta sea port, Makassar. Duty-paid
alcoholic beverage can also enter the country via all Indonesian international airports.115
While regional governments were given the discretion to regulate alcoholic drinks distribution
in their own provinces or districts as they saw appropriate, most offices chose to abide by the
January 2015 Permendag. Only a few regions, such as Bali and Lombok, opted to implement
less stringent restrictions in a bid to cater to beer demand from tourists.116 Additionally, about
a year later, it was announced by Governor of Jakarta that category A alcoholic beverages with
alcohol content up to 5 percent, including beer, will again be available in capital city’s minimarkets.117 However, the ban remains in place in all other parts of the country.
Challenges for EU Producers
Alcoholic beverage advertisement is prohibited in all media in Indonesia. Because of this, EU
producers may find it difficult to promote their products in the Indonesian market.
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
113
©Indonesia Investments, “Alcohol-Free Beer in Indonesia: Strategy to comply with Rules” available at:
http://www.indonesia-investments.com/news/todays-headlines/alcohol-free-beer-in-indonesia-strategy-tocomply-with-rules/item6342
114
© EIBN, EU-Indonesia Business Network, “Participating in the Wine and Cheese Expo” available at:
https://www.hrvatskiizvoznici.hr/Cms_Data/Contents/hiz/Folders/dokumenti/~contents/JMU2WKD4TK45LJHL/wine---cheese-expo2014.pdf
115
U.S. Department of Agriculture, “Indonesia: New Regulations on Alcoholic Beverage Distribution”, GAIN
Report, June 2014 available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/New%20Regulation%20on%20Alcoholic%20Bevera
ge%20Distribution%20%20_Jakarta_Indonesia_5-6-2014.pdf
116
© Source: Euromonitor International, “Spirits in Indonesia”, 2015
117
©Indonesia Investments, “Alcohol in Indonesia: Beer Available Again in Jakarta’s Minimarts?” available at:
http://www.indonesia-investments.com/news/todays-headlines/alcohol-in-indonesia-beer-available-again-injakarta-s-minimarts/item685
112
67
Tastes of Europe Indonesia – Market Entry Handbook
3.4 Fresh and Processed Meat
Strengths
Opportunities
•Important cultural base with a
number of familiar meat dishes
•EU meat products are recognised for
quality, responsibilty, and ethical
production
•Increasing consumer income
expected to coincide with greater
demand for meat products
•Improving cold-chain distribution and
retail options, centered around core
markets
Meat Outlook
Weaknesses
Threats
•Competitive domestic market with
important share of output held by
domestic producers
•Lower rates of consumption for
certain meat products, such as porkbased products which contravene
Islamic dietary guidelines
•Excessive interpretation of SPS
requirements restrict EU market
access
•Domestic legislation limits
opportunities for EU producers
Consumption
According to FAO-OECD estimates,
protein was consumed in the
following percentages in Indonesia in
2015: fish (74 percent); poultry (15
percent); pork (6 percent); beef and
veal (4 percent); and sheep (1
percent). 118 Additionally, Indonesia
has a relatively lower meat
consumption per capita compared to
other Southeast Asian countries.
Animal product consumption is at the
same level as in India, but at a lower
level than in the rest of Southeast Asia
or in Brazil, Russia, and China. 119
However, as Indonesia’s food system continues to evolve, a larger modern food retail sector
and changing consumer tastes and preferences are likely to increase the market for the higher
value foods120, including chilled and frozen meat. EU producers stand to benefit greatly from
the increased demand for imported meat, particularly beef.
Organisation for Economic Co-operation and Development, “Meat consumption” available at:
https://data.oecd.org/agroutput/meat-consumption.htm.
119
U.S. Department of Agriculture, “Indonesia’s Modern Retail Sector: Interaction with Changing Food
Consumption and Trade Patterns” available at:
https://www.ers.usda.gov/webdocs/publications/44684/28836_eib97_1_.pdf?v=41304
120
Ibid.
118
68
Tastes of Europe Indonesia – Market Entry Handbook
Consumer Trends
In recent times, Indonesians have been consuming more meat. Importantly, food grain
consumption has been declining on a per-person basis over the last few decades.121 It has been
observed that as starch-based calories have declined, meat, dairy, and egg consumption has
grown strongly instead.
As Indonesia’s food system continues to evolve, a larger modern food retail sector and
changing consumer tastes and preferences are likely to increase the market for the higher value
foods, beverages, and food processing inputs. Some of this market increase will be supplied by
imports. Namely, improvements to the cold chain store system, often implemented by the
modern food retail companies, would enable wider sales of chilled and frozen meat and dairy
products. While much of dairy product consumption needs will continue to be met by imports,
chilled/frozen meat demand is supplied both by imports and by domestic production.122
Evidences revealed that Indonesia has relatively lower meat consumption per capita compared
to other Southeast Asian countries, though its demand is rapidly increasing.
Beef consumption is rising sharply in Indonesia. According to the Australian Bureau of
Agriculture and Resource Economics and Sciences (ABARES), the real value of Indonesian
domestic beef production is set to increase more than 200 percent by 2050 compared to 2009;
beef consumption will rise more than 14 times during the same period. The growth will largely
come from urban consumers, whose value of beef consumption is projected to be higher than
China’s average, by 2050 (ABARES, per person basis)
Prospects for growth in broiler meat are strong if incomes continue to rise in Indonesia. These
foods benefit from refrigeration, and large-scale supply chains may be able to offer such
products at lower prices. Thus, further consumer shifts to animal products are likely to present
an opportunity that modern food retail chains will pursue. 123
Increasingly, the busy lifestyles of Indonesian consumers have prompted them to purchase and
prepare convenient food at home, such as chicken nuggets, sausages and meatballs 124
Additionally, as a result of the rapid outlet expansion of modern grocery retailers, particularly
hypermarkets, supermarkets and convenience stores, the distribution coverage of many
processed meat and seafood products has been extended in 2015.
Consumer Profiles
“At lower incomes, typical diets [of Indonesians]include rice with some modest garnishing and
vegetables. Moderately higher incomes permit a more varied diet with a significantly higher
share of spending on fish, meat, eggs, dairy and fruit”.125 Spending on prepared foods also
rises rapidly with income. Urban Indonesians have traditionally eaten out a lot. Their spending
on convenience foods is also rising strongly. As “almost 90 percent of all Indonesians are
U.S. Department of Agriculture, “Indonesia’s Modern Retail Sector: Interaction with Changing Food
Consumption and Trade Patterns” available at:
https://www.ers.usda.gov/webdocs/publications/44684/28836_eib97_1_.pdf?v=41304
122
Ibid.
123
U.S. Department of Agriculture, “Indonesia’s Modern Retail Sector: Interaction with Changing Food
Consumption and Trade Patterns” available at:
https://www.ers.usda.gov/webdocs/publications/44684/28836_eib97_1_.pdf?v=41304
124
© Source: Euromonitor International, “Processed Meat and Seafood in Indonesia”, 2015
125
Halal Meat Exporters, “Frequently Asked Questions: Marketing Halal meat products to Indonesian
Consumers” available at: http://group31globalmarketing.weebly.com/faqs.html
121
69
Tastes of Europe Indonesia – Market Entry Handbook
Muslims, most of them observe Islamic dietary laws”, which includes the non-consumption of
pork126.
Offer
The local industry dominates the markets for frozen poultry and meat products. 127 Beef is
instead mostly imported.
Imports
According to statistics retrieved from the International Trade Centre, Indonesia imported EUR
303 million worth of meat and edible meat offal (HS Chapter 02) in 2010. This amount
decreased to EUR 235 million by 2015. Importantly, imports of meat and edible meat offal in
Indonesia reached an all-time high of EUR 337 million in 2014. The main countries from
which Indonesia imported meat and edible meat offal in 2015 and their respective market
shares were: Australia (75.7 percent), New Zealand (17.7 percent), the United States of
America (4.8 percent), and Malaysia (1.4 percent). The EU’s market share for this product
category was only 0.3
percent in 2015.128
The main exporters of
red meats (fresh,
chilled and frozen)
are Australia, New
Zealand and the
United States.
The figure below
shows trends in
imports for several
categories of meat
and edible meat offal
over the period 20102015.
Ibid.
U.S. Department of Agriculture, “Indonesia: Retail Foods: Retail Foods Update” available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-182015.pdf
128
© Trade Map, International Trade Centre, available at www.trademap.org.
126
127
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Tastes of Europe Indonesia – Market Entry Handbook
250000
200000
€ '000
150000
100000
50000
2010
0
2011
2012
2013
2014
2015
Figure 12: Indonesian Imports of Meat and Edible Meat Offal, 2010-2015.129
Imports of products that fall under the HS 1601 category came mainly from Malaysia (69.9
percent), Singapore (26 percent) and France (2.5 percent) in 2015. France was the only market
player from the EU.
Imports of products that fall under the HS 1602 category came mainly from Australia (87.8
percent), Malaysia (6.1 percent), and the United States (4.7 percent) in 2015. The EU’s market
share in this category was 0.3 percent, with Italy accounting for 0.2 percent and Belgium
accounting for 0.1 percent.130
The figure below shows the trends in Indonesian imports of processed meat over the period
2010-2015.
129
130
© Trade Map, International Trade Center, available at: http://www.trademap.org/
Ibid
71
Tastes of Europe Indonesia – Market Entry Handbook
Indonesian Imports of Processed Meat (2010-2015)
12000
10000
€ '000
8000
6000
4000
2000
0
1602- Prepared or preserved meat,
offal or blood (excluding sausages and
similar products, and meat ...
1601- Sausages and similar products,
of meat, offal or blood; food
preparations based on these products
2010
3033
334
2011
4394
256
2012
7686
238
2013
9509
3404
2014
10716
4182
2015
10961
10746
Figure 13: Indonesian Imports of Processed Meat, 2010-2015.131
Exports
In 2010, Indonesian exports of products that fall under the HS category 02 (Meat and Edible
Meat Offal) amounted to EUR 18 million. By 2015, exports increased to EUR 21 million. The
main export destinations for such products and their respective market shares in 2015 were:
Belgium (61.1 percent), France (26.2 percent), the Netherlands (4.2 percent), and China (3.6
percent).132
Exports of products that fall under the HS 1601 category amounted to EUR 54,000 and went
mainly to Timor Leste, Australia and the Christmas Islands.
Exports of products that fall under the HS 1602 category amounted to EUR 236,000 and mainly
went to Brunei Darussalam, Singapore, the Republic of Korea and Hong Kong, China.133
The figure 19 below shows trends in Indonesia’s exports for meat and edible meat offal over
the period 2010-2015.
131
132
133
© Trade Map, International Trade Center, available at: http://www.trademap.org/
© Trade Map, International Trade Center, available at: http://www.trademap.org/
Ibid
72
Tastes of Europe Indonesia – Market Entry Handbook
25000
20000
15000
10000
5000
0
2011
2012
2013
2014
2015
Export
Figure 14 Indonesia's export of meat and edible meat offal in thousands of euros, 2011-2015.134
Local Competitors
So Good Food retained its leadership in the processed meat industry in 2015. The company
particularly excels in frozen processed poultry, targeting middle to high-income consumers. So
Good Food always looks to ensure that its product endorsers are the current popular
actress/singers/ celebrities. Meanwhile, within shelf stable meat, the company is primarily
popular for its ready-to-eat So Good Sozzis and So Nice sausages, particularly renowned
among children and teenagers, due to their practicality. In 2015, So Good Sozzis delivered
higher retail value sales to So Good Food, due to having a larger profit margin, as a result of
being positioned to
middle-to-highincome groups. So
Nice, on the other
hand, brought larger
retail volume sales but
a lower contribution in
terms of retail value
sales, due to more
affordable
pricing,
aligned with the brand
targeting the lowerincome segment. Both
brands enjoyed rising
awareness thanks to
the active above-theline
promotional
campaign
using
popular
celebrity
endorsers.135
The Indonesian Meat
market
is
highly
134
135
©Trade Map, International Trade Center, available at: http://www.trademap.org/
© Source: Euromonitor International, “Processed Meat and Seafood in Indonesia”, 2015
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Tastes of Europe Indonesia – Market Entry Handbook
competitive and fragmented with the top players Bernandi and Pronas, which together
accounted for roughly 21.1 percent share of the market.136
Specific Customs and SPS Requirements
Import Permit and Certification
All meat imports require an import permit (SPI) from Indonesia’s Ministry of Trade, which
first necessitates an import recommendation approval (RTK- Rekomendasi Teknis Kesehatan)
from Directorate General for Livestock Animal Health Service (DGLAHS) in the Ministry of
Agriculture.137 Before applying for the RTK, the importer must get a recommendation from
the Head of the National Food and Drug Agency (BPOM). Importantly, only an RTK from
the Ministry of Agriculture and an SPI from the Ministry of Trade is required in the case of
imported raw meat.
Importers must indicate the product being imported and the market destination (restaurant,
hotel, catering, industry, etc.) in their RTK application. Applications can be made in December,
April, and August for January-April, May-August, September-December permits, respectively.
The Ministry of Agriculture no longer issues volume allocations. However, the Ministry of
Trade will determine import volumes through the SPI process and the importer must import
minimum 80 percent of import permit allocation per year. Certificates of health from exporting
countries must indicate the SPI Number.
The Indonesian Ministry of Agriculture released regulation 58/2015 which lists prime cuts,
manufacturing meat, and variety meat (including tail and tongue) permitted for import by
general and producer importer. However, state or regional/district-owned enterprises can
import secondary cuts at any time in the event of insufficient supply due to epidemic disease,
natural disaster or anticipated price fluctuations. MOA 58/2015, along with MOT Regulation
No. 47/2013, set reference prices for meat, which are intended to trigger meat imports when
local retail prices rise above a set level.
The Ministry of Agriculture Regulation No 65/2014 requires that the importation of processed
consumable product of animal origin material (HBAH), including processed meat, must be
accompanied with a sanitation certificate and Halal certificate. Foreign meat manufacturing
plants must be certified both by the DGLAHS and Islamic authorities. For meat and poultry
products, halal precertification is required.
Additionally, the Ministry of Trade Regulation 87/2015 states that the importation of food
products for 215 HS Codes (HS codes 1601-2202) requires pre-shipment inspection.
A certificate stating that the product is not contaminated by radiation greater than the level
stated is required to accompany imports of meat and meat products: Cs137 100 Bq/kg. The
radiation compliance certificate is to be issued by the responsible authority in the country of
origin or exporting country.
Ibid.
U.S. Department of Agriculture, “Indonesia: Food and Agricultural Import Regulations and StandardsNarrative” available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20and%20Agricultural%20Import%20Regula
tions%20and%20Standards%20-%20Narrative_Jakarta_Indonesia_12-24-2015.pdf
136
137
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Tastes of Europe Indonesia – Market Entry Handbook
SPS Measures
In recent times, specific concerns about Indonesia’s SPS policies have been raised in the
Sanitary and Phytosanitary (SPS) Committee of the World Trade Organization.138 They include
import restrictions on pork products due to influenza A/H1N1 (raised by Mexico and supported
by Australia, Brazil, Canada, the Dominican Republic, and the United States); new meat import
conditions (raised by the EU); and import restrictions on poultry meat (raised by Brazil); import
restrictions on beef and recognition of the principle of regionalization (raised by Brazil); and
Indonesia's port closure (raised by the United States and supported by Australia, Canada, Chile,
EU, Japan, the Republic of Korea, New Zealand, and South Africa).
Examples of SPS measures that have impacted specific products or product categories from
the EU include unjustified import restrictions on a number of animals and animal products
related to Bovine Spongiform Encephalopathy (BSE) and other diseases. New legislation for
food (Food Law 18/2012) self-sufficiency puts temporary ban on agriculture and fisheries’
imports.139
Labelling
Specific requirements for labelling on fresh and processed meat include:
•
•
•
•
•
For products derived from swine: the words "MENGANDUNG BABI." (contains
pork) to be written in red 'universe medium corps 12' font and enclosed in a red
rectangle together with a drawing of a pig.
Irradiated packaged food must carry the words "RADURA: PANGAN
IRADIASI" (Irradiated food), the reason for irradiation and this logo. Also required
are the name and address of the radiation facility, the month and year of irradiation,
and the country in which the process was carried out. If the food cannot be reirradiated, then the label should include the word: “TIDAK BOLEH DIRADIASI
ULANG” (Not to be re-irradiated).
Food derived from genetic engineering must have” PANGAN REKAYASA
GENETIKA” (Genetically Engineered food) on the label.
Processed food for infants, children below five, pregnant or breast-feeding mothers,
people on special diets, elders, and sufferers of certain diseases should be informed
of the portion size, method of use and other necessary instructions, including the
impact of the food on human health.
If the product has been approved as meeting Indonesian Islamic standards, then
“Halal” should appear on the package.140
Challenges for EU Producers
Indonesia introduced a new Food Law in 2012 seeking to strengthen the principles of food
sovereignty and food self-reliance in ensuring food security by giving priority to the domestic
production of staples. 141 Self-sufficiency targets exist for five staples, including beef. The
Indonesian government revised the timeframe for achieving self-sufficiency to 2019 for beef.
© World Trade Organization, “Trade Policy Review”, available at:
https://www.wto.org/english/tratop_e/tpr_e/s278_e.pdf
139
EU Commission, DG Trade, Market Access Database, “Sanitary and Phytosanitary Issues” available at:
http://madb.europa.eu/madb/sps_barriers_details.htm?barrier_id=10600.
140
U.S. Department of Agriculture, “Food and Agricultural Import Regulations and Standards” available at:
https://www.scribd.com/doc/76535113/Indonesia-Food-and-Agricultural-Import-Regulations-and-Standards
141
OECD, “Indonesia Policy Brief: Agriculture” available at: https://www.oecd.org/policy-briefs/indonesiaagriculture-improving-food-security.pdf
138
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Tastes of Europe Indonesia – Market Entry Handbook
To foster self-sufficiency, Indonesia provides significant market price support to agricultural
producers. Because of this legislation, EU exports of beef may be low and/or face
disadvantages in the Indonesian market place.
The Ministry of Agriculture (MOA) and The Ministry of Trade (MOT) regulations also limit
the sale of imported beef to the hotel and restaurant industry.142
Distribution
Consumers in Indonesia purchase 70 percent of fresh meat in traditional markets.143 While
most Indonesians purchase their food from traditional markets, modern food retail stores sell
an increasing share of food products, particularly packaged goods, to urban consumers. 144 It
has since been found that hypermarkets and supermarkets are the leading distribution channels
in the Indonesian meat market.145
Big supermarkets and hypermarkets are important outlets for European products. The most
popular hypermarkets in oIndonesia include Carrefour, Hypermart and Giant. 146 Popular
supermarkets also include Superindo, Food Mart and Hero.
Modern stores offer refrigeration, air conditioning, and quality assurance that are usually not
found in traditional shops. Refrigeration, especially for meats, helps expand consumption and
address consumers’ food safety concerns. Refrigeration is available in all modern formats in
Indonesia, but it can be unavailable or unreliable in traditional formats. Modern retail markets
are generally more consistent than traditional markets in keeping raw meats and vegetables
separate to avoid bacterial contamination. In traditional markets, slaughtering may occur onsite
close to retail offerings.
U.S. Department of Agriculture, “Indonesia Retail Foods” available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-182015.pdf
143
U.S. Department of Agriculture, “Indonesia Retail Foods” available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-182015.pdf
144
U.S. Department of Agriculture, Economic Research Service, “Indonesia’s Modern Retail Sector: Interaction
with Changing Food Consumption and Trade Patterns” available at:
https://www.ers.usda.gov/webdocs/publications/44684/28836_eib97_1_.pdf?v=41304.
145
U.S. Department of Agriculture, “Indonesia Retail Food” available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-182015.pdf.
146
U.S. Department of Agriculture, Economic Research Service, “Indonesia’s Modern Retail Sector: Interaction
with Changing Food Consumption and Trade Patterns” available at:
https://www.ers.usda.gov/webdocs/publications/44684/28836_eib97_1_.pdf?v=41304.
142
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Tastes of Europe Indonesia – Market Entry Handbook
Challenges for EU Producers
Indonesia’s food retail market has so far proved slower to embrace frozen broiler meat and
modern stores than some of the countries with which it is usually compared. 147 Border
measures, infrastructure deficiencies, and domestic political concern for the traditional food
system make dietary and retailing changes difficult.
147
Ibid.
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Tastes of Europe Indonesia – Market Entry Handbook
3.5 Olive Oil
Opportunities
Strengths
•Important cultural base where people
use a lot of oil for cooking
•EU is recognized as the main importer
of Olive oil
•Increasing consumer income
expected to coincide with greater
demand for oive oil
•Consumers are becoming more
health-concious and see olive oil as
healthier option
Meat Outlook
Weaknesses
Threats
•Competitive domestic market
•Olive oil is seen as a niche products,
as many people still prefer cheap
palm oil for cooking
•Neigbouring countries like Thailand
are expected to increase palm oil
production, meaning that more
cheaper palm oil can become
available in Indonesia's market
Consumption
A market for imported olive oil
is emerging in Indonesia. EU
producers stand to benefit
tremendously as the major
global suppliers of the product.
Additionally, as Indonesians
become more health conscious,
this trend is also likely to
benefit olive oil. However, this
product is only expected to
attract a niche consumer base
among middle-to-upper income
class Indonesians and premium
hotels/ restaurants due to its
high price.
Consumer Trends
The demand for imported olive oil is expected to increase in Indonesia in the coming years.
Importantly, the Indonesian government has taken measures to prohibit the use of unbranded
cooking oils, which are usually cheap but unhealthy alternatives to other cooking oils.
Government regulation 80/M-DAG/PER/10/2014 supports the sale of packaged and branded
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Tastes of Europe Indonesia – Market Entry Handbook
cooking oil and discourages the use of bulk
unbranded and unpackaged cooking oils (locally
known as “minyak curah”), which is typically sold
in traditional markets.148
Indonesian consumers, especially middle—toupper-income urban dwellers, are expected to follow
the global trend of increasing health awareness.
Given this, producers of healthier products expect to
see rapid growth in their sales performance over the
forecast period. These product types will grow at the
expense of palm oil, although this will continue to
dominate retail value sales of vegetable and seed oil
up to the end of the forecast period. The health trend
is also likely to benefit olive oil, although the product
will still attract a niche consumer base due to its high
price.
Because of the expansion of tourism, hotels,
restaurants and institutional sectors will continue
and increase their demand for specific food products,
and to meet demand, some may need to be imported.
Olive oil, which is used mainly as a salad oil in the
hospitality industry, stands to benefit from this increased demand.
Consumer Profiles
As consumers’ purchasing power declined in 2015, many consumers, especially those from the
low-income groups, traded down to cheap unbranded and unpackaged cooking oils. As is to be
expected, olive oil, a more expensive alternative to other cooking oils, is mostly consumed by
middle-to-upper income Indonesians and premium hotels/restaurants.
Offer
Imports
Imports rose by 241 percent in value and 177 percent in volume between 2010 and 2014. The
market is expected to grow by 20.6 percent by volume and 15.1 percent by price between 2015
and 2020.149
148
149
© Source: Euromonitor International, “Oils and Fats in Indonesia”, 2015 .
© Trade Map, International Trade Center, available at: http://www.trademap.org/.
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Tastes of Europe Indonesia – Market Entry Handbook
Indonesia's Imports of Olive Oil by Quantity (2011-2015)
Unit: Tonnes
2500
2000
1500
1000
500
0
2011
2012
2013
2014
2015
Imports
Figure 15: Indonesia's Olive Oil Imports, in tonnes (2011-2015)150
Exports
Indonesia is not a major olive oil producer; thus, its olive oil exports are relatively low. In 2015
Indonesia only exported 7 tons of olive oil.
120
100
80
60
40
20
0
2011
2012
2013
2014
2015
Export
Figure 16 Indonesia's Olive Oil Exports, in tonnes (2011-2015)151
150
151
Ibid.
Ibid.
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Tastes of Europe Indonesia – Market Entry Handbook
Competition
In 2015, cooking oil (mostly composed of
vegetable and seed oil) was the dominant
contributor to sales of oils and fats category in
Indonesia. Palm oil dominates the retail value
sales of vegetable and seed oil. In 2015, the value
share of branded oils and fats continued to be
divided
between
the
five
principal
manufacturers, namely Salim Ivomas Pratama,
Unilever Indonesia, SMART, Bina Karya Prima
and Sari Agrotama Persada. In 2015 they
accounted for a combined retail value share of 90
percent in oils and fats. Their brands, namely
Bimoli, Blue Band, Filma, Tropical and Sania
respectively, are well-known in the country.
Thanks to continuous promotions and extensive
distribution networks, these brands managed to
gain trust from loyal consumers and thus
retained their leading positions.152
Distribution
Imported olive oil attracts a niche consumer base among middle-to-upper income class
Indonesians. Hypermarkets and supermarkets are the most suitable retail outlets as they offer
a wide range of imported food and beverage products that cater to the target market.
152
© Source: Euromonitor Intrnational, “Oils and Fats in Indonesia”, 2015
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Tastes of Europe Indonesia – Market Entry Handbook
3.6 Fresh Fruits and Vegetables
Strengths
Opportunities
•Important cultural base with a
number of familiar meat dishes
•EU meat products are recognised for
quality, responsibilty, and ethical
production
•Increasing consumer income
expected to coincide with greater
demand for meat products
•Improving cold-chain distribution and
retail options, centered around core
markets
Meat Outlook
Weaknesses
Threats
•Competitive domestic market with
important share of output held by
domestic producers
•Lower rates of consumption for
certain meat products, such as porkbased products which contravene
Islamic dietary guidelines
•Excessive interpretation of SPS
requirements restrict EU market
access
•Domestic legislation limits
opportunities for EU producers
Consumption
Indonesia’s consumption of
fruits and vegetables is still
below the standard set by Food
and Agriculture Organization
(FAO). According to the
Indonesian
Ministry
of
Agriculture, per-capita fruit
and vegetables consumption
among the nation’s citizens is
estimated to average less than
40 kg per year, which is well
below the FAO standard of
65.75 kg per capita a year.153
Fresh fruits and vegetables
have always made up a significant portion of the Indonesian diet, which in the past consisted
of locally grown produce purchased from traditional retail outlets and markets. Indonesian
consumer spending on fresh horticultural products compared to that on rice was 50 percent in
©Food and Agriculture Organization of the United Nations, 2006, A. Dimyati and S. Kuntarsih, “Fruit and
Vegetable Development Program for Human Health in Indonesia” available at
http://www.fao.org/fileadmin/templates/agphome/documents/horticulture/WHO/seoul/Indonesia_Paper_Dirjen
-Korea.pdf . Reproduced with permission
153
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Tastes of Europe Indonesia – Market Entry Handbook
1994, this has since risen to 75 percent in 2004 and 100 percent for urban dwelling Indonesians
in 2007.154
Indonesia’s upper middle class is expected to grow to 30 million people by 2015 according to
World Bank estimates. The growth of the middle class is expected to drive this new trend of
an increased awareness about health and the nutritional benefits of fresh fruit and vegetables.
Additionally, it is also expected that this new trend will become entrenched in everyday eating
habits and will be accelerated by improved supply chains and the ease of access to modern
retail facilities such as supermarkets in urban areas. The latter will allow for the correct storage
of fresh produce, thus making previously unavailable varieties of fruit and vegetables available
to consumers.
Hence, the market is highly promising for both local and foreign producers. The country’s
reliance on imports, however, shows the declining competitiveness of domestic horticulture, as
well as the government’s moves towards more protectionist and restrictive trade policies.
Consumer Profile: Fruit Preference and Health Concerns
The growing economy has changed consumer lifestyles in Indonesia. Indonesian consumers
are busier and work longer hours and are therefore more likely to consume unhealthy food.
This has caused an increasing trend of non-communicable diseases, such as heart disorders,
kidney failure, liver malfunction, high cholesterols and diabetes. On the other hand, many
consumers have low incomes and it is difficult for them to fulfill their nutritional needs.
Therefore, malnutrition is very common in the Indonesian society. To alleviate this problem,
the Indonesian government through the Ministry of Health proclaimed the Healthy Indonesia
2010 Programme. The Ministry of Agriculture through the Directorate General of Horticulture
supports the programme by formulating various national programs for developing the fruit and
vegetable industries to fulfill the consumer’s need.155
World Bank, “Horticultural Producers and Supermarket Development in Indonesia” available at
http://documents.worldbank.org/curated/en/863941468752426320/Horticultural-producers-and-supermarketdevelopment-in-Indonesia
155
© Food and Agriculture Organization of the United Nations, 2006, A. Dimyati and S. Kuntarsih, “Fruit and
Vegetable Development Program for Human Health in Indonesia” available at
http://www.fao.org/fileadmin/templates/agphome/documents/horticulture/WHO/seoul/Indonesia_Paper_Dirjen
-Korea.pdf . Reproduced with permission
154
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Tastes of Europe Indonesia – Market Entry Handbook
Because of the expanding middle-class, the consumption of fruits in Indonesia has been
increasing. This is driven by increasing consumption from one demographic segment:
Indonesian elders, who have been consuming more fruits and vegetables and provide lucrative
business opportunity for foreign fruit exporters. Studies showed that the five most frequently
consumed fruits among elderly Indonesians were bananas, oranges (citrus), papayas, apples
and watermelons. The results of the study are presented in figure below where n shows the
number of respondents out of a sample of 7078 people.
Figure 17: Fruit consumption in Indonesia amongst the elderly (65 and above)156
Research on consumer preferences in 2011 revealed that most Indonesians look at other
consumers’ preferences before buying. They preferred apples, oranges and mangoes
(particularly shredded) and peanuts. In many cases, imported fruits are preferred over local
fruits, particularly those with cheap prices and attractive physical appearance. The other factors
Nurhayati Nurhayati, “Recommended Alternative Daily Intake of Fruits and Vegetables for Indonesian
Elderly” 2014 Vol5, No1, p. 32, Health Science Journal of Indonesia, available at:
http://ejournal.litbang.depkes.go.id/index.php/HSJI/article/view/3528 , reproduction permissible under a
Creative Commons License found here: https://creativecommons.org/licenses/by-sa/4.0/
156
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Tastes of Europe Indonesia – Market Entry Handbook
that play a significant role in the Indonesian consumers’ purchase of fruits are price, colour and
freshness.157
Consumer Trends: How to Market Fruits and Vegetables in Indonesia
Indonesia is an agro-based country with tropical climate suitable for growing various
horticultural crops including tropical fruits and vegetables. They are cultivated in different
business scales and cultivation systems.
There are various tropical fruits and vegetables available throughout the year or seasonally.
Banana, pineapple, papaya, citrus, star fruit, snake fruit, melon, and watermelon, are among
tropical fruits available all year round; whereas, durian, mango, mangosteen, and lansium are
among tropical fruits seasonally available.
A lot of fruits in Indonesia are still sold in wet markets or street stalls. In some small cities
throughout Indonesia, tourists can easily find local farmers offering their fruits on the streets.
Popular fruits that are being sold include durians, mangoes, oranges and rambutans.
Offer
Domestic Market and Main Competitors
Indonesia’s horticulture sector is a key opportunity for international players to work with local
farmers to introduce improved production methods and coordinate economies of scale which
would result in improved harvests and efficiencies. Seed research, modern planting and
greenhouse methodology in addition to cold chain storage and transportation networks offer
interesting business opportunities.
However, exporters should position themselves strategically rather than competing directly
with local producers. They should offer products which cannot be grown locally such as
temperate fruit varieties. For example, those stone fruits (such as cherries, peaches and plums)
as well as various berry fruit that cannot be cultivated in Indonesia’s tropical climate make a
good choice for exporters.
Indonesia’s fresh fruit and vegetables sector is at a key stage in its development. It can offer
interesting opportunities to international importers. However, a more hands-on approach will
have to be taken by the government to have any real impact on the horticulture sector.
The middle-upper income section of Indonesia’s consumers will continue to provide demand
to fruit exporters to Indonesia. More competition might however riase from local producers if
market conditions are favourable.
The Agriculture Ministry is aiming at increasing the value of Indonesian flower and fruit
farming by IRD 120 trillion (USD 9 billion) by pushing promotion, revitalising plantations and
boosting local fruit consumption. Agriculture Minister Amran Sulaiman said that the decision
was based on the increasing opportunity for fruit exports from Indonesia, on top of surging
157
© Agriculture and Agri-food Canada, “The Indonesian Consumer Behaviour, Attitudes and Perceptions
Toward Food Products”, January 2011, available at: http://publications.gc.ca/collections/collection_2013/aacaafc/A74-2-2011-19-eng.pdf
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domestic local demand stating that “Our fruit exports continue to increase on top of meeting
our local demand”.158
Fruit includes five commodities that are seen as having strong potential demand locally and
internationally: banana, mango, citrus, mangosteen and durian.
Banana: As a tropical country, Indonesia is a perfect spot for growing this yellow,
carbohydrate-rich fruit. It is one of the most important banana export hubs in Asian region as
it has been shipping the fruit overseas for more than a century, since the Dutch occupation of
the country. Major production hubs are located in Sumatera, Java and Bali. The most popular
type is the Ambon Banana originating from Maluku Islands but has been cultivated elsewhere
in Indonesia.
Mango: Indonesian mangoes are known for their sweet taste, bright yellow color, strong aroma
and soft texture. Mangga Harum Manis (literally translates as sweet and fragrant mango),
produced in Java, has been the major fruit commodity exported to the US, Canada, Europe,
China, Middle East, Japan and Singapore. Other popular mangoes are Indramayu, which is big
in shape, and Gedong Gincu, which has orange skin and extremely sweet taste.
Orange (Citrus): Indonesia is among the world’s top 10 orange producers, with most of the
fruit exported to ASEAN countries such as Malaysia and Singapore. Orange production could
easily be found in all areas throughout Indonesia from Java, Sumatera, Kalimantan and Bali.
Among many types of citrus in Indonesia, the Pontianak orange, which originates from West
Kalimantan, is the most popular choice among Indonesian households due to its sweet,
honeyed-like taste.
Mangosteen: Indonesia’s mangosteen is famous for becoming the best value-for-money
choice in the regional market, as it comes in high quality but with a cheaper price compared to
its regional counterparts, such as Thai mangosteen. Major productions hubs are in Java,
Sumatera, Lombok and Bali.
Durian: The Indonesian capital Jakarta is nicknamed the “Big Durian” for a reason: you either
love it or hate it – nothing’s in between. This spiky fruit is known to have big share of lovers
in Indonesia and is normally enjoyed together with relatives in big family gathering. Medan
durian is smaller in size and plainer in color, or less attention-grabbing than the famous Thai
Monthong durians, but this local Indonesian fruit comes with stronger smell and richer, more
flavorsome taste of its flesh.
The Jakarta Post, “Indonesia eyes USD 9 billion in fruit flower business”, May 2016 available at:
http://www.thejakartapost.com/news/2016/05/10/indonesia-eyes-us9-billion-in-fruit-flower-business.html
158
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Tastes of Europe Indonesia – Market Entry Handbook
“Vegetable productions in Indonesia are
concentrated in upland areas. Main
products such as cabbage, potato, carrot,
and chilli, have important roles as source of
farmer's income, job opportunity, poverty
alleviation and improvement of food
security. The big potential of vegetable
production is based on the current
consumption rate, increasing domestic
population especially in urban areas and
exporting to abroad markets as well” 159 .
Overall, these factors have contributed to the
growth and development of vegetable
production in Indonesia.
Horticulture plays an important role in the
Indonesian economy. Its share of GDP,
which is dominated by vegetables and fruits,
has trended upwards since 2003. However,
per capita consumption of vegetables is low
in comparison to similar consumption in
other Asian nations.
The study of price integration among
regions is important in order to increase the
marketing efficiency of vegetables in
Indonesia. Government intervention is needed both at the producer and consumer level,
especially in determining the efficient prices. The success of this intervention depends heavily
on government’s understanding of price transmission in the fruits market. This research
measured the integration level of regional vegetables markets in Indonesia. Engle-Granger test
showed that all vegetable prices at PIKJ integrated with producer’s prices, except red chili
price. Ravallion model showed that integration did not exist for all commodities. However,
there was no significant difference of the market integration performance between the highest
and the lowest production area.
The government’s intervention, especially in the form of pricing policies at the producer level,
is much needed in ensuring the stability of vegetables prices. In Indonesia, some vegetables
such as large red chili and shallots are classified by the Bank of Indonesia (2010) as major
contributors to inflation. The government’s ability to determine the most suitable pricing policy
is strongly influenced by how profound the decision makers’ understanding of the market
structure, behavior and effectiveness is. One of the methods to understand the structure,
behavior, and effectiveness of the market is by understanding the relative strength of a market
and the price diffusion from one market to another through a market integration study among
regions in a country.
159
Arsanti, Idha; Bohme, Michael; Jahnke, Hans E., “Evaluation of Vegetable Farming Systems for
Competitiveness in Upland Areas of Java and Sumatra, Indonesia”, retrieved from:
http://www.tropentag.de/2006/abstracts/full/272.pdf
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Tastes of Europe Indonesia – Market Entry Handbook
There are well established retailers specifically selling fruits in big cities in Jakarta. Leading
fruit retailers are All Fresh Fruit Store in Indonesia, which boasts 10 branches in Jakarta and
West Java. Another noted retailer is PT Total Buah Segar that has operated various branches
in Indonesia since 2013. Both the fruit retailers sell high-quality imported and domestic fruits
and have grown in popularity among the capital’s middle-class citizens.
Import
The growing number of middle-class consumers with increased purchasing power in Indonesia
has translated into a growing demand for imported fruits. This shows potential business
opportunities for European fruit exporters. The Indonesian Government in 2014 unveiled plans
to more than double the import quota for fruits and vegetables to try and meet a surge in
domestic demand. The Indonesian Trade Ministry said the Government would allow up to
600,000 tons of 17 horticultural products including apples, mangoes, citrus and potatoes to be
imported in the first half of the year, up from 260,000 tons in the same period of 2013.
Aside from the eight aforementioned fruits, Indonesia also imports some other fruits,
particularly those which are not grown suitably in the country. These include apple, grape,
kiwifruit, pear, and palm fruit which can be categorised as prominent imported fruits. Apple,
grape, kiwifruit, and pear are commonly consumed in urban areas. Meanwhile, palm fruit is
favorably consumed by Muslims especially during the fasting month (Ramadan). “Total
volume and value of these five fruit in 2013 were respectively recorded at 328,426,720 kg and
USD “[432 million (EUR 386 million)].160. In other words, the proportion of volume and value
of these imported fruit was about 67 percent of the total volume and value of imported fruit of
the country.
160
Arsanti, Idha; Bohme, Michael; Jahnke, Hans E., “Evaluation of Vegetable Farming Systems for
Competitiveness in Upland Areas of Java and Sumatra, Indonesia”, Tropentag,
retrieved from:
http://www.tropentag.de/2006/abstracts/full/272.pdf
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Tastes of Europe Indonesia – Market Entry Handbook
Indonesia’s lucrative fruit market, though boasting enormous potential for overseas exporters,
has not been without controversy. In 2013, the Indonesian Government banned the import of
thirteen horticultural and agricultural products to protect its local market, affecting the regional
fruit trade and inciting complaints from its trading partners.
This move was followed by a similar stance from the central government that in January 2017
called for importers of horticulture to purchase domestically grown fruits and vegetables to
support local farmers. In late 2016, in fact, “Indonesia launched the “Orange Revolution” late
last year to push up local fruit production, aiming to become the biggest tropical fruit exporter
in ASEAN by 2025, and in the world by 2045”.161
Export
With the launch of the ASEAN Economic Community (AEC) in 2016, Indonesia began to face
tougher competition for its fruits exports. The AEC promotes a high degree of free trade among
its member nations. Therefore, competition for tropical fruit exports has increased, not only in
export markets in other parts of the ASEAN region but also in Indonesia's domestic market.162
Stefani Ribka, “Importers urged to buy local fruit, vegetables”, The Jakarta Post, January 2017 available at:
http://www.thejakartapost.com/news/2017/01/12/importers-urged-to-buy-local-fruits-vegetables.html
162
©Indonesia Investments, “Indonesia is rich in tropical fruits but export remains low” available at:
http://www.indonesia-investments.com/news/todays-headlines/indonesia-is-rich-in-tropical-fruits-but-exportremains-low.-why/item6653
161
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Tastes of Europe Indonesia – Market Entry Handbook
Indonesia's Exports of Fresh Fruits (2011-2015)
Unit: EUR thousand
800000
600000
400000
200000
0
2011
2012
2013
2014
2015
Export
Figure 18: Indonesia's Exports of Fresh Fruits (2011-2015)163
Based on a report from Indonesia's Ministry of Agriculture, there is a solid demand for
Indonesia's tropical fruits in the United States, the Netherlands, Spain, Japan and the Middle
East. In 2015, pineapples were Indonesia's most valuable products in terms of fruit exports. In
that year, Indonesia exported a total of 193,940 tons of pineapples, generating USD 232.3
million (EUR 207 million) in exports. This was followed by mangosteen and then banana.
Other fruits that are valuable due to high global demand are mangos, oranges and durians.164
However, there are several interrelated factors that block higher export volumes and earnings.
Firstly, the quality of Indonesia's fruit is generally low because nearly all of Indonesian fruit
farmers are smallholders who lack the financial resources to invest in higher-quality machinery,
pesticides and fertilizer, and who also lack mastery of higher-quality farming techniques. This
low quality fruit is not suitable for export purposes. Secondly, Indonesia does not have big fruit
plantations or estates. Thirdly, despite being rich in tropical fruit, Indonesia lacks a welldeveloped cold storage & transport industry. Adequate handling of freshly picked fruit is
crucial for long storage and shelf lives of fruit and vegetables.165
Distribution
The distribution of fruit and vegetables from farmers to end-consumers in Indonesia typically
involves at least five intermediaries, namely collectors, village/local wholesalers, agents at
central markets, traditional markets and retailers such as fruit-vegetable vendors, small
restaurants and small markets.
“A multi-layer distribution system might be helpful for small farmers to market their
products.”166 Additionally, it could also, to a certain extent, provide employment opportunities
for individuals to act as agents. However, in comparison to those advantages, the disadvantages
of such a system are greater. “Multi-layer distribution system has several disadvantages related
© Trade Map, International Trade Center, available at: http://www.trademap.org/
©Indonesia Investments, “Indonesia is rich in tropical fruits but export remains low. Why?” available at:
http://www.indonesia-investments.com/news/todays-headlines/indonesia-is-rich-in-tropical-fruits-but-exportremains-low.-why/item6653
165
Ibid.
166
Soviana Soviana and Jofi Puspa, “Multi-Layer Distribution System of Indonesian Fruit-Vegetable Sector:
Current Challenges and Future Perspectives”, Tropentag, September 2012 available at:
http://www.tropentag.de/2012/abstracts/full/116.pdf
163
164
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Tastes of Europe Indonesia – Market Entry Handbook
to the risk of products’ quality reduction, higher transaction cost, more advanced technical
requirements, more limited information flow, and information asymmetry.”167
Such a long distribution channel is particularly problematic since fruits and vegetables are
perishable and thus very vulnerable. “The longer the chain is, the higher the risk that products’
quality is reduced. Aside from that risk, it is more costly to maintain the freshness (or quality)
of the products through a long distribution channel than through a short one. This transaction
cost will further influence the competitiveness of products and farmers well-being. If the
distributors are to maintain their profit margin, then to cover up the high transaction cost they
will need to either increase the selling price (lowering the competitiveness of products at the
market) or press down the purchasing price (at the end putting more pressure to farmers).” 168
To maintain products’ quality, good storage and transportation facilities are essential. Though
getting better at some aspects in some regions, the existing storage and transportation facilities
are still relatively poor.”Cool-storage and trucks are still not widely implemented yet. Such
facilities are not affordable by small farmers and thus, only large enterprises (wholesalers and
supermarkets) are increasingly using such facilities to maintain their products’ quality.
However, as the demand shifting, it is certainly necessary for farmers as well as other relevant
supply-chain players (such as collectors, agents, etc.) to response to the market demand and
to adjust their technology and management system accordingly” .169
Challenges for the European Products
Transportation and distribution of goods are major challenges for all consumer goods related
industries in Indonesia. As fresh fruit and vegetables need to be delivered fresh, this problem
is even more acute for their producers. Indonesia’s poor infrastructure and high logistical costs
are not new issues for those in the distribution sector.
Some Indonesian seaports have been closed to horticulture products, following the introduction
of new quality standards for imported fruit (Ministry of Agriculture Regulation No. 15/2012
and No. 16/2012).
To import horticultural products into Indonesia, Ministry of Agriculture (MOA) and MOT
regulations require Indonesian importers to obtain: (1) an Import Recommendation of
Horticultural Products (RIPH) from MOA; and (2) an Import Approval (SPI) from MOT.
Import approvals are issued on a biannual basis and are valid for one six-month period. RIPHs
specify, inter alia, the product name, HS code, country of origin, manufacturing location (for
industrial materials), and entry point for all horticultural products the applicant wishes to
import. After securing an RIPH, an importer must obtain an SPI from MOT before importing
horticultural products. An SPI specifies the total quantity of a horticultural product (by tariff
classification) that an importer may import during the period for which the SPI is valid.
Importers cannot amend existing SPIs or apply for additional ones outside the application
window.170
Soviana Soviana and Jofi Puspa, “Multi-Layer Distribution System of Indonesian Fruit-Vegetable Sector:
Current Challenges and Future Perspectives”, Tropentag, September 2012 available at:
http://www.tropentag.de/2012/abstracts/full/116.pdf
168
Ibid.
169
Ibid.
170
U.S. International Trade Administration, “Indonesia Prohibited and Restricted Imports”, available at:
https://www.export.gov/article?id=Indonesia-Prohibited-Restricted-Imports.
167
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Indonesia has updated its import rules on horticultural products through MOT’s Regulation
71/2015 (superseding MOT Regulations 16/2013, 47/2013, and 40/2015), but the new
regulation makes few substantial changes. Import licenses still are required and quantities will
be allocated subject to the importer’s cold storage capacity. MOT eliminated the 80-percent
rule for horticultural products, which imposed punitive measures on importers that used less
than 80 percent of the quota allotted under their import permits. However, importers state that
they must file import-realization reports and that the 80 percent rule is still being implemented
informally. This regulation also specifies that the total import allocation will be set annually
and that importers are no longer required to register as horticultural product importers. MOA
also maintains seasonal import restrictions on certain horticultural products. For example,
oranges can only be imported in months outside of Indonesia harvest periods171.
Indonesia’s fresh fruit and vegetables sector is at a key stage in its development with the scope
to offer lucrative opportunities to both local players and international importers.
However, the government’s plans to tighten their grip over horticultural imports are making
life more difficult for importers and local distributors that have already to face inadequate
infrastructure.
171
Ibid.
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Tastes of Europe Indonesia – Market Entry Handbook
3.7 Processed Fruits and Vegetables
Strengths
Opportunities
•Complementarity between EU and
Indonesian growing seasons
•EU fruit and vegetable products are
recognised for quality, responsibilty,
and ethical production
•Increasing consumer income and
health-awareness expected to
coincide with greater demand for
fruit and vegetable products
•Improving cold-chain distribution and
retail options, centered around core
markets
Fruit &
Vegetable
Outlook
Weaknesses
Threats
•Competitive domestic market with
important share of output held by
domestic producers
•Long distance to market for fresh
produce and potential for spoilage
due to uncertainty at market entry
•Excessive interpretation of SPS
requirements restrict EU market
access
•Competition from regional suppliers
Processed fruits and vegetables is a separate category of food and beverage products, made up
primarily of canned or dried fruit and
vegetables, and sauces. Most fall under
HS 20: Preparations of vegetables, fruit,
nuts or other parts of plants.
Consumption
Consumer trends
Processed fruits and vegetables have
posted positive growth in recent years,
despite being less popular then fresh
fruits and vegetables. Its lack of
popularity stems from Indonesian
consumer’s preference for fresh variants,
as they are cheaper, healthier and have
high availability. Expected rising health consciousness among consumers may even prompt a
further shift away from processed products to fresh ones.172 The current level of consumption
is driven by busy urban consumers seeking convenient healthy snacks.
Driven by the wide availability of fresh fruits and vegetables, not only in wet markets but also
in hypermarkets, supermarkets and some convenience stores, processed fruits and vegetables
posted slower growth in 2015 than in 2014 in terms of both retail volume and value sales.173
The government of Indonesia decided to increase the price of fuel several times during 2015,
a move which further diminished consumer purchasing power and boosted the already high
172
173
© Source: Euromonitor International, “Processed Fruit and Vegetables in Indonesia”, 2015
Ibid.
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Tastes of Europe Indonesia – Market Entry Handbook
rate of inflation. As a result, many Indonesian consumers became more cautious with regards
to their spending, with packaged food no exception. Almost all packaged food categories
recorded marginally slower volume growth in 2015 than in 2014.174
Nonetheless, volume growth remained positive and respectable value of the main packaged
food categories during 2015, with growth supported by a flurry of new product launches,
aggressive promotional activities by key players and the rapid expansion of modern grocery
retailers. These factors all contributed to improvements in consumer knowledge and
understanding of the many products available and consequent increases in spending on various
product types.175
Indonesia's demand for agricultural commodities is expected to remain strong, as the
processing industry for agricultural commodities continues to grow. Urbanisation, an
expanding middle class, and strong domestic demand will fuel sustained demand for
agricultural imports. The increasing receptiveness to Western foods and lifestyle factors has
also led to a change in the diet of Indonesians. This is expected to continue to drive
consumption of processed vegetables and fruit among other commodities.176
Offer
Domestic offer
Indonesia has abundant natural resources and a range of biodiversity including horticulture in
which they must be maintained, utilised, and preserve sustainably. The biodiversity is shown
in the form of fruit crops, vegetable crops, medicinal plants, ormanental plants, aquatic plants,
etc. which have food and aesthetic value. Fruit, in particular, is a group of horticultural plant
species that can be consumed in both of fresh or processed forms.
The majority of fruit producers are small holder farmers, operating on land less than one
hectare, and home-yard. According to the National Statistical Agency (BPS), there were
approximately 6,100 large and medium sized processed food producers and 1.24 million microand small-scale producers with 2.9 million employees in 2014. Micro and small-scale
producers include home industries and products sold in small roadside restaurants, retailer
kiosks called warungs, and pushcarts called kaki limas. “The product value of Indonesia’s large
and medium food and beverage processing industry was estimated at IDR 1,238 trillion ($92.3
billion) [75 billion EUR]. The value of raw materials used by large and medium processors
was IDR 791.8 trillion ($59.0 billion)[48.2 billion EUR].”177 “The Government of Indonesia
is encouraging the growth of the food processing industry.”178
Fruit processing data in Indonesia are not available in detail, except for the number of fruit and
vegetable industries (see the table below). This number was classified based on KLBI
(Klasifikasi Baku Lapangan Usaha Indonesia/Indonesian Standard Industrial Classification)
Codes. It refers to the International Standard Industrial Classification of All Economic
Ibid.
© Source: Euromonitor International, “Packaged Food in Indonesia”, 2015
176
Australian Trade and Investment Commission, “Agribusiness to Indonesia” available at:
http://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Indonesia/Industries/agribusiness
177
Food Export, “Indonesia Country Profile” available at: https://www.foodexport.org/get-started/countrymarket-profiles/southeast-asia/indonesia-country-profile#foodprocessing
178
Ibid.
174
175
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Tastes of Europe Indonesia – Market Entry Handbook
Activities (ISIC), ASEAN Common Industrial Classification (ACIC), and East Asia
Manufacturing Statistics (EAMS).
Import
Food processors commonly import primary
inputs, such as skim milk, whey powder, and
frozen meat rather than processed goods. Food
processors
generally
purchase
essential
complementary inputs/food
additive
like
flavourings, preservatives, emulsifiers, and
vitamins from a local agent or distributor because
they are used in smaller quantities and often have
limited shelf life. Some processors may choose to
act as an importer if they find a better-priced
alternative. “Post advises that primary ingredients
such as wheat, refined sugar, soybeans, dairy,
fresh fruit, and processed fruit have high demand
and are frequently imported.” 179
140000
EUR '000s
120000
100000
80000
60000
40000
20000
0
Imported value in Imported value in Imported value in Imported value in Imported value in
2011
2012
2013
2014
2015
China
United States of America
Brazil
World
European Union (EU 28) Aggregation
Figure 19: Imports of Preparations of Vegetables, Fruits and Nuts, 2011-2015180
Reports suggest that primary ingredients such as refined sugar, soybeans, dairy and processed
fruit have high demand and are frequently imported. Blending products used for enriching
products such as corn starch, potato starch, dehydrated potato, garlic powder, onion powder,
and chili powder are also in demand. Concentrates of fresh fruits and vegetables are also in
demand. 181
Food Export, “Indonesia Country Profile” available at: https://www.foodexport.org/get-started/countrymarket-profiles/southeast-asia/indonesia-country-profile#foodprocessing
180
© Trade Map, International Trade Centre, available at www.trademap.org.
181
Ibid.
179
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Tastes of Europe Indonesia – Market Entry Handbook
Export
In 2015, Indonesia exported EUR 126.4 million of processed fruit more than it imported. Top
export markets were the EU, particularly Spain, and the USA. Exports of processed fruit and
vegetables declined in 2013 but have since recovered.
300000
EUR '000s
250000
200000
150000
100000
50000
0
Exported value in Exported value in Exported value in Exported value in Exported value in
2011
2012
2013
2014
2015
United States of America
Netherlands
Spain
World
European Union (EU 28) Aggregation
Figure 20: Exports of Preparations of Vegetables, Fruits and Nuts, 2011-2015.182
182
© Trade Map, International Trade Centre, available at www.trademap.org.
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Tastes of Europe Indonesia – Market Entry Handbook
Main competitors on the market
Kikkoman Corp lead the market in processed
fruit and vegetables in Indonesia, accounting
for a retail value sales share of 21 percent in
2015. Owning the notable Del Monte brand,
the company is present in almost all
categories in shelf stable fruit and vegetables.
In the dominant shelf stable fruit category,
Del Monte led with a retail value sales share
of 24 percent in 2015. The Del Monte brand
is available in most modern grocery retail
outlets in the country and the brand name is
well-recognised for its quality. It is also
available in anumber of product variants,
making it favourable amongst consumers.
Distribution
As noted in the chapter on fresh fruit and
vegetables,
distribution
channels
in
Indonesia are not always efficient. This will
less effect on the market for processed fruit
and vegetables as they are less perishable.
Convenience stores are expanding rapidly in
Indonesia. Following the introduction of 7-Eleven in 2009, the stores have grown in popularity
among young consumers and students.
“Minimarkets, convenience stores, and other shops carry a wide range of convenience food
items such as readymade meals, bakery products, processed foods, ice cream, and beverages.
They sometimes carry a limited offering of fresh fruits and are open 24 hours. These stores are
found throughout Indonesia’s major urban centers and are also co-located with gasoline
stations, such as Bright, Circle K, Bonjour, Indomaret and Alfamart; and railway station.” 183
Franchising is driving the rapid growth of minimarkets and convenient stores.
Food Export, “Indonesia Country Profile” available at: https://www.foodexport.org/get-started/countrymarket-profiles/southeast-asia/indonesia-country-profile#foodprocessing
183
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3.8 Dairy Products
Strengths
Opportunities
•EU dairy products are recognised for
quality, responsibilty, and ethical
production
•Certain dairy products are aligned
with increasing trends in consumer
lifestyles
•Increasing consumer income
expected to coincide with greater
demand for imported dairy products
•Improving cold-chain distribution and
retail options, centered around core
markets
Dairy Outlook
Weaknesses
Threats
•Relatively low existing levels of dairy
consumption in Indonesia, even
against regional comparators
•Dairy products are considered pricesensitive and consumption drops
during slowed economic performance
•Greater consumer trust, awareness,
or familiarity with domestic dairy
products
•High regional competition from
markets in Australia, New Zealand,
and elsewhere
Consumption
Indonesian dairy production continues to grow, driven by new demand in Indonesia for dairy
products, led by an expanding middle class that is seeking new sources of high quality
proteins.184
The per capita milk consumption in the country is however significantly lower than the
consumption in other countries in the
region. In 2015, the consumption of
milk was 14.3 litres per capita
compared to 22.1 litres in the
Philippines, 33.7 litres in Thailand
and 50.9 litres in Malaysia. 185
However, milk consumption in
Indonesia has been growing more
rapidly than in its neighbouring
countries, with some dairy processors
reporting as much as 15 percent
increases in some product categories.
This is supported by Indonesia’s
growing middle class, which has
expanded significantly over the last
decade186.
U.S. Department of Agriculture, “Indonesia 2016 Dairy and Products Annual Report”, available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Dairy%20and%20Products%20Annual_Jakarta_In
donesia_10-17-2016.pdf.
185
Ibid.
186
Ibid.
184
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Tastes of Europe Indonesia – Market Entry Handbook
Consumer Profile
Dairy products, notably drinking milk products, are especially popular among consumers from
the middle class in Indonesia. The expanding middle class is therefore one of the key drivers
behind the increased dairy and milk consumption. In the past decade, the middle class grew
significantly to include 56.5 percent of the total population in 2010. It is expected to expand
further at 7 percent per year to include approximately 68.2 percent by 2020, according to World
Bank estimates.187
The main consumers of dairy products such as milk, flavoured milk and milk powder are babies
and young children. Milk has a longstanding reputation as the best substitute for breast milk.
These products are to a lesser extent popular amongst adults, who prefer milk derivatives such
as cheese, desserts and coffee whitener.
Consumer trends: Health conscious consumers and westernised diets
Dairy products are not a traditional part of the Asian diet; more than 90 percent of the Southeast
Asians are thought to be lactose intolerant. However, dairy products are gaining popularity and
have become regular products in the Indonesian households. There are several trends that have
contributed to this development.
The consumption of dairy and milk is influenced by the economic performance of a country
and the consumer purchasing power. In 2015, when Indonesia’s economic performance
weakened, and the purchasing power declined, consumers prioritised staple foods, such as
cereals, flour and rice. Especially the consumption of milk derivatives, such as desserts, chilled
snacks and coffee whiteners was affected by these developments. Similarly, consumption
patterns will change to include more animal products such as dairy when the economic situation
improves, and incomes rise. With a positive economic outlook for the coming years and
growing incomes, the Indonesian dairy consumption is expected to further increase.188
The increased health awareness among Indonesian consumers as a result of growing media
coverage has contributed to the increased consumption of drinking milk products, yoghurt and
sour milk products. Consumers, especially with a middle or higher income, are increasingly
becoming aware of the health benefits associated with these products. These products are an
important source of protein and calcium and can aid digestion. Furthermore, they are believed
to contribute to weight loss, improved skills and a slower ageing process, making these
products especially popular among female consumers.189
Another trend that positively impacts the dairy consumption in Indonesia is the introduction of
western-style food and dishes, such as pizza, pasta and cakes, which commonly use dairy
products. Products such as cheese and cream are increasingly being used in restaurants and
urban households to cook western-style dishes, but are also being used in street food, such as
toast, fried breaded banana, chips and pastries. This trend is most visible among middle and
Ibid.
U.S. Department of Agriculture “Indonesia Dairy and Products Annual 2016” available at:
http://www.fas.usda.gov/data/indonesia-dairy-and-products-annual-1
189
© Source: Euromonitor International, “Dairy in Indonesia”, 2015
187
188
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Tastes of Europe Indonesia – Market Entry Handbook
higher-income consumers in urban areas, who tend to be more receptive to western food than
consumers in rural areas.190
There are also some trends that could negatively impact the dairy consumption in Indonesia.
First of all, drinking milk products are expected to face increased competition from products
offering the same benefits as milk. In addition to this, several products, such as fortified powder
milk and flavoured powder milk increasingly have to compete with more convenient calcium
supplements in the form of tablets.191 Lastly, dairy-free, sugar-free and gluten-free products
are becoming more popular as a way to lower cholesterol and prevent chronic diseases. While
this trend is relatively new, the popularity of these products is expected to increase soon as a
result of increased health awareness.192
Challenges and opportunities for EU companies
The increased demand for dairy products, which is expected to further increase as a result of
more health-conscious consumers, westernised diets, a growing middle class and rising
incomes, provides important opportunities for EU companies that wish to expand their business
to Indonesia. While the current level of dairy consumption is relatively low, especially
compared to other countries in the region, there is enormous growth potential and the milk
consumption is expected to double over the next ten years.
However, there are some challenges for EU dairy producers that wish to export their products
to Indonesia. Indonesians, in fact, tend to prefer and trust local brands over foreign brands. As
it comes to the flavour, there is a preference for sweet tasting dairy beverages, for example
flavoured milk drinks, especially amongst children who dislike the taste of milk. Besides this,
© Source: Euromonitor International, “Dairy in Indonesia”, 2015
Ibid.
192
© EU-Indonesia Business Network, “Food and Beverage” available at:
http://www.flandersinvestmentandtrade.com/export/sites/trade/files/news/637150602213204/637150602213
204_1.pdf
190
191
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Tastes of Europe Indonesia – Market Entry Handbook
Indonesian consumers prefer small packaging due to its convenience. Companies that are
already established on the market have for example introduced smaller packaging of flavoured
milk to target children. Lastly, a trend towards dairy-free, sugar-free and gluten-free products
is developing in Indonesia. While this trend is relatively new, it could have an impact on the
consumption of dairy products in the future.
Offer
The domestic production of milk and dairy in Indonesia is relatively limited and as a result, the
country relies heavily on the import of dairy products. As the demand for dairy products is
further increasing, the Indonesian government acknowledges the growing gap between
production and demand. “The Indonesian Agriculture Ministry said that the country is for 60
percent dependent on milk imports (particularly from Australia and New Zealand) to meet
domestic demand. Currently, domestic milk demand in Indonesia stands at 3 million tons per
year. However, only 1.2 million tons can be produced domestically. In the future the situation
can worsen as domestic milk consumption grows 7 percent per year, whereas domestic milk
production grows by 3.3 percent per year only”.193
Domestic production
The domestic production of dairy and milk in Indonesia is limited. The dairy cow herd is
relatively small, estimated at 405,000 cows in 2015. While this constitutes an increase
compared to 2014, the number of dairy cows significantly decreased in recent years. Between
2011 and 2013, the dairy cow herd decreased by 16.7 percent from 420,000 to 350,000 cows.
The key drivers for this decrease were high beef prices, which led many farmers to sell their
dairy cows to slaughterhouses. However, the recent increase in the number of dairy cows is
expected to persist and the production of milk is expected to grow again.194
©Indonesia Investments, “Milk Industry of Indonesia Dependent on Imports to Meet Domestic Demand”,
June 2014: https://www.indonesia-investments.com/news/todays-headlines/milk-industry-of-indonesiadependent-on-imports-to-meet-domestic-demand/item2071?
194
U.S. Department of Agriculture, “Indonesia Dairy and Products Annual 2015” available at:
http://www.fas.usda.gov/data/indonesia-dairy-and-products-annual-1
193
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Tastes of Europe Indonesia – Market Entry Handbook
In 2014, 1.64 million litres of milk were produced in Indonesia.195 Despite the growth of largescale dairies, milk producers in Indonesia are mainly smallholders with usually no more than
five cows. Indonesia’s Ministry of Agriculture
(MOA) reports there are 122,750 dairy farmers
managing about three or four cows each on
average. These small-scale companies often join
dairy cooperatives that collect the milk to sell to
processing companies. Because of their
suboptimal production methods and the lack of
scaling technologies, their yields remain limited at
10 to 12 litres per cow per day and are of inferior
quality.196 In addition to these smallholders, there
are several large companies on the market that
continue to drive production growth. These
companies are expected to build new production
facilities and further expand milk production in
the coming years.197
These large-scale Indonesian dairies are mostly
concentrated on Java. Especially East Java has
seen significant growth of the milk and dairy
industry in recent years. At higher elevations, Java
proves to be the most suitable place for dairy
farming as dairy cows prefer a cool and dry
climate.198
Import
As a result of its limited quantity and quality of domestically produced milk and dairy and the
increased demand among Indonesian consumers, Indonesia heavily depends on the import of
milk and dairy products. However, the devaluation of the Indonesian Rupiah in recent years
has increased the costs of imports. In terms of quantity, the main imports concern powdered
and condensed milk.
195
196
197
198
Ibid.
Ibid.
Ibid.
World Bank Group, International Finance Corporation, “Dairy Industry Development in Indonesia”, available
at:
https://www.ifc.org/wps/wcm/connect/93f48d00470e3bf883ffd7b2572104ea/Dairy+Industry+Development2011.pdf?MOD=AJPERES
102
Tastes of Europe Indonesia – Market Entry Handbook
1%
Concentrated milk and cream
31%
Non-concentrated milk and cream
Cheese and curd
55%
Butter
Whey
Buttermilk, etc.
6%
6%
1%
Figure 21 Percentage Share of Total Dairy Imports (in terms of quantity)199
Indonesia mainly imports its dairy products from New Zealand and Australia due to these
market’s geographic proximity and longstanding trade relations, including the ASEANAustralia-New Zealand Free Trade Agreement. Another important trade partner is the USA,
which have increased their share in the total imports in recent years, especially for whey and
cheese.
For certain dairy products, including concentrated milk and cream, buttermilk and whey, the
EU Member States are significant trading partners. Milk powder and whey are the EU’s main
agri-food export products: In 2015, these products held a share of 27.1 percent of the total agrifood exports to Indonesia. In the past five years, the export of EU dairy products has slightly
increased in value from EUR 210 million in 2011 to EUR 233 million in 2015. However, in
2015 the overall EU dairy exports to Indonesia have declined in value compared to 2014, as
displayed in the figure below.200
199
200
© Trade Map, International Trade Centre, available at: www.trademap.org.
Ibid.
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Tastes of Europe Indonesia – Market Entry Handbook
250
200
150
100
50
0
2011
Milk powder and whey
2012
Butter
2013
Cheese
2014
2015
Fresh milk and cream, buttermilk and yoghurt
Figure 22 EU Exports of Dairy Products to Indonesia, 2011-2015201
Indonesia imports large quantities of concentrated milk and cream. In 2015, the value of the
import of these products was EUR 461 million. This demonstrates a decrease of 31.6 percent
compared to 2014, but only a decrease of 17.5 percent compared to 2011. An explanation for
this could be the recent devaluation of the Indonesian Rupiah and the resulting as-needed
approach of Indonesian importers. The main exporters of concentrated milk and cream to
Indonesia are New Zealand (with a 28.7 percent share in 2015), Australia (24.5 percent) and
the USA (18.4 percent). The main EU exporters are Belgium (8.2 percent), France (7.4
percent), Germany (3 percent) and Denmark (2 percent).202
In the past five years, the whey imports have increased significantly. In 2011 Indonesia’s
import of whey was valued at EUR 115 million which increased to EUR 168 million in 2015.
Indonesia mainly imports whey from France (28.4 percent of the total import in 2015), the
USA (19 percent) and Germany (12.4 percent). Other EU Member States that hold a significant
share in Indonesia’s whey import include Poland (11.6 percent), the Netherlands (7.2 percent)
and Ireland (4.4 percent).203
The import of cheese and curd has increased by 29.5 percent between 2011 and 2015 to reach
EUR 78 million in 2015. With a share of 58.4 percent in 2015, New Zealand dominates the
cheese and curds exports to Indonesia. Other main exporters to Indonesia are the USA (17.4
percent) and Australia (15.8 percent). The EU Member States hold relatively small shares: The
Netherlands exported for EUR 1.2 million (1.5 percent), Denmark for EUR 1 million (1.3
percent) and France for EUR 869 000 (1.1 percent). Italy is the only EU Member State which
has registered two GIs for cheese, but its exports were only worth EUR 796 000 (1 percent).204
Butter imports have also increased over the past five years: In 2015 the imports were valued at
EUR 73 million compared to EUR 62 million in 2011. Indonesia mainly imports butter from
New Zealand, which held a 71.9 percent share in 2015, Belgium (13.6 percent) and France (5.7
percent). The other EU Member States hold a significantly smaller share: The Netherlands (3.3
percent), Denmark (0.6 percent) and Germany (0.2 percent).205
European Commission, Agri-food Trade Statistical Factsheet: EU – Indonesia” available at:
http://ec.europa.eu/agriculture/trade-analysis/statistics/outside-eu/countries/agrifood-indonesia_en.pdf
202
© Trade Map, International Trade Centre, available at www.trademap.org.
203
Ibid.
204
Ibid.
205
© Trade Map, International Trade Centre, available at www.trademap.org.
201
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Tastes of Europe Indonesia – Market Entry Handbook
The Indonesian market for butter milk is significantly smaller and has faced a strong decline in
imports. Between 2011 and 2015, the import value of buttermilk decreased by 59.2 percent to
EUR 6.5 million. The main exporters are the Netherlands (42.2 percent share in 2015), New
Zealand (16.3 percent) and Australia (15.6 percent). Other EU exporters are France (8.9
percent), Sweden (4.9 percent), Germany (3.3 percent) and Denmark (2.7 percent).206
Export
The Indonesian export of dairy products is rather limited and is mainly focused on other Asian
countries, such as the Philippines, Singapore and Timor-Leste. Indonesia also increasingly
exports to African countries, including Nigeria and Algeria. The export of Indonesian dairy
products to the EU is very limited.
28%
33%
Concentrated milk and cream
Non-concentrated milk and cream
Cheese and curd
Butter
Whey
1%
1%
Buttermilk, etc.
35%
2%
Figure 23: Percentage Share of Total Dairy Exports (in terms of quantity), 2015207
In 2015, the main export product in terms of quantity was non-concentrated milk and cream,
which made up 35 percent of the total dairy export. The exports were valued at EUR 10.6
million 2015 and have remained relatively stable since 2011. The main importers of Indonesian
non-concentrated milk and cream are Singapore, Timor-Leste and Hong Kong.
The second most exported product in 2015 was buttermilk, which accounted for 33 percent.
The export of buttermilk nearly doubled between 2011 and 2015, from EUR 7.8 million to
EUR 12.7 million as shown in the chart above. Indonesia mainly exports to Papua New Guinea,
Timor-Leste and Viet Nam.208
The export of concentrated milk and cream constituted 28 percent of the total exports in terms
of quantity, but its value is the highest at EUR 20.3 million. The export of concentrated milk
and cream has nearly halved in the past five years. The main importers of these Indonesian
products are Nigeria, Algeria and Malaysia. The Netherlands and Denmark held a small share
206
207
208
Ibid.
Ibid.
© Trade Map, International Trade Centre, available at www.trademap.org.
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Tastes of Europe Indonesia – Market Entry Handbook
in the Indonesian export of concentrated milk and cream of respectively EUR 5,000 and EUR
4,000 in 2015.
Cheese and curd is exported in limited quantities and only made up 1 percent of the total dairy
exports in 2015. The exports were valued at EUR 2.1 million and increased with 20.9 percent
since 2011. Indonesia mainly exports its cheese and curd to the Philippines, Singapore,
Thailand and Malaysia.
The export of whey in terms of quantity only accounts for 1 percent of the dairy exports but
has increased significantly in the past five years. The value of whey exports increased by
1620.8 percent, moving from EUR 53,000 in 2011 to EUR 912,000 in 2015. The main
importers of Indonesian whey are Malaysia, Thailand, Singapore and Viet Nam. In 2015, the
Netherlands imported EUR 23,000 worth of whey from Indonesia, while Denmark imported
for EUR 10,000.209
Lastly, the export of Indonesian butter has dramatically decreased in recent years. In 2011,
Indonesia’s export was valued at EUR 3 million and decreased by 87.5 percent to EUR 381,000
in 2015. Indonesia mainly exports to the Philippines, Singapore, Nigeria and Hong Kong.
Main competitors on the market
The main players on the Indonesian market can be divided by the following product categories:
drinking milk products; yoghurt and sour milk products; cheese; and other dairy products,
including for example cream and coffee whitener.
The main competitors on the market for drinking milk products are Ultrajaya Milk Industry &
Trading Co., Frisian Flag Indonesia, Nestlé Indonesia, Indolakto and Fonterra Brands
Indonesia. Notably, three of these companies have a foreign origin: Frisian Flag originated in
the Netherlands, Nestlé originated in Switzerland and Fonterra Brands originated in New
Zealand. By investing in their distribution network, new products, marketing and promotions,
these five companies managed to hold a 82 percent retail value share in the market in 2015.210
In the market for yoghurt and sour milk products, the main player is Yakult Indonesia Persada,
which has its origin in Japan. In 2015, Yakult held a 39 percent value share in the market,
which Euromonitor attributes to its marketing and strong distribution network. Another
development that positively contributed to its strong market presence is the rapid development
of convenience stores in Indonesia. Another major player in the market is the French company
Danone.211
209
210
211
© Trade Map, International Trade Centre, available at www.trademap.org.
© Source: Euromonitor International, “Dairy in Indonesia”, 2015
Ibid.
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Tastes of Europe Indonesia – Market Entry Handbook
Kraft Ultrajaya Indonesia, from the American company Kraft Foods, is the leading company
in the market for cheese. In 2015, the
company held a value share of 61
percent. The brand’s popularity can be
attributed to an early entry in the
Indonesian market and a focus on both
above-the-line television advertisements
and below-the-line, personal marketing.
Another important player is the
Indonesian company Prochiz. In 2016,
Prochiz introduced fruit flavoured
cheese slices to target children.
In the market for other dairy products,
including for example condensed milk,
cream and coffee whitener, the main
market players are Frisian Flag (holding
a 36 percent value share), Indomilk and
Indolakto. An explanation for Frisian’s
Flag popularity is its longstanding
presence in Indonesia (Frisian Flag
products were first imported in 1922)
and its marketing efforts, both through
television and other media.
Specific customs and SPS
requirements
According to Food Law No. 18 of 2012, the import of food is only allowed if Indonesia’s
domestic production is insufficient or if the goods cannot be produced domestically. The
importer must therefore register with the Indonesian Ministry of Trade as an APIU for the
importation of goods for sale or APIP for the importation of goods for their own production.
Furthermore, importers are required to obtain an import approval (SKI) and provide a health
certificate for each shipment of goods. In addition to this, a halal certificate is also required.
The shipment and relevant documentation is then checked upon arrival by the Indonesian
Ministry of Agriculture.
The following documents may be required when exporting dairy products to Indonesia:
▪ Appointment as IT Animal and Animal Products;
▪ Import Permit for Drugs and Food;
▪ Import Approval for Animals and Animal Products;
▪ Registration of Foodstuffs;
▪ Free Sale Certificate;
▪ Certificate of Analysis;
▪ Certificate of Good Manufacturing Practice;
▪ Irradiation Certificate for Foodstuffs;
▪ Veterinary Health Certificate for Animal Products; and
▪ Halal Certificate.
For more information, please check the European Commission Market Access Database: here
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Tastes of Europe Indonesia – Market Entry Handbook
Challenges and opportunities for EU businesses
The widening gap between domestic production and the demand for dairy provides
opportunities for EU companies seeking to export their products to Indonesia. There is an
especially large market for the import of concentrated milk and cream and whey products, and
the import of cheese and curds has steadily increased in the past five years.
However, there are some challenges that should be considered by EU companies wishing to
export to Indonesia. First, there are several large companies that have firmly established
themselves on the Indonesian market. These companies, including Frisian Flag, Kraft, Ultra
Jaya and Yakult, have entered the market early on and now have a large market share.They
have invested heavily in marketing and advertisement to establish a good reputation and brand.
Additionally, they have made investments to set up a well-functioning distribution system for
their products. These companies hold a significant share in the market and EU companies
thinking about entering the market should keep in mind that they need a large marketing budget
to create brand awareness.212
Secondly, exporting dairy products to Indonesia is associated with a heavy bureaucratic burden.
As Indonesia only, imports products it cannot or insufficiently produces domestically, an
importer needs to register at the Ministry of Trade and obtain an import permit. Furthermore,
there are a number of certificates that are required in order to export to Indonesia, including a
Free Sales Certificate, Certificate of Good Manufacturing Practice, a Veterinary Health
Certificate for Animal products and a Halal Certificate. Most EU companies will not currently
have a halal certification and obtaining one in Indonesia could be especially burdensome and
resource consuming for smaller companies.213 Due to the large number of required approvals,
certificates and permits, it could be beneficial for EU companies to work closely with an
Indonesian importer.
Distribution
The lagging infrastructure development, along with Indonesia’s complicated geography,
complicates a quick and efficient distribution of dairy products to major urban centres. A cold
chain distribution system, essential for dairy products, is constrained by an underdeveloped
distribution system and the lack of refrigeration and electrical power in remote areas of the
country. As a result, most dairy producers work with a range of distributors and large
companies, such as Frisian Flag, Indolakto and Tigaraksa, set up their own distribution
company. Some Indonesian companies, including PT Sukanda Djaya, PT Indoguna Utama, PT
Tigaraksa and PT Wicaksana, provide national distribution services to local and imported dairy
suppliers. However, it is expected that as the demand for temperature-sensitive products
increases because of rising incomes, improvement to the distribution system will be made
accordingly.214
World Bank Group, International Finance Corporation, “Dairy Industry Development in Indonesia”, available
at:
https://www.ifc.org/wps/wcm/connect/93f48d00470e3bf883ffd7b2572104ea/Dairy+Industry+Development2011.pdf?MOD=AJPERES.
213
Office of the US Trade Representative, “Indonesia”, available at:
https://ustr.gov/sites/default/files/files/reports/2015/NTE/2015%20NTE%20Indonesia.pdf.
214
US Department of Commerce, “2016 Top Markets Report. Cold Chain Country Case Study: Indonesia”
available at: http://trade.gov/topmarkets/pdf/Cold_Chain_Indonesia.pdf; World Bank Group, International
Finance Corporation “Dairy Industry Development in Indonesia” available at:
https://www.ifc.org/wps/wcm/connect/93f48d00470e3bf883ffd7b2572104ea/Dairy+Industry+Development2011.pdf?MOD=AJPERES
212
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Tastes of Europe Indonesia – Market Entry Handbook
Challenges for EU products
In remote areas, there is limited or no availability of electricity and refrigeration. This is
especially true for small traditional retail shops. However, the expansion of modern retail
channels, such as supermarkets, hypermarkets and mini-markets, with refrigeration provides
the possibility for EU companies to sell their products in Indonesia.
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Tastes of Europe Indonesia – Market Entry Handbook
3.9 Processed Cereals
Strengths
Opportunities
•Well-attuned to growing consumer
health consciousness
•Good match with increasing
convenience-orientation of
Indonesian consumers
•Government policy increasingly
supports move towards healthy meal
options away from traditional, highfat foods
•Long shelf-life and ease of transport
to market
Cereals Outlook
Weaknesses
Threats
•Consumption opportunities mainly
restricted to middle- and upperclasses in Indonesia
•Linked to dairy consumption, which
can be more volatile depending on
macreconoimc performance
•Low existing EU market share and
uncertain growth prospects
•Strong presence of regional and
international competitors in the
Indonesian market
Processed cereals (HS 1904) include
products produced by roasting cereals,
such as breakfast cereals and cereal based
snack bars, and prepared cereals in grain
form such as oats.
Consumer trends
The traditional local breakfast in Indonesia
consists mainly of fried rice. Breakfast
cereals are comparatively expensive and
are a relatively new alternative. Although
most Indonesians still prefer to eat rice and
noodles as part of their daily diet, an
increasing number of Indonesians,
particularly those who live in the urban
environments, have started to consume cereals and bread. In fact, Indonesia has become the
world’s second-largest wheat importer and ranks among East Asia’s largest cereal importers.215
The primary target consumer groups are middle and upper-income consumers who are less
concerned about the relatively high unit price of breakfast cereals. Increasing consumer
disposable income in emerging economies of Asia Pacific is contributing to the growth in
demand for breakfast cereals. The rising popularity of Western culture in Indonesia has
reportedly helped to boost growth in breakfast cereals among the middle and upper income
215
©Indonesia Investments, “Urban Lifestyle Indonesia: Consumption Wheat & Bread Products Rises” available
at: https://www.indonesia-investments.com/news/news-columns/urban-lifestyles-indonesia-consumptionwheat-bread-products-rises/item5602?
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Tastes of Europe Indonesia – Market Entry Handbook
consumers. Milk consumption has also expanded and that tends to be an aspect that drives the
consumption of breakfast cereal. 216
More Indonesians, especially urban consumers have become accustomed to eating cereals with
milk for breakfast. One feature of the urban lifestyle is that many urban dwellers are
increasingly consuming easy-to-eat food products for breakfast, such as cereals and bread
products, as they rush from their homes to their offices. In a city like Jakarta people have to
leave early in order to make it on time at the office, given the severe traffic congestion and
therefore lack time to cook in the morning.217.
In addition to its primary role as a breakfast food, breakfast cereals products will continue to
be consumed by Indonesian children as a convenient snack. The market for cereal bars which
are rarely eaten at breakfast time, is also growing. Various companies manufacture instant
breakfast cereals which just require
hot water to be added and can
consumed at home or at a workplace.
These
products
are
gaining
significant
share
in
daily
consumption among students and the
busy service class because time and
cost saving.
Some producers have engaged in
targeted campaigns to promote the
eating of breakfast cereals to
consumers in the Indonesian market.
Nestlé, the market leader in breakfast
cereals in Indonesia, has engaged
employees to attend informal
women’s networking groups and
discuss the nutritional benefits
compared with the traditional local
breakfast of fried rice.
Cereal producers have been making
inroads into markets such as
Indonesia by promoting cereal as a
source of fiber, vitamins and
minerals, focusing especially on the
benefits for children. Breakfast
cereals are perceived as being
healthy, offering many physical
benefits to consumers. Healthy eating
is becoming more popular, younger consumers in particular have started to develop awareness
that the consumption of healthy food products is important to lead a more productive and higher
quality life. This may include the consumption of cereals for breakfast instead of fried dishes
with rice.
216
217
Ibid.
Ibid.
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Tastes of Europe Indonesia – Market Entry Handbook
Food manufacturers are responding to the demand for healthier products by providing products
with heightened vitamin content, healthier ingredients, lower sugar, cholesterol and fat content.
Consumers are increasingly aware about the benefits associated with breakfast cereals and
prefer low calorie and high carbohydrate/fiber content products, which are seen in light of
weight. This is expected to impact on product sales. Demand for more value-added cereals
containing whole wheat, high fiber content and other healthy ingredients is then expected to
further increase the sales of breakfast cereals in Indonesia.218
Another factor increasing the attractiveness of breakfast cereals may be government campaigns
that promote the consumption of other staple foods than rice. These campaigns have been
conducted in recent Indonesian history as the country struggles to produce enough rice to meet
domestic demand.219
A depressing influence in the market is price, which will have been exacerbated in 2015 by the
government of Indonesia’s decision to increase the price of fuel several times, a move which
further diminished consumer purchasing power and boosted the already high rate of inflation.
As a result, many Indonesian consumers became more cautious with regards to their spending,
with packaged food being no exception. Almost all packaged food categories recorded
marginally slower volume growth in 2015 than in 2014.220
The soaring price of fuel, rising regional minimum wages, increasing industrial electricity
tariffs and depreciation in the exchange value of the rupiah against the US dollar during 2015
piled considerable pressure on both production and distribution costs for packaged food. The
rising prices of raw materials for packaged food production such as flour, cooking oil and sugar
as well as packaging materials such as tin cans were also inevitable. Manufacturers therefore
had no choice but to increase unit prices in order to maintain margins. Furthermore, many
packaged food categories including breakfast cereal products are now sold in smaller
packaging formats to make them more affordable to lower-income consumers.
This said, the popularity of Western culture and the rising health consciousness of Indonesian
consumers is expected to continue to drive market growth in breakfast cereals over the next 5
years. The multiple uses for breakfast cereals will continue to drive demand over the forecast
period.
Cultural sensitivities
Indonesians traditionally offer food as a gift for many occasions (called “oleh-oleh” in
Indonesian). Oleh-oleh is often presented in the form of a snack food and is enjoyed by peoples
of all ages and income levels. Since the large majority of Indonesians are Muslim, most foods
are produced using methods and products that meet halal requirements.
U.S. Department of Agriculture, “Indonesia Food Processing Ingredients Update” available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20Processing%20Ingredients_Jakarta_Indon
esia_12-8-2015.pdf
219
© Indonesia Investments, “Urban Lifestyle Indonesia: Consumption Wheat & Bread Products Rises” available
at: http://www.indonesia-investments.com/news/news-columns/urban-lifestyles-indonesia-consumptionwheat-bread-products-rises/item5602
220
© Source: Euromonitor International, “Packaged Food in Indonesia”, 2015
218
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Tastes of Europe Indonesia – Market Entry Handbook
Challenges for EU products
To appeal to consumers in Indonesia, cereal makers must overcome many hurdles, including
little-to-no appetite for dairy milk in some regions and a cultural affinity for traditional hot
foods such as rice. Finally, it is important to bear in mind that despite local opportunities,
challenges remain when doing business on the Indonesian market. Indeed, existing partnerships
with neighbouring Asian countries as well as with Australia and New Zealand foster and
facilitate trade between those countries and Indonesia. In addition, the lack of available
infrastructures, such as a cold chain store system, harbours and other transportation, are also
challenges that may persist in the medium-term. Furthermore, regulations and additional
policies are also playing an important role in the food and beverage sector.
Alternatives for breakfast cereals including eggs, fruits, cereal bar, toasts and yoghurt are
expected to remain a key factor hindering industry expansion worldwide. These alternatives
are cheaper than the breakfast cereals. Other traditional breakfasts and fast food also affect the
sales of cereals. Yoghurt, an alternative to the breakfast cereals, is growing rapidly in the
industry. The availability of many local food stalls and ready-to-eat breakfast outlets, which
serve large amount of local breakfast delicacies at cheaper rates in major economies, is also
expected to negatively impact growth in near future.
Offer
Domestic offer
Two of the top three market leaders in breakfast cereals are domestic producers, suggesting a
strong presence of Indonesian companies in the market. Overall domestic production of
primary cereals has increased in recent yars.
Import
In 2015, Indonesia imported EUR 16 million of processed cereals. Imports of processed cereals
were increasing at a fast rate until 2013, when imports began to decline. Between 2013 and
2015 Indonesia’s imports of processed declined by 24 percent.
The leading exporter of processed cereals in 2011 was the Philippines; however, this changed
in 2013, when Malaysia took the overall lead.
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Tastes of Europe Indonesia – Market Entry Handbook
25000
20000
15000
10000
5000
0
Imported value in
2011
Imported value in
2012
Thailand
EU
Imported value in
2013
World
Imported value in
2014
Malaysia
Imported value in
2015
Philippines
Figure 24 Indonesian Imports of Processed Cereal, 2011-2015221
Less than 0.2 percent of Indonesia’s processed cereals are imported from the EU (EUR 306,000
in 2015). Germany is the leading EU exporter of processed cereals to Indonesia exporting EUR
159,000 in 2015, less than 0.1 percent of the total imports.222
Export
Indonesian exports of processed cereals have been in decline over the past 5 years, total
experts have reduced from over EUR 73 million to EUR 15 million in 2015.
80000
70000
60000
50000
40000
30000
20000
10000
0
Exported value in
2011
Philippines
Exported value in
2012
China
Australia
Exported value in
2013
Exported value in
2014
Exported value in
2015
European Union (EU 28) Aggregation
World
Figure 25 Indonesian Exports of Processed Cereals, 2011-2015223
The largest export market for Indonesian processed cereals by far is the Philippines, which
imports over 86 percent of Indonesia’s cereals. China has become a significant export market
221
222
223
© Trade Map, International Trade Center, available at: http://www.trademap.org/
Ibid.
Ibid.
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Tastes of Europe Indonesia – Market Entry Handbook
in recent years, in 2011 China only imported EUR 76,000, that jumped to EUR 2.7 million by
2015. Australia was the third biggest market in 2015, importing EUR 2.3 million. The EU
imported 1.3 million of Indonesian processed cereals in 2015.224
Mapping of main competitors
With 59 percent of retail value sales in 2015, Nestlé Indonesia continued to lead breakfast
cereals in Indonesia. The company owes its dominance to a wide brand portfolio, which
includes Koko Krunch and Milo – two of the leading brands in children’s breakfast cereals –
and Nestlé Corn Flakes, which
remained the leading brand in
flakes. In terms of taste and quality,
the company’s children’s breakfast
cereals are considered highly
suitable for Indonesian children and
remain popular.225
Among the leading packaged food
players in Indonesia, multinational
companies such as Nestlé Indonesia,
Heinz ABC Indonesia and Unilever
Indonesia have the strongest
footholds due to their early entry,
high consumer awareness of their
brands and products and the huge
budgets
allocated
by
these
companies to promotional activities
and research and development.
During 2015, however, the presence
of local companies such as Indofood
Sukses Makmur rose, largely due to
the tough economic conditions,
which prompted consumers to shift
towards more affordable packaged
food brands. In addition, these
players increased the pace of their
new product developments and
promotional efforts.226
Mayora Group
In 2011 Mayora Group ranked second after Nestlé for market share by value in breakfast
cerealsInitially founded in 1977 as a home biscuit business, it became a publicly listed company
in 1990 and then continued to grow, expanding its structure to cover the ASEAN region, having
acquired several marketing offices and production facilities. 227 Their cereal product range,
© Trade Map, International Trade Center, available at: http://www.trademap.org/
©Source: Euromonitor International, “Packaged Food in Indonesia”, 2015
226
Ibid.
227
© EU-Indonesia Business Network, “EIBN Sector Reports – Food & Beverage”, available at:
https://www.flandersinvestmentandtrade.com/export/sites/trade/files/news/637150602213204/63715060221
3204_1.pdf
224
225
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Tastes of Europe Indonesia – Market Entry Handbook
called Energen containes milk with cereal and oats, and is advertised as being ‘enriched with
complete nutrition.’
PT Santos Jaya Abadi
PT Santos Jaya Abadi holds a large market share by value in breakfast cereals. PT Santos Jaya
Abadi produces coffee and cereals. The company was founded in 1927 and is based in Jakarta
Pusat, Indonesia.
Distribution
2015 continued to witness a rapid expansion of modern grocery retailers’ outlets in Indonesia,
especially convenience stores, with leading convenience stores chains such as Indomaret,
Alfamart and Circle K even expanding into Indonesia’s smaller cities. This provided consumers
with easier access to a wider range of packaged food products in categories such as frozen
processed food, chilled processed food, dairy products and meal replacement, all of which
stimulated consumer spending on packaged food.228
228
© Source: Euromonitor International , “Packaged Food in Indonesia”, 2015
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Tastes of Europe Indonesia – Market Entry Handbook
3.10 Bread, Pastry, Cakes, Biscuits and other bakery products
Strengths
Opportunities
•Well-attuned to growing consumer
health consciousness, as well as
prevalance of gift-giving in Indonesia
•Good match with increasing
convenience-orientation of
Indonesian consumers
•Government policy increasingly
supports move towards healthy meal
options away from traditional, highfat foods which drives demand for
whole grain and other similar options
•Long shelf-life and ease of transport
to market for some products
Baked Goods
Outlook
Weaknesses
Threats
•Consumption opportunities mainly
restricted to middle- and upperclasses in Indonesia
•Fresh baked goods, which is highest
anticipated growth segment, requires
domestic production
•High competition from regional and
domestic producers
•Challenging path to expand appeal of
European products beyond upper
income consumers
Consumption
As a non-native crop, wheat-based products were not prominent in Indonesia’s agricultural
output or culinary traditions, where dietary staples and snacks were more likely to be derived
from rice and fresh fruits, respectively. The absence of domestic supply, however, has not
precluded strong and growing
demand in recent decades.
Evolution and forecast
Indonesia is now the world’s
second largest consumer of
wheat grain measured by
imports, which have risen
more than 60 percent over the
past decade. This import
volume reflects a growing
presence of domestic and
international
baked-goods
producers
in
Indonesia,
catering to greater demand
and
new
consumption
preferences. The supply-side
of the Indonesian market for wheat-based bakery products has evolved from a production
capacity of only 4 mills in 1998 to more than 31 in 2016, with proliferation of domestic and
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Tastes of Europe Indonesia – Market Entry Handbook
international producers and retailers to match. The domestic market for total sales of baked
goods in Indonesia exceeded EUR 2 billion for the first time in 2015.229
50.00
45.00
50
40.00
35.00
40
30.00
30
25.00
20.00
20
15.00
10.00
10
5.00
0
Annual expenditure per capita, euro
(2015 prices)
Annual consumption per capita,
kilograms
60
0.00
Thailand
Malaysia
Philippines
consumption
Singapore
Indonesia
EU
expenditure
Figure 26: ©Consumption and Expenditure on Baked Goods in Selected Markets.
Source: AIBI Market Report230
Despite this growth, consumption of baked goods in Indonesia remains below ASEAN peers
including Thailand, Malaysia and Singapore. This disparity is partly reflective of comparable
income gaps and is likely to close in coming years.
Per capita bread consumption in Indonesia showed a compound annual growth rate (CAGR)
above 6 percent between 2010 and 2015.231 Notably, during this same reference period, rice
consumption remained flat. This reinforces observations that baked goods - particularly various
breads - are increasingly being incorporated into Indonesia culinary preferences as side options
accompanying rice-based dishes rather than as a replacement for main dietary staples.
Increased consumption of baked goods is further driven but currently low prices for the main
input commodity, wheat, vis-à-vis those for rice and other food commodities.
Consumption criteria
With demand for non-traditional baked goods traceable to early contact with Chinese and
Dutch traders, contemporary consumption growth is based on widespread gains in disposable
income and purchasing power among an expanding middle class. For an increasing number of
Indonesians, in fact, baked products are becoming a new food staple.
Non-traditional food products such as baked goods like European breads and pastries are
considered an ‘aspirational’ product for cosmopolitan, globally-conscious consumers.
U.S. Department of Agriculture, “Indonesia Grain and Feed Annual Report 2017,” available at
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Grain%20and%20Feed%20Annual_Jakarta_Indone
sia_3-30-2017.pdf.
230
©International Association of Plant Bakers, “AIBI Bread Market Report 2012” ,July 2013, available at:
http://www.aibi.eu/wp-content/uploads/AIBI-Bread-Market-report-2012.pdf
231
© Trade Map, International Trade Centre, available at: www.trademap.org
229
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Tastes of Europe Indonesia – Market Entry Handbook
“Consumption of bread and cakes [in Indonesia] jumped almost 60 per cent in the past four
years, the Indonesia Bakery Association estimates.”232
At the same time, growing levels of income and the expansion of Indonesia’s middle class are
in part reflective of an emerging service-oriented economy, including in the professional
services sector. Whereas traditional Indonesian breakfasts are rice-based with meats and
vegetables often as hot meals, consumers - particularly those whose schedules are influenced
by working hours - are increasingly seeking practical alternatives. This is a particular driver
for growing consumer interest in breakfast and snack-type baked goods. Furthermore, the
increasing market for breakfast bakery products is particularly driven by demand growth from
younger consumers.
Growth is strongest and the demand for baked goods is most pronounced in Indonesia’s
emerging urban centres. Disposable incomes are typically higher in Indonesian cities than rural
areas still under development; there is also a conducive effect on distribution achieved by urban
agglomeration. Finally, as the sectoral employment structure of the Indonesian economy
reorients, so too does its gender composition complemented by the increasing labour force
participation by women. This has the effect of creating further time scarcities in terms of home
cooking and food preparation as women who traditionally filled such roles are increasingly
employed. For example, one illustrative statistic shows that the number of female civil servants
grew by nearly 3 percent CAGR between 2005 and 2015.
Nonetheless, the growth of baked-goods as a replacement for traditional staples - for example,
bread-based dishes - has not been as substantial. There have however been recent campaigns
by the Indonesian government to replace traditional staples - particularly those that are based
around meats, fried rice or other ingredients high in fat - with wheat-based options, particularly
breads.233
Despite increasing consumption of baked goods in Indonesia, the largest gains in this trend
have heretofore been realised by regional trading partners, with Malaysia and Thailand holding
leading import positions at a combined import value of over EUR 40 million in 2015. Baked
goods - particularly packaged bread and pastry products - from these Asian producers are
typically preferred by middle income consumers in Indonesia whereas imports of European
products are more likely to be identified for their higher quality as well as price.234
Nonetheless, the largest player in the Indonesian baked goods market remains the combined
output of local artisanal producers. It is estimated that there are more than 11,000 of these small
scale suppliers, who meet nearly half of domestic consumption and are well-matched with the
unconsolidated nature of Indonesian retail and distribution networks. These artisanal producers
typically specialise in the production of low-cost products, often targeted towards particularly
price-sensitive consumers estimated to comprise around 60 percent of Indonesia’s
population.235
The Economic Times, “Indonesians picking bread over noodles; baked goods consumption jumps 60% in 4
years”, May 2015 available at: https://economictimes.indiatimes.com/news/international/business/indonesianspicking-bread-over-noodles-baked-goods-consumption-jumps-60-in-4-years/articleshow/47380752.cms
233
©Indonesia Investments, “Urban Lifestyle Indonesia: Consumption Wheat & Bread Products Rises” available
at http://www.indonesia-investments.com/news/news-columns/urban-lifestyles-indonesia-consumption-wheatbread-products-rises/item5602.
234
© Trade Map, International Trade Centre, available at: www.trademap.org
235
U.S. Department of Agriculture, “Indonesia - Bakery Products Ingredient” available at
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Bakery%20Products%20Ingredient_Jakarta_Indone
sia_11-24-2010.pdf.
232
119
Tastes of Europe Indonesia – Market Entry Handbook
Consumer profiles
The predominance of artisanal
producers has nonetheless
been decreasing in recent years
with shares gained by some
consolidated
national
producers, such as Nippon
Indosari. Nippon Indosari is
the current market leader and
became a publicly listed
company in 2010; it has since
doubled its market share for
baked goods, being driven by
capital investments in a new
network
of
production
facilities
throughout
Indonesia. Distribution of this
category of freshly baked
goods
remains
mostly
concentrated around nodes
serving local or regional
markets.236
While
locally-established
producers such as the example
of Nippon Indosari market an
increasingly diverse market
offering, their permissive
conditions and economies of
scale are dependent on a broad
base
of
middle-income
consumers in Indonesia. European products will initially be most competitive among higher
income consumers likely to buy premium baked goods. The challenge in meeting this market
will be to supply premium products with sufficient shelf-life to be shipped from Europe, clear
customs, and undergo distribution in the Indonesian market without sacrifice to taste or quality.
Indonesia’s relatively young demographic structure, with 66 percent of the population between
15 and 64 years of age, further predisposes towards continued growth in baked goods
consumption. In general, in Indonesia younger consumers are more willing to eat baked
products than older generation that is still used to eating more traditional staple foods. Younger
consumers are not only to display more cosmopolitan culinary preferences but are furthermore
likely to seek baked goods for their convenience and conformity with ‘urban lifestyle’ image
perceptions.
236
Ibid.
120
Tastes of Europe Indonesia – Market Entry Handbook
Consumer trends
Reflecting the above, consumption demand for European baked goods will likely remain higher
for categories of products with longer shelf lives. Industry observers note further that whereas
European baked goods are well-positioned to capture the high-end of the market, Japanese and
Asian breads and pastries are the preferred choice of upper-middle income consumers whereas
local sweet and white breads are primarily consumed by the lower middle-income segment.237
At the disaggregated level, there is also considerable variance between the market shares of
leading EU Member States exporting baked goods to Indonesia. This is reflective of the high
degree of segmentation in the
Indonesian market; for example,
while French bakery and pastry
products are recognised as
premium and there is strong sales
growth for boutique outlets such
as PAUL, Paris Baguette and
Tous Les Jours, the value of
French exports under this
category was less than EUR
300,000 for 2015 - well behind
the leading European exporter,
Italy.238
Cultural sensitivities
While baked good products are
typically compliant with Islamic
food practices (halal), the
Government of Indonesia passed
Law No. 33 in September 2014
requiring all foods sold to obtain
halal
certification.
The
population of Indonesia is
predominantly Muslim and,
additional to meeting the legal
requirement, some producers
have catered to consumers in
Islamic markets by visibly
displaying halal certifications on product packaging.
Broadly, Indonesian consumers are receptive to international and European products - this
extends to include baked goods. Indonesian consumers are increasingly becoming sensitive
about food hygiene and product quality. Other things equal, this may have a beneficial effect
on Western, including European, products which are more likely to be perceived as reputable
and well-produced, and which will tend to be packaged baked goods - a category in which
consumers have higher confidence than unpackaged baked goods because Indonesiam
© EU-Indonesia Business Network “EIBN Sector Reports - Bakery Ingredients” available at
http://eibn.org/upload/EIBNSecRep2016_Bakery_ExecSummary-30347.pdf.
238
© Agriculture and Agri-food Canada, “Foodservice Profile - Indonesia” available at
http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/agriculture-and-foodmarket-information-by-region/asia/market-intelligence/foodservice-profile-indonesia/?id=1468950411582#c
237
121
Tastes of Europe Indonesia – Market Entry Handbook
consumers prefer to by specific items from the organized sector rather than from the traditional
sources.239
Challenges for EU products
The prevailing challenge for EU producers of baked goods seeking entry into the Indonesian
market is the distance involved and incumbency of local and competing Asian producers particularly bakeries in Malaysia and Thailand.
Establishing consumer bases in Indonesia presents challenges in that the market for freshly
baked goods is largely dominated by local, small scale producers. These artisanal producers
are able to produce more cheaply and on a much more local, direct level than consolidated
competitors, both international and nation-wide. Best performing baked goods originating from
Europe are likely to target niche premium or higher value consumption segments with good
access to freshness maintenance and distribution infrastructure. Leveraging recognition of
traditional quality of these European products will be imperative for the success of these
products.
Offer
The market for baked goods in Indonesia has been growing in recent years and continues to
show promise ahead; this growth has been derived from both increasing domestic production
as well as import levels.
Domestic offer
The domestic market for baked goods in Indonesia has been led by pastry sales, including both
packaged and unpackaged products. Sales of packaged pastries began to exceed those of
unpackaged baked goods around 2013 and the gap has continued to expand since. Likewise,
sales growth of packaged breads has marginally exceeded that of unpackaged products, and the
overall market for packaged bread products was 1.6 times larger in 2015.240
U.S. Department of Agriculture, Foreign Agricultural Service, “Indonesia Retail Foods – Retail Foods Update”
December 2016 available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-222016.pdf
240
© Source: Euromonitor International, “Baked Goods in Indonesia”, 2015
239
122
Total value of sales, euro
Millions
Tastes of Europe Indonesia – Market Entry Handbook
1,200
1,000
800
Bread
600
Cakes
Pastries
400
200
0
2010
2011
2012
2013
2014
2015
Figure 27: Sales Trends of Baked Goods by Selected Product Category in Indonesia
Source: Euromonitor241
Sales growth of baked goods in Indonesia is expected to accelerate during the next several
years, in tandem with a positive economic outlook for the foreseeable future. The size of the
domestic markets for pastries, cakes and bread are estimated to reach EUR 1.5 billion, EUR
550 million and EUR 250 million respectively by 2020.242 Low input commodity prices for
baked goods plus professionalization and expansion of the service sector are likely to have
further positive effect on total sales values for baked goods.
241
242
© Source: Euromonitor International, “Baked Goods in Indonesia”, 2015
Ibid.
123
Tastes of Europe Indonesia – Market Entry Handbook
Import
12
25
10
20
8
15
6
10
4
5
Thousands
30
Total volume of imports, tonnes
Total value of imports, euro
Millions
Indonesia’s imported valued of baked goods nearly doubled between 2010 and 2015 with a
final value of more than EUR 55 million during the final year of the reference period. The
single largest supplier of baked good products to the Indonesian market has consistently been
Malaysia. The combined export position of the EU-28 for baked goods to Indonesia has been
roughly on par with that of South Korea and has not yet benefitted from recent demand growth
during 2014 and 2015 in a significant way.243
Malaysia [volume]
Thailand [volume]
South Korea [volume]
EU [volume]
Malaysia [value]
Thailand [value]
South Korea [value]
EU [value]
2
0
0
2010
2011
2012
2013
2014
2015
Figure 28 Leading Exporters to Indonesia of Bread, Pastry Cakes, Biscuits and Other Bakers'
Wares244
Of the EU countries that export baked goods to Indonesia, Italy is the disproportionate leader
in terms of total volume and value. There is some variation in terms of the ratio between each
country’s exports by volume and value, or the de facto price per tonne. For example, Italian
and Spanish exports represented the lowest prices paid per tonne at EUR 2,750 and EUR 2,828,
respectively; UK exports of baked goods averaged the highest price paid per tonne, at EUR
6,566.245
Indonesia’s domestic bakery industries are highly dependent on imported ingredients, such as
wheat, which cannot be grown natively. This means that as the domestic industry expands and
suppliers consolidate, the cohort will remain more vulnerable to external supply shifts than
more mature producers able to draw upon domestic supplies. Imports of baked goods are
243
244
245
© Trade Map, International Trade Centre, available at www.trademap.org.
© Trade Map, International Trade Center, available at: http://www.trademap.org/
Ibid.
124
Tastes of Europe Indonesia – Market Entry Handbook
expected to remain relatively stable into the coming years, but the supply market will become
increasingly competitive and require demand growth to match.
Total exports, tonnes
0
100
200
300
400
500
600
700
Austria
Spain
Germany
Netherlands
Denmark
Sweden
Belgium
France
UK
Italy
Value
Volume
0
0.5
1
1.5
2
Total exports, euro
Millions
Figure 29 Leading European exporters to Indonesia of Bread, Pastry, Cakes, Biscuits and other
Bakers’ Wares.246
Export
Indonesia is a net exporter of baked goods, having supplied over 140,000 tons at a value of
almost EUR 400 million during 2015. Most of this product was delivered to regional trading
partners, such as China, Vietnam, Thailand, the Philippines, Malaysia and Singapore. Australia
and the United States were also significant receiving markets.247
Indonesia's Exports of Baked Goods (2011-2015)
Unit: EUR thousand
500000
400000
300000
200000
100000
0
2011
2012
2013
2014
2015
Export
Figure 30: Indonesia's Exports of Baked Goods (2011-2015)248
246
© Trade Map, International Trade Center, available at: http://www.trademap.org/
© Trade Map, International Trade Centre, available at www.trademap.org.
248
© Trade Map, International Trade Center, available at: http://www.trademap.org/
247
125
Tastes of Europe Indonesia – Market Entry Handbook
Competitors
The Indonesian market for baked goods is dominated by the collective largesse of independent,
artisanal producers, who comprise almost half of total supply. These suppliers typically operate
with very low turnover and overhead conditions, catering to highly-localised and price sensitive
consumers. However, this composition is shifting as artisanal production moves away from
home-based, cottage industry-style output towards professional artisanal bakeries catering to
new demand from an emerging upper-middle class.
Pangan Rahmat
Buana, 0.2
Pondan Pangan
Makmur Indonesia,
0.6
Maxim's International,
0.6
Satelit Sriti, 1.4
Marizarasa
Sarimurni,
0.7
Private Label, 16.7
Independent, 18
Inmarindotama, 0.3
Nippon Indosari, 11.1
Other, 8.4
Gandum Mas Kencana,
0.3
Artisanal, 45.8
Forisa Nusapersada,
1.5
Dunia Bintang Walet,
2.2
Swanish Boga
Industria, 0.6
Figure 31: Composition of Indonesian Baked Goods Market by Producer Shares (percent)
Euromonitor International249
The largest consolidated supplier in the Indonesian market is Nippon Indosari, a local firm
which first began production in the 1960s. Nippon Indosari is the only producer in Indonesia
with a nationwide distribution network and has been increasing its investment in production
facilities to match new domestic markets in recent years. The company’s strongest performance
is based on its pastry and snacks output, in which it regularly innovates to include new products
such as banana-and-chocolate-filled-buns, strawberry-filled dorayaki (filled-pancake style
product), pandan (spongecake), and so forth. Nippon Indosari and its suite of products is a
household name in Indonesia and models its business on mass distribution and regular
consumption by middle and lower-middle income households.250
Furthermore, private label baked goods are becoming an increasingly competitive option
appealing to price-sensitive consumers in Indonesia. These are offered by leading retailers such
249
250
© Source: Euromonitor International, “Baked Goods in Indonesia”, 2015
© Source: Euromonitor International, “Baked Goods in Indonesia”, 2015
126
Tastes of Europe Indonesia – Market Entry Handbook
as Carrefour and Hero Supermarkets, who are thereby able to realise existing distribution and
retail networks.
Internationally, EU producers face competition from Indonesia’s regional trading partners particularly Malaysia and Thailand - who further cater to middle and lower income consumers.
These products are generally preferred for their higher quality over local artisanal baked goods
- which are increasingly being eschewed for concerns over hygiene and quality of ingredients
- though they are not likely to reflect any traditional quality or reputation as often accorded to
European baked goods.
However, while international producers of baked goods outperformed EU suppliers in
Indonesia’s total imports, there remain no significant foreign retail suppliers by market share.
This differs from on-trade supply, where there is a growing presence of international food
service establishments, but these are mostly on a franchise basis and draw from production in
situ.
Customs and SPS import requirements
Most Favoured Nation (MFN) customs applied by Indonesia on imports of European baked
goods are typically bound at 5 percent, with some as high as 10 percent. Value Added Tax
(VAT) is levied on most imports into Indonesia at a rate of 10 percent.
Products in Indonesia are required to be labelled in Indonesian (Bahasa Indonesia), unless it is
not possible to find a suitable or similar translation in which case approval to omit Bahasa
Indonesia labelling must be obtained from the Attorney General. As aforementioned, all food
products imported into Indonesia must further obtain halal certification, regulated by the
Ministry of Health and the Ministry of Religious affairs. Specific requirements for food
products include a registration product number (ML number) supplied by the Indonesian Food
and Drug Control Agency; an expiration date; complete name and address of the importer;
certificate from an agency approved by the Indonesian Islamic Council.251
At the international level, there are several active complaints against Indonesia regarding SPS
related import restrictions. The Indonesian regulatory environment is generally unstable in a
manner that is either trade restrictive or discriminatory - or both - against international
producers.
SPS restrictions faced by EU exporters to Indonesia, as well as import formalities, documents,
and procedures are recorded via the EU Market Access Database (MADB).
Distribution
Indonesia remains an emerging market, therefore presenting different distribution structures
than may be familiar to European producers. With many areas of the Indonesian market still
under development, having a greater understanding of distribution and retail avenues is
essential for successful market entry.
251
Australian Trade and Investment Commission, “Tariffs and Regulations: Export Markets - Indonesia”
available at https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Indonesia/Doingbusiness/Tariffs-and-regulations.
127
Tastes of Europe Indonesia – Market Entry Handbook
Distribution structure and market share
The market for baked goods in Indonesia can be stratified into several distinct segments. First,
there is the cottage industry base of independent producers catering to localised markets
through home or informal production. These artisanal bakers typically sell directly or otherwise
figure into Indonesia’s expansive informal economy.
Distribution Shares of Store-based Retailers of Baked Goods in
Indonesia
100%
90%
Distribution share
80%
70%
Independent Small Grocers
60%
Food & Drink Specialists
50%
Supermarkets
40%
Hypermarkets
30%
Convenience Stores
20%
10%
0%
2010
2011
2012
2013
2014
2015
Figure 32 Distribution Shares of Store-Based Retailers of Baked Goods in Indonesia.252
In 2010, Indonesia was ranked as the third most fragmented grocery retail market in the world
which, compounded by geography, population distribution, lacking infrastructure, and the
relatively short shelf-life of most baked goods, present challenges for the development of
modern trade and distribution channels. The ‘recreation’ function of modern outlets like
supermarkets and hypermarkets is important in Indonesia, as 79 percent of consumers are
visiting supermarkets/hypermarkets with their families. Jakarta’s growing market culture is
encouraging this trend further. However, at the same time, more than 65 percent of consumers
prefer to visit traditional markets. 253
Separately, Nippon Indosari has had noted success expanding in recent years through rollout
of a rickshaw delivery service for its baked goods. These vendors are integrated within the
corporate structure of Nippon Indosari and combine retail and distribution in one service.
Following direct artisanal production and sale, the second largest consumer base in Indonesia
is through store-based retailing both on- and off-trade. Off-trade retailing predominantly caters
to routine middle-income consumers, with the largest outlet under this category being
convenience stores after gaining shares over independent small grocers in 2015. Still this share
of distribution is surpassed by speciality bakery shops, both as food service suppliers as well
as boutique retailers.
© Source: Euromonitor International, “Baked Goods in Indonesia”, 2015
U.S. Department of Agriculture, Foreign Agricultural Service, “Indonesia Retail Foods – Retail Foods Update”
December 2016 available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-222016.pdf
252
253
128
Tastes of Europe Indonesia – Market Entry Handbook
Major off-trade distributors include Carrefour Indonesia and Hero Supermarket, increasingly
so through their private label
offerings.
On-trade, a number of notable baked
goods suppliers have emerged in
Indonesia in recent years, including
many specialising exclusively in
bread, pastries, cakes, and other
bakery products. Among these,
BreadTalk is recognised as an industry
leader through its well-based
understanding of the domestic market
and
consumer
preferences
in
Indonesia. It entered the market in
2003 and has since been followed by
the entry of new competitors including
Tous Les Jours (South Korea) and
Paul (France).
Challenges for EU products
Distribution remains one of the
foremost challenges for European
baked goods suppliers to Indonesia, as
obstacles faced by local and regional
producers are only likely to be
amplified for those originating from
the EU. European entrants should
develop well-defined distribution plans and identify strong import-partners to ensure the
feasibility of their product in the Indonesian market, including compliance with SPS
requirements, expedient customs clearance, and fast delivery to the end retailer or consumer.
By some measures, ease of doing business in Indonesia has improved in recent years. There
remain, however, several types of in jure and de facto trade barriers which create nonnegligible costs to foreign suppliers. 254 Indonesia ranked below the regional average and
comparators including Malaysia, the Philippines, and China during the World Bank Doing
Business 2016 assessment. Another important factor in distribution, import costs, revealed
mixed results compared to the regional average.
World Bank, “Doing Business 2016: Economy Profile 2016 - Indonesia” available at
http://www.doingbusiness.org/data/exploreeconomies/indonesia.
254
129
Tastes of Europe Indonesia – Market Entry Handbook
450
Time in hours | Cost in euro
400
350
300
250
Indonesia
200
East Asia & Pacific
150
100
50
0
Time
Cost
Border Compliance
Time
Cost
Documentary Compliance
Figure 33 Comparing Import Costs in Indonesia with the East Asia & Pacific Region.
World Bank
Administrative barriers to entering the Indonesian market are further complicated by deficient
transportation infrastructure once a product is admitted. This particularly applies to ensuring
food quality and security preservation while in transit; for example, cold and dry logistics,
warehousing and delivery options.
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Tastes of Europe Indonesia – Market Entry Handbook
3.11 Chocolate and Derived Products and Confectionery
Strengths
Opportunities
•Increasingly suited to multiple giftgiving occasions in Indonesia
•Broad-based appeal among
Indonesia's large young consumer
segment
•Relatively long shelf-life and ease of
transportation to market with limited
refrigeration or cold chain
requirements
•Increasing awareness of EU product
quality relative to regional and
domestic competitors
Chocolate &
Confectionary
Outlook
Weaknesses
Threats
•Price sensitivity restricts sales
primarily to middle- and upperincome consumers
•Most of chocolate and confectionary
sales take place in smaller or
traditional retailers which are harder
to reach for exporters
•Low existing EU market share and
uncertain growth prospects
•High competition and local consumer
brand loyalty to domestic producers
Consumption
Indonesian chocolate and chocolate confectionery consumption has grown considerably over
the past years; however, it is still not comparable to chocolate consumption in Europe.
Indonesians are now eating about 0.5-0.6 kg of chocolate per year and according to forecasts
chocolate consumption in Indonesia is
on the rise and may grow by 25
percent over the next five years. 255
Sugar confectionery consumption is
even
lower
than
chocolate
confectionery
consumption.
Chocolate consumption in Indonesia
is quite low compared to Europe
mainly
because
chocolate
is
expensive in Indonesia. “For most
Indonesians, chocolate is considered
a luxury ".256
According to a recent survey among
chocolate or sugar confectionery
variance,
“among
any
sugar
©Indonesia Investments, “Challenges and Opportunities in Indonesia’s Cocoa Industry”, May 2015, available
at: https://www.indonesia-investments.com/news/todays-headlines/challenges-and-opportunities-in-indonesias-cocoa-industry/item5569?
256
The Foodie Magazine “Indonesia’s Love for Chocolate”, April 2016, Available at:
http://thefoodiemag.com/indonesias-love-for-chocolate/
255
131
Tastes of Europe Indonesia – Market Entry Handbook
confectionery variance, chocolate and regular candy bar are the most frequently consumed
product among consumer. Chocolate lead the market by being regularly consumed by 37 per
cent respondent, followed by candy bar by 31per cent respondent. Moreover, lozenges and
herbal candy are consumed by 13 per cent respondent, as well as gum by 12 per cent
respondent. “ 257
Chocolate consumption is, however, expected to rise rapidly, as the Indonesian middle class is
becoming more affluent.
Consumer Profile
Due to the rise of the middle class and growing health awareness, Indonesian consumers have
more capacity to pay extra for better quality products. A more educated and middle-to-high
income society tends to pick organic and healthy foods/beverages, even though it costs them
more than usual. However, organic chocolate and artisanal chocolate are not yet very popular
in Indonesia and traditional locally produced chocolates still lead the market.
Higher numbers of Indonesian teenagers and young adults are purchasing chocolate
confectionery confectioneries not only as a snack or guilty pleasure but also as a gift for special
occasions such as birthdays, Valentine’s Day and Christmas. A number of consumers also
include chocolate confectionery confectioneries in goody bags at children’s parties and in
parcels which are offered to business partners and relatives during festive periods such as Hari
Raya Idul Fitri, Christmas and New Year.
Jakpat Blog, “The Sweet Tooth: Candy & Chocolate Consumption Survey”, available at:
https://blog.jakpat.net/the-sweet-tooth-candy-and-chocolate-consumption-survey-report/
257
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Tastes of Europe Indonesia – Market Entry Handbook
Consumer Trends
According to recent market studies, it has been projected that the Indonesian consumer will
increase in number, due to the growth of the young and urbanised population and
improvements in income and consumer confidence. The UN also forecasts that two-thirds
of Indonesian consumers will be urbanised by 2050, this means that the consumption for
chocolate and confectionery will also rise considerably in the future.
Adapting to local market trends is the key for succeeding in the chocolate and confectionery
market in Indonesia. European companies should consider adapting their packaging style and
product characteristics to meet the needs of the local consumers. For instance, many Asian and
Indonesian consumers tend to prefer products that are sweeter and that are available in smaller
packaging.
More Indonesian consumers are expected to purchase chocolate and confectionery not only as
a snack but also as a gift for special occasions such as birthdays, Valentine’s Day and
Christmas. Goody bags offered to children at birthday parties and the gift bags offered to
friends and associates during festive periods will also contain various chocolate confectionery
products. In addition, with many brands being available in many different product and
packaging formats, chocolate confectionery will continue to be the most favoured indulgence
product for consumers of all ages and almost all income levels.258
Challenges for EU Products
Generally, the majority of Indonesians continue to show preference for brands that they
perceive to be local, over those that they think are foreign. Consumers trust Indonesian
companies and take pride in using local brands. They believe that Indonesian companies
understand local consumers and provide better value for money in comparison to foreign
brands. This means that the European chocolate and confectionery producers will be at a
disadvantaged position when competing with the local chocolate and confectionery producers,
as the consumers will prefer local products.
Entering the Indonesian market and convincing customers could be even more difficult as
Indonesians are brand-loyal, and most consumers are not actively looking to switch brands.
Market entry can thus be very challenging for the new and lesser known European chocolate
and confectionery brands.
258
© Source: Euromonitor International, “Chocolate and confectionary in Indonesia”, 2015
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Tastes of Europe Indonesia – Market Entry Handbook
Another challenge for the European
products is the fact that chocolate
and confectionery in Indonesia are
still
expensive.
“For
most
Indonesians,
chocolate
is
259
considered a luxury " . It costs
around IRD 7,000 (EUR 0.5) to IRD
8,000 (EUR 0.55), to enjoy
chocolate in the form of bars in
supermarkets.
Offer
Domestic offer
Indonesia is the third largest cocoa
producer in the world, but it is
exporting most of its cocoa without
processing it locally. In 2014,
Indonesia produced 285,000 tons of
chocolate and confectionery worth
of IRD 22.85 trillion (EUR 1.54
billion). This was almost 5 percent
more than Indonesia produced in
2013. 260 According to the USDA
Foreign
Agricultural
Service,
Indonesia’s
chocolate
and
confectionery
production
is
expected to grow around 4 percent
on a yearly basis until 2019.261
Import
Chocolate and confectionery make up around 2 percent of Indonesia’s total imports. In 2015,
Indonesia imported chocolates and chocolate confectionery for the import value of USD 108
million (EUR 92 million) and the imports mainly came from the other South-East Asian
countries including Malaysia and Singapore, but also from China and India.262 During the
same year, Indonesia also imported sugar confectionery for the import value of USD 53,5
million (EUR 45,6 million) and the imports came mainly from China, Malaysia and
Thailand.263
The Foodie Magazine “Indonesia’s Love for Chocolate”, April 2016, Available at:
http://thefoodiemag.com/indonesias-love-for-chocolate/
260
U.S. Department of Agriculture,“GAIN Report” available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20Processing%20Ingredients_Jakarta_Indon
esia_12-8-2015.pdf
261
Ibid
262
AJG Simoes, CA Hidalgo. The Economic Complexity Observatory: An Analytical Tool for Understanding the
Dynamics of Economic Development. Workshops at the Twenty-Fifth AAAI Conference on Artificial Intelligence.
(2011), available at: https://atlas.media.mit.edu/en/visualize/tree_map/hs92/import/idn/show/1806/2014/ ,
use of data available under Share Alike Creative Commosns Licese, found Here:
https://creativecommons.org/licenses/by-sa/3.0/
263
Ibid.
259
134
Tastes of Europe Indonesia – Market Entry Handbook
Indonesia's Imports of Chocolate and Confectionery by Quantity (20112015)
Unit: Tonnes
20000
15000
10000
5000
0
2011
2012
2013
2014
2015
Import
Figure 34: Indonesia's Imports of Chocolate and Confectionery by Quantity (2011- 2015)264
The EU as a whole also plays a considerable role in Indonesia’s chocolate and confectionery
imports. EU export of chocolate and confectionery products have gradually grown over the
past 5 years and constituted 2.6 percent of overall EU agri-food exports in 2015.265
Indonesia's Imports of Chocolate and Confectionery from the EU by
value (2011-2015)
20
EUR Mio
15
10
5
0
2011
2012
2013
2014
2015
imports
Figure 35: Indonesia's Imports of Chocolate and Confectionery from the EU by Value, 20112015266
© Trade Map, International Trade Center, available at: http://www.trademap.org/
European Commission, DG for Agriculture and Rural Development, “Agri-Food Statistical Factsheet, EUIndonesia” https://ec.europa.eu/agriculture/sites/agriculture/files/trade-analysis/statistics/outsideeu/countries/agrifood-indonesia_en.pdf.
266
Ibid.
264
265
135
Tastes of Europe Indonesia – Market Entry Handbook
Export
Chocolate makes up around 2.6 percent of Indonesia’s total exports. In 2014, Indonesia
exported chocolates and confectionery amounting to USD 30,6 million (EUR 26 million).
These exports went mainly to other South-East Asian countries including the Philippines,
Thailand and Malaysia, as well as to South Korea and Singapore. 267 In the same year,
Indonesia also exported sugar confectionery for the export value of USD 111 million (EUR
94,6 million) and the exports went mainly to the Philippines, Thailand and Vietnam.268
Indonesia's Exports of Chocolate and Confectinery by Quantity
(2011-2015)
Unit: Tonnes
25000
20000
15000
10000
5000
0
2011
2012
2013
2014
2015
Exports
Figure 36: Indonesia's Exports of Chocolate and Confectionery by Quantity (2011-2015)269
The European Union is also an important trading partner for Indonesia with respect to its
exports of chocolate and confectionery. Indonesian exports to the EU have gradually increased
over the past five years.
AJG Simoes, CA Hidalgo. The Economic Complexity Observatory: An Analytical Tool for Understanding the
Dynamics of Economic Development. Workshops at the Twenty-Fifth AAAI Conference on Artificial Intelligence.
(2011), available at: https://atlas.media.mit.edu/en/visualize/tree_map/hs92/import/idn/show/1806/2014/ ,
use of data available under Share Alike Creative Commosns Licese, found Here:
https://creativecommons.org/licenses/by-sa/3.0/
268
Ibid.
269
© Trade Map, International Trade Center, available at: http://www.trademap.org/
267
136
Tastes of Europe Indonesia – Market Entry Handbook
Indonesia's Exports of Chocolate and Confectionery to the EU by Value
(2011-2015)
7
6
EUR Mio
5
4
3
2
1
0
2011
2012
2013
2014
2015
export
Figure 37 Indonesia's Exports of Chocolate and Confectionery to the EU by Value, 2011-2015270
Mapping the Competition
The Indonesian chocolate
and confectionery market
is dominated by local
chocolate
and
confectionery producers
and it is quite difficult for
the foreign products to
succeed in the Indonesian
market.“Nestle, Cadbury's
owner
Mondelez
International, Mars and
Ferrero together hold just
one-tenth of a $1 billion
[89.5 million EUR] market
led
by
homegrown
darlings Delfi and Mayora
271
Indah”.
Local
chocolate brands such as
Ceres (produced by the Singaporean company Petra Foods) and Mayora are the most popular
confectionery and chocolate brands in Indonesia. Amongst sugar confectionery, a foreign
company Perfetti Van Melle has recently managed to become one of the leading confectionery
producers.
European Commission, DG for Agriculture and Rural Development, “Agri-Food Statistical Factsheet, EUIndonesia” https://ec.europa.eu/agriculture/sites/agriculture/files/trade-analysis/statistics/outsideeu/countries/agrifood-indonesia_en.pdf.
271
Jakarta Globe, “Global Chocolatiers Dwarfed in Indonesia as Local Champions Dictate Taste“ available at:
http://jakartaglobe.beritasatu.com/business/global-chocolatiers-dwarfed-indonesia-local-champions-dictatetaste/
270
137
Tastes of Europe Indonesia – Market Entry Handbook
Ceres (produced by a Singaporean company Petra Foods)
Ceres continued to lead chocolate confectionery in 2015 with a retail value share of 52 percent.
Ceres markets several leading chocolate confectionery brands, including Silver Queen, Silver
Queen Chunky and Delfi (tablets); Top (second leading count line brand); Delfi and Van
Houten (standard boxed assortments); and Cha Cha and Chic Choc (bagged selflines/softlines).
The target audience of Silver Queen comprises teenagers and young adults, with the brand
being positioned as a product that is suitable for enjoyment while socialising with friends or
loved ones. Thanks to its wide product coverage, Ceres maintained a clear lead in chocolate
confectionery in Indonesia in 2015.272
Mayora
The MAYORA group is one of the most renowned names in the Fast-Moving Consumer Goods
industries (FMCG). Initially founded in 1977 as a home biscuit business, it became a publicly
listed company in 1990 and then continued to grow, expanding its structure to cover
the ASEAN region, having acquired several marketing offices and production facilities.
Recently, the company was awarded the “Best Manufacturer of Halal Products Award” in the
sectors of Biscuit and Wafer, Candy and Chocolate, Cocoa, Coffee and Health foods. The
MAYORA group specializes in biscuits, candy, wafer and chocolates, nutrition, coffee, and the
brands Torabika Café & Corner. For more information, see Mayora website.
Perfetti Van Melle
In 2015, Perfetti Van Melle Indonesia extended its leadership in sugar confectionery, posting
a value share of 23 percent. The company markets a wide range of sugar confectionery products
in Indonesia, including the popular brands Mentos, Alpenliebe, Fruit-tella, Marbels, Golia,
Chox and Chupa Chups. The company invested heavily in new product development as well
as marketing and promotion to maintain its leadership of the category. It also widened its
distribution coverage to reach traditional retail outlets in remote rural areas.273
Challenges to the European Products
One challenge that European producers may encounter is Indonesia’s new Halal certification
requirement, as most European chocolate and confectionery producers do not currently have
the halal certification and, as such, should apply. This could be particularly burdensome and
resource consuming for the smaller companies and small artisanal chocolate or confectionery
producers.
272
273
© Source: Euromonitor International, “Confectionary in Indonesia”, 2015
© Source: Euromonitor International, “Sugar confectionary in Indonesia”, 2015
138
Tastes of Europe Indonesia – Market Entry Handbook
Another challenge that faces the major chocolate and confectionery exporters in Indonesia,
such as Mondelez International and Nestlé, is the general difficulty of gaining popularity in the
market. As mentioned above, Indonesian consumers prefer local brands over foreign brands.
They are very loyal to local brands that they have grown accustomed to and are not very keen
on trying out new and lesser-known brands. “Nestle's Gumilar[Nestle Indonesia confectionary
business manager Rully Gumilar ]said his firm is trying to find a recipe that balances its global
quality standards with local preferences - "the holy grail of the chocolate category" - as well
as
stepping
up
product
launches
and
marketing”
274
.
This could be more difficult for the smaller European chocolate and confectionery companies
that would face resource constraints. Improving the quality of products, trying to apply for
Indonesian organic label, and getting halal certification are the potential steps that could help
companies succeed in the Indonesian market.
The Director of the Mondelez International has noted that Indonesian consumers are extremely
price sensitive even though the middle class is becoming more and more affluent. Consumers
would choose the similar product that costs less. “For example Delfi's Take-it chocolate
fingers, for example, retail at a Jakarta mini-market for 5,500 rupiah ($0.42), around 8 percent
less than Nestle's KitKat”, 275which is well loved by Indonesia’s consumers. This also means
that small artisanal chocolate brands from Europe might just not succeed in the market, simply
The Star, “Big four global chocolatiers hold 10 percent market share” available at:
http://www.thestar.com.my/business/business-news/2016/09/13/big-four-global-chocolatiers-hold-10-pctmarket-share/
275
Ibid.
274
139
Tastes of Europe Indonesia – Market Entry Handbook
because the Indonesian consumers would deem these products too expensive. However, as
mentioned above, the Indonesian consumers are also becoming more health-conscious and
European SMEs will most likely find good opportunities on Indonesian chocolate and
confectionery market soon.
Distribution
An increasing number of upper and middle-income consumers in Indonesia helps the modern
market to grow at a fast pace. Now almost all big cities in Indonesia have at least one to three
shopping malls, while the small convenience stores like Alfamart and Indomaret can be easily
found in every region, both in big cities and in small towns.
Smaller working families in Indonesia care more about food safety and quality and are health
conscious. Thus, this segment of the population prefers to purchase groceries including foods
like chocolate and confectionery in hypermarkets, supermarket, or convenience stores since the
quality and safety of foods in these modern markets can be better guaranteed than those in wet
markets.
Big
supermarkets
and
hypermarkets
are
also
important outlets for European
products and the most popular
and
widely
spread
supermarkets in Indonesia
include Carrefour, which has
50 % of the market share,
Hypermart, with 25% of
market share and Giant with
20% of the market share. 276
Popular supermarkets also
include Super Indo, Food Mart
and Hero.
Even though ‘off’ distribution
channels are more popular for
chocolate and confectionery
products, there is also a
considerable market for ‘on’
distribution channels. As
Indonesian consumers are
becoming more affluent,
dining in restaurants is also
becoming
increasingly
popular. “The increasing busy
and hectic lifestyle in urban areas is one of the factors for this high consumption. People have
U.S. Department of Agriculture, Economic Research Service, “Indonesia’s modern retail sector” available at:
https://www.ers.usda.gov/webdocs/publications/44684/28843_eib97_summary.pdf?v=41304.
276
140
Tastes of Europe Indonesia – Market Entry Handbook
less time to do household work, includes cooking; hence, choosing restaurants or home
delivery is convenient option to enjoy the daily activities.”277 This means that chocolate and
confectionery exporters have also increasing opportunities to sell their products for restaurants.
Here chocolate confectionery producers have an advantage as chocolate confectionery is
typically more often consumed in restaurants than sugar confectionery. Pipiltin Cocoa,
Chokelat Monggo and Hyde are amongst the top-rated restaurants that serve chocolate and its
derived products. For sugar confectionery, small kiosks near to consumers’ homes will still be
the best-selling outlets.
277
Michal Wasserbauer, “Restaurant market experiencing great growth opportunity in Indonesia” , Cekindo,
June 2016, available at: http://www.cekindo.com/restaurant-market-experiencing-great-growth-opportunityin-indonesia.html
141
Tastes of Europe Indonesia – Market Entry Handbook
3.12 Honey
Strengths
Opportunities
•Well-attuned to growing consumer
health consciousness
•Domestic demand expected to
outpace local supply
•Honey seen as both nutritional and
even considered for medicinal
qualities in Indonesia
•Long shelf-life and ease of transport
to market
Honey Outlook
Weaknesses
Threats
•Relatively expensive product unlikely
to be regularly purchased by most
consumers
•Main growth in consumption
expected to come from toiletry and
other products less suited to high
quality EU products
•Low existing EU market share and
uncertain growth prospects
•Strong presence of regional and
international competitors in the
Indonesian market, including Japan,
United States, and New Zealand
Consumption
Indonesia has the third largest tropical forest in the world
after Brazil and Zaire. With 910,100 square kilometers of
forest area, Indonesia’s forest land comprises 50 percent
of the country’s land area.278 This makes the country full
of natural resources, including natural honey.
According to information retrieved from the Association
of Indonesia Beekeeping, there are several types of local
bees in the country which produce honey, with the most
farmed ones being Apis Indica, Apis Mellifera, and Apis
Cerana.
The local demand for honey has grown tremendously over
the past few years, not the least because of increasing
public awareness of its health benefits. Indonesia
produces about 5000 tons of honey per year and it is
importing about another 1500 – 1800 tons of honey on a
yearly basis.279
Given its vast natural and human resources, as well as
growing internal demand, the potential for Indonesia's honey production is enormous. However,
there are several challenegs which must be addressed before the industry can catch up to its
Asian countries. Key challeges include:
278
279
World Bank, “Forest area, Indonesia”, available at: http://data.worldbank.org/indicator/AG.LND.FRST.K2
© Trade Map, International Trade Center, available at: http://www.trademap.org/
142
Tastes of Europe Indonesia – Market Entry Handbook
-
-
-
Production: Even though 9 out of 11 species of high-quality bees can be found in
Indonesia, the high humidity of the country negatively affects the production quantity.
In addition, the provision of beekeeping production facilities in the form of colonies,
queen bees, equipment and drugs for eradication of pests is still limited.
Marketing: Despite increasing public awareness of the honey’s benefits, honey is still
generally perceived to be a medicine.
Industry structure: Most beekeepers and honey producers are local SMEs, which lack
the resources to organise a large-scale production and distribution. There is a lack of
big organisations or companies that unite and organise smaller beekeepers under a
single voice.
Investment and financial issues: Banks are generally not willing to provide credit in
the business of beekeeping.
R&D: Unlike China, Thailand and Vietnam, Indonesia lacks integrated and wellcoordinated government supported in R&D programmes to develop and upgrade
production, processing and marketing activities. Local universities and other scientific
institutions do not generally deal with beekeeping activities.
All the above issues are de facto hindering the development of local honey production, opening
the door to imports of honey to meet the demand.
Consumer Profile: Health Concerns
The improvement in the category’s performance is likely to be driven by middle-income and
upper-income consumers, who are becoming increasingly aware of the importance of healthy
foods. This is reflected by increased interest in low-sugar and sugar-free jams and preserves,
as well as honey.280
Consumer Trends: How to Market Honey Products
The country’s expanding middle class is starting to spend on other discretionary expenditures
because of decreasing price sensitivity and increasing income. In addition, following increasing
awareness of the benefits of consuming honey products, not only for food consumption but
also for medicine, healthcare, bath-soaps, and shampoos, it is therefore very likely that the
development of the honey market in Indonesia will be mainly driven by the middle-income and
urban residents.
Offer
Domestic Market
The high level of demand on the honey market in Indonesia is due to the fact that the products
yielded by the honey-bees are used not only for individual consumption, but also for cigarettes,
food, beverage, medicine, milk, bread, bath-soap, shampoo and other kinds of industrial
products.
Import of Honey Products
Compared to other Asian countries, the production of honey in Indonesia is relatively low, with
only 5,000 tons produced in 2014. This means that local production in that year could only
meet about 20 grams per person.
280
© Source: Euromonitor International, “Spreads in Indonesia”, 2015
143
Tastes of Europe Indonesia – Market Entry Handbook
In 2016, Indonesia imported 1636 tons of honey, for a total of 4.6 million EUR. Argentina is
the main exporter of honey to Indonesia, followed by Saudi Arabia (27 percent) and Australia
(8.6 percent).281
Even though the import volume and value remain relatively low compared to other countries,
the consumption is likely to increase over the next few years, in particular because of increasing
public awareness to consume honey as a supplement apart from as a medicine.
Foreign natural honey exports need to obtain certain licenses and certifications to export honey
to Indonesia. According to the United States Department of Agriculture – Foreign Agricultural
Service, Indonesian import procedure is the following:282
Figure 38 Indonesia: Import Procedure Flow Chart283
Most importantly, according to the National Agency for Drug and Food Control (BPOM)’s
regulations, importers should obtain the SKI permit to have products cleared at the customs.284
© Trade Map, International Trade Centre, available at www.trademap.org.
U.S. Department of Agriculture, “USDA – Foreign Agricultural Service, FAIRS country report – Indonesia”
available at::
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20and%20Agricultural%20Import%20Regula
tions%20and%20Standards%20-%20Narrative_Jakarta_Indonesia_12-24-2015.pdf
283
U.S. Department of Agriculture, “USDA – Foreign Agricultural Service, FAIRS country report – Indonesia”
available at::
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Food%20and%20Agricultural%20Import%20Regula
tions%20and%20Standards%20-%20Narrative_Jakarta_Indonesia_12-24-2015.pdf
284
Ibid.
281
282
144
Tastes of Europe Indonesia – Market Entry Handbook
Export of Honey Products
Indonesia does not appear among the world’s top exporters of honey. According to the United
Nations Food and Agriculture Organization, Indonesia only exported 207 tons of natural honey
in 2013, compared to 37,000 tons exported by Vietnam in the same year.
The main destination of Indonesia’s honey exports is Singapore followed by Bangladesh and
Malaysia. Indonesia’s honey exports to Singapore and Bangladesh as well as to Malaysia are
relatively negligent, amounting to 450 000 EUR, 230 000 EUR and 127 000 EUR in 2016
respectively.285 However, Indonesia does not feature among the 12 top honey exporters to the
EU, partly because of the EU’s ban on Asian honey that was lifted only in 2013.286
The low volume of honey exports is mainly related to the low levels of honey production in
the country, combined with a high demand from local consumers. The country therefore cannot
yet export its honey and bee products on the global market as the domestic demand is not
fulfilled.
Indonesia's Exports of Honey by Quantity (2011-2015)
Unit: Tonnes
1000
800
600
400
200
0
2011
2012
2013
2014
2015
Exports
Figure 39: Indonesia's Exports of Honey by Quantity (2011-2015)287
Main Competitors on the Market
Locally produced honey still dominates Indonesian market, mainly due to their extensive
distribution network. However, some imported honey also gained footing, notably those from
Saudi Arabia and New Zealand.
It is also worth noting that honey produced in Kalimantan and Sumbawa are extremely popular
among Indonesian consumers and these types of honey do not have a brand, as they are
produced by small-and-medium enterprises (SMEs) and are distributed in small retailers only.
Local households normally favor these kinds of honey as they are associated with originality
and freshness.
© Trade Map, International Trade Center, available at: http://www.trademap.org/
European Commission, DG Agriculture and Rural Development, “EU Market Situation for Honey” available
at: http://ec.europa.eu/agriculture/honey/reports/market-situation_en.pdf
287
© Trade Map, International Trade Center, available at: http://www.trademap.org/
285
286
145
Tastes of Europe Indonesia – Market Entry Handbook
Madurasa is the most prominent honey brand in Indonesia and its distribution network spans
wide from hypermarket to small retailers. Established in 1985, Madurasa is also one of
Indonesia’s oldest honey brands. It started making names by selling honey in sachets and
associating it with healthy snacks.288Its product range varies from bottled premium honey for
family marketed as Royal Jelly and Bee Pollen, to flavored honey that is popular among
schoolchildren.
Pramuka Honey is a success story of small business cooperatives belonging to the Indonesian
Scout Movement (Gerakan Pramuka Indonesia). The cooperatives have been selling honey
since 1970 but the quality was so good that it became popular among Indonesians through
word-of-mouth marketing. In 2004, the small cooperatives officially became a legal entity
producing local honey named PT Madu Pramuka289.
288
289
Available at: http://www.madurasa.co.id/eng/aboutus (for refrence only, no data used)
Available at: http://madupramuka.com/statis-1-profil.html (for refrence only, no data used)
146
Tastes of Europe Indonesia – Market Entry Handbook
Arrohmah Black Honey gained popularity among health-conscious Indonesians due to the
belief that the black honey – which tastes bitter instead of sweet – could reduce cholesterol
levels and cure various heart and respiratory problems. The honey originates from Kalimantan
and it is extracted from wild bees endemic to the area. The Arrohmah black honey is sold in
small retailers only and costs about 4 EUR for a bottle of 460 grams.290
Al-Shifa Honey is being marketed in Indonesian retailers as high-quality imported honey and
is very popular among middle- and upper-class Indonesians. It is produced by the Sunbulah
Group in Saudi Arabia, though the honey is derived from various areas in the world including
tropical forests of the South America, Australia and the Alps mountains in Northern Europe291.
McAdams Manuka Honey from Australia and New Zealand is also a popular choice among
Indonesian middle-class family. The McAdams Manuka honey stands out due to its distinctive
taste and unique production nature (it is derived from a monofloral honey produced from the
nectar of the manuka tree). Many Indonesians are also aware of the vast health benefits of
Manuka honey, such as the fact that it has considerably higher level of enzymes than regular
honey292.
Specific Customs and SPS Requirements
According to the Directorate General of Custom of the Republic of Indonesia, import duties on
natural honey amount to 5 percent for MFN, plus a 10 percent VAT.293
According to regulations No 12/2015 and 13/2015 of the National Agency for Drug and Food
Control (BPOM), importers of food and food ingredients, and thus natural honey, are required
to obtain an entry permit (SKI) in order to release the products at customs for each shipment.294
In addition, natural honey products also need to obtain phytosanitary certificates by public
officers authorized by the official national plant protection organization. Phytosanitary
certificates should be filled with the following information:
1. Name and address of exporter;
2. Number and description of packages;
3. Place of origin;
4. Name of produce and quantity declared;
5. Name of authorised officer, date and signature.
Distribution
The modality of imports is mainly in bulk packs or in containers. Honey products to the end
users are usually imported by local distributors in bulk packages, and then are repacked locally
in consumer size packages. Through local importers and agents, products are then distributed
to supermarkets, mini markets and drugstores.
Some of the biggest local importers and distributors include:
Available at: http://maduhitampahitarrohmah.com/ (for refrence only, no data used)
Available at: http://www.sunbulahgroup.com/honey-jam.html (for refrence only, no data used)
292
Available at: https://draxe.com/manuka-honey-benefits-uses/ (for refrence only, no data used)
293
Available at: http://www.beacukai.go.id/btki.html(for refrence only, no data used)
294
Under certain circumstances, the BPOM also provides a priority service, issuing a 6-month validity SKI
permit an on-line application processing. For more info, please refer to: Australian Government Trade
Commission: https://www.austrade.gov.au/ArticleDocuments/1418/IABW_PFB_BPOM.pdf.aspx
290
291
147
Tastes of Europe Indonesia – Market Entry Handbook
Elang Biru Indonesia, PT
Address: Equity Tower Building, 35th Floor, SCBD Jl. Jend. Sudirman Kav. 52 -53
Jakarta12190
Tel: +62-21 33 500088
Fax: +62-21 29277888
Website: www.madumanuka.co.id
Business Line: Importer & Distributor of Honey.
Fermanto Bevfoods, CV
Address: Jl. Penjernihan II No. 1 Pav Penjompongan Jakarta Pusat 10210
Telp: +62-21 573 2816
Fax: +62-21 573 6678
Website: www.fermantobevfoods.co.id
Business Line: Importer, Distributor, Producer of Honey and other food & beverage.
Gautama Indah Perkasa, PT
Address: Danau Sunter, Jakarta 14350
Telp: +62-21 933 89783
Fax: +62-21 651 4114
Business Line: Importer & Distributor of Honey, snacks and groceries
Interfood Sukses Jasindo, PT
Address: Jl. Kartini II No. 19 Ruko Pasar Baru Sawah Besar Jakarta 10710
Telp: +62-21 385 2434
Fax: +62-21 385 2435
Email: jerytanajaya@yahoo.com
Website: www.interfood.co.id
Business Line: Importer & Distributor of Honey, snacks and groceries5.
Kartikawira Adisukses, PT
Address: Jl. Petojo Barat IV No. 4 Jakarta Pusat 10130
Telp: +62-21 6322 935/ 631 0607
Fax: +62-21 6322 965
Email: sales@kartikawira.com or isbandi_ss@kartikawira.com
Business Line: Importer & Distributor of Honey, snacks and groceries6.
Mitra Bersaudara, PT
Address: Jl. Dewi Sartika Raya No. 239A Cawang Jakarta Timur 13630
Telp: +62-21 801 3333Fax: +62-21 800 1616
Email: contact@mitrabersaudara.com Website: www.mitrabersaudara.com
Business Line: Importer & Distributor of Honey and meals (mostly import from
SaudiArabia).
Nirwana Lestari, PT
Address: Jl. Raya Narogong Km 7., Bojong Menteng Bekasi Jawa Barat 17117
Telp: +62-21 8204055
Fax: +62-21 8204055
Email: info@nirwanalestari.com
Website: www.nirwanalestari.com
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Tastes of Europe Indonesia – Market Entry Handbook
Business Line: Importer & Distributor of Honey, snacks and groceries.
Pandurasa Kharisma, PT
Address: Jl. Indokarya II Blok G No. 5 Sunter Agung Podomoro Jakarta 14340
Telp: +62-21 650 5335
Fax: +62-21 650 5328
Email: pandukha@cbn.net.id or sales@pandurasa.co.id
Website: www.pandurasa.co.id
Business Line: Importer & Distributor of Honey, snacks and groceries.
Safarindo Internusa, PT
Address: Jl. Kemang Timur Raya No. 16 Jakarta
Telp: +62-21 719 9156
Fax: +62-21 719 9147
Email: info@safarindo.com
Website: www.safarindo.com
Product: Honey, snacks, and groceries.
Sukanda Djaya, PT
Address: MM 2100 Industrial Town Jl. Irian Blok FF-2 Cibitung Bekasi Jawa Barat 17520
Telp: +62-21 898 1246
Fax: +62-21 8998 2010
Website: www.sukandadjaya.com
Business Line: Importer & Distributor of Honey, snacks and groceries.
Seafer General Food, PT
Address: Jl. Wonosari No. 3 Kendal Jawa Tengah 51351
Telp: +62-294 383333
Fax: +62-294 382078
Email: marketing@seafer.co.id .
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Tastes of Europe Indonesia – Market Entry Handbook
3.13 Gums Resins and Plant Extracts
Strengths
Opportunities
•Well-attuned to growing consumer
health consciousness
•High value per unit export sector for
EU
•Gum resins and plant extracts seen as
both nutritional and even considered
for medicinal qualities in Indonesia
•Long shelf-life and ease of transport
to market
Gum Resins &
Plant Extracts
Outlook
Weaknesses
Threats
•Relatively expensive product unlikely
to be regularly purchased by most
consumers
•Price sensitive and limited scope of
in-demand products in Indonesia at
current stage of development
•Low existing EU market share and
uncertain growth prospects
•Strong presence of domestic
producers, contributing to Indonesia's
substantial regional exports
Consumption
The gums resins market in Indonesia
holds vast potential as local consumers
and industries have for years been
accustomed to frequently utilising the
commodities for various purposes
from personal household consumption
to the manufacturing of intermediate
goods.
Resin gum is locally known as damar.
Damar forests are commonly found in
Kalimantan, Sulawesi, Maluku and
Papua and the country has been
cultivating resin gum even prior to the
World War II.
In Indonesia, resin wood has been used to produce pulp that will be processed further to become
paper. Resin-made papers are sold for a premium price due to its high durability. The sap from
resin wood is commonly added in the mixture of rubber to improve its sturdiness, eventually
improving the quality of finished products such as tires or shoe soles. It has also been a common
practice in Indonesia to mix resin gum in paints used to dye the batik textile, which is
commonly donned among Indonesians during formal events. For food, the resin gums are also
used by the food and beverages industry for natural colouring. The list of other Indonesian
products that utilise resin in their production process includes plastics, textile, paint, ink and
matchsticks.
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Tastes of Europe Indonesia – Market Entry Handbook
Damar originates from its latin Agathis dammara, the plantation of which has been developed
in various areas in Indonesia in the islands of Java, Sulawesi and Maluku. Medium-sized resin
farms in Indonesia normally utilise the trees’ sap and turn it into copal gum, which would then
be used for various consumer goods and medical products, such as health balms, in addition to
intermediate industrial goods.
The amount of resin gums utilised by households remains limited, though the sector has a very
significant upside potential. Volume growth in gum used for candy and bubble gum, for
example, is set to remain positive over the forecast period, mainly thanks to its much smaller
sales base compared to other types of confectionery. In Indonesia, there are three prominent
gum brands: Happydent, Big Babol and Mentos. For these companies, robust growth would be
warranted going forward as improved distribution is expected to further ensure product
availability, further fueling volume sales. The strategies of the leading gum manufacturers,
which involve price promotions and new product development, are also likely to further boost
growth in gum over 2015-2020.295
Industry Profile
Resin gum is seen as an environmentally friendly production inputs as its processing does not
generate too much hazardous waste, while its processing cost is relatively low compared to
other factory production inputs used for the same function.
European resin gums have to compete with the locally produced commodities. The most
famous one is the Damar Mata Kucing (Cat Eye Resin Gum), which is the most expensive type
of resin gum in Indonesia that is produced from Lampung in the west, to Maluku Islands located
in Indonesia’s far east. Other types of resin gums include Damar Daging (Meat Resin Gum),
Damar Batu, Damar Tulang (Bone Rasin Gum) and Damar Supit.
Damar Mata Kucing (Cat Eye Resin Gum), is the most expensive and the most widely used
resin gum in Indonesia. Its sap is extracted from Shorea javanica and is used from cosmetics,
perfume, colouring, and paint. Plantations of Damar Mata Kucing can be found in Lampung, a
province located in the southern part of Sumatera island. This resin gum is known for its bright
yellow color and transparent texture.
Damar Daging (Meat Rasin Gum) got its name from its dark red color and thick texture,
which resembles fresh red meat. The Meat Resin Gum is mainly used for colouring.
Damar Batu (Rock Rasin Gum) is low quality resin gums that is collected by farmers on the
forest floor and has formed naturally from weal on tree trunks. It is commonly used in the
production of incense, candles and paint.
Offer
Domestic Market of Resin Gum in Indonesia and Import
Gums, resins and plant extract are among the most strategic commodities that are exported
from EU Member States to Indonesia. The commodities are ranked 13th in the top EU Agrifood exports to Indonesia, with shipped goods amounting to EUR 15 million in 2015,
increasing from EUR 12 million in 2011.
295
© Source: Euromonitor International, “Confectionary in Indonesia”, 2015
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Tastes of Europe Indonesia – Market Entry Handbook
Figure 40 Evolution of 20 Top EU Agri-Food Exports to Indonesia, 2011-2015296
The prices in Indonesia largely depend on the quality of the resin gum. In the local wholesale
market, the highest quality resin gum could be sold in IRD 24,000 per kilogram, or EUR 1.6
per kilogram. Meanwhile, the low-quality resin gum is available for half the price, as cheap as
IRD 12,000 (EUR 0.8). The picture on the left shows a high-quality resin gum in Indonesia,
which stands out due to its glowing, clean and transparent look, with gold commonly being its
color.
For the Indonesian food market, resin gums are also the major ingredient to produce chewing
gum. The rapid expansion of modern retail outlets such as supermarkets or hypermarkets and
convenience stores paved the way for the improved distribution of gum, especially chewing
gum, which is geared towards modern retail channels. Meanwhile, gum manufacturers and
distributors continued to provide independent small grocers with products as well as supplying
attractive point-of-sale materials. For the chewing gum market, there are three prominent gum
brands controlling market share in Indonesia: Happydent, Big Babol and Mentos.
European Commission, DG for Agriculture and Rural Development, “Agrifood in Indonesia” Available at:
http://ec.europa.eu/agriculture/trade-analysis/statistics/outside-eu/countries/agrifood-indonesia_en.pdf
296
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Tastes of Europe Indonesia – Market Entry Handbook
Indonesia's Imports of Gums Resins and Plant Extracts by
Value (2011-2015)
Unit: EUR Thousand
70000
60000
50000
40000
30000
20000
10000
0
2011
2012
2013
2014
2015
Imports
Figure 41: Indonesia's Imports of Gums Resins and Plant Extracts by Value (2011-2015)297
Export
Indonesia is a major exporter for resin gum, with export to India, Germany, the Philippines,
France, Belgium, United Arab Emirates, Bangladesh, Pakistan and India. In 2014, the price of
resin gum sold in Indonesia averaged between USD 1,200-2,080 (EUR 1073 1860) - per global
metric tons, relatively cheap compared to global export price of USD 1,000-1,500 (EUR 8941341) per global metric ton in the international market.298
More than 50 percent of resin gums produced in Indonesia are exported to China, the biggest
consumer. European nations such as France, Germany and Portugal are also among the biggest
buyers of Indonesian resin gums, which have been known for its excellent quality and
distinctive nature. France is a notably big importer, as their share of purchase account for 36
tons annually, or 25 percent of total procurement of Indonesian resin gums every year, the
second-biggest buyer after China. The share of France’s purchase is 5 times bigger than
Germany, which is the third-biggest buyer.
297
298
© Trade Map, International Trade Center, available at: http://www.trademap.org/
Gum resin prices compiled using publically available market informationand the help of local consultants.
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Tastes of Europe Indonesia – Market Entry Handbook
Figure 42 Countries importing Indonesian-made Gum Resins (kg)299
Lampung, a province in Indonesia that is known for producing high-quality resin gums, have
shipped the commodity to Europe, Middle East, South Asia and the Philippines. It is the main
production hub in Indonesia for the Damar Mata Kucing, or the Cat Eye Resin Gum, but was
recently hit by the collapse of commodity prices, including resin gum prices. Local people in
Indonesia refer to resin gum forests as “repong”, which has been the source of income for local
people for a long time, as resins have been used for a long time in the traditional medicine. The
province produces three grades of resin gums based on their quality; AC, AB and ABC, with
the latter being the highest quality of resin gums that are exported overseas.300
Indonesia's Exports of Gums Resins and Plant Extracts by
Value (2011-2015)
Unit: EUR Thousand
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2011
2012
2013
2014
2015
Exports
Figure 43: Indonesia's Exports of Gums Resins and Plant Extracts by Value (2011-2015)301
299
300
301
© Trade Map, International Trade Centre, available at www.trademap.org.
© Trade Map, International Trade Centre, available at www.trademap.org.
© Trade Map, International Trade Center, available at: www.trademap.org.
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Tastes of Europe Indonesia – Market Entry Handbook
Distribution
As intermediate goods utilised to process the finished goods, resin gums are shipped mostly to
various industries. Local plantations of resin gums normally cooperate with industries to
provide the necessary amount of the commodities.
For European resin gum producers, the growing pharmaceutical and paper industries in
Sumatera and Java provide opportunities.
Challenges and Main Competitors for the European Products
The resin gum market in Indonesia offers lucrative potential for European producers, but it was
worth noting that the Indonesian market for resin gums is still controlled by local producers,
who have upper hand in industry network. This is particularly due to the fact that the resin
gums in Indonesia are mainly utilised as intermediate goods that support the production process
of finished goods.
Another factor worth mentioning is the fact that resin gums in Indonesia have its own
distinctiveness and exclusiveness and local industries might not find European-produced resin
gums as good substitutes. The resin gum of Mata Kucing, or Cat’s Eye, is a reliable first-class
product with idiosyncratic quality traits that might not be found in other products.
Among the biggest resin gum producers in Indonesia is state-controlled Perum Perhutani. The
state-owned company oversees 95,085 hectares of resin gum plantation. The company focuses
on producing copal resin gums that were used by the paper industry. Perum Perhutani supplies
two types of copal resin gum; superior quality and primary quality. For more information,
please refer to the Perum Perhutani webpage.
Lately, certain industries have also shifted to utilise gums derived from oleo pines, using them
as substitute for gums from resin. Oleo pine gum, which is used in medicine and cosmetics, is
a brittle, transparent, glassy solid, a natural organic compound, mainly composed of resins,
possess chemical activity when dissolved in many organic solvents, though it is insoluble in
water. For more information please consult the websites of Indonesia’s major gums and resins
producers or traders.
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Tastes of Europe Indonesia – Market Entry Handbook
3.14 Cotton and Live Plants
Strengths
Opportunities
•Growing demand for cut flowers, with
competitive EU export position and
seasonal complementarity
•Large number of varieties in demand
which are not produced locally
•Well-suited for increasing prevalance
of gift-giving in Indonesia, including
celebration of foreign holidays
•Recognized quality and desiribility of
EU exported plant products
Cotton & Live
Plants Outlook
Weaknesses
Threats
•Relatively expensive product unlikely
to be regularly purchased by most
consumers
•Long distance to market and many
products are time and temperature
sensitive
•Increase in domestic or regional
production
•Consumer preferences do not take
hold or shift to other forms of
ceremonial decoration and gift-giving
Consumption
In 2016, Indonesian cotton consumption estimate is increased to 3.05 million bales from the
previous MY 2015/16 of 3.0 million bales.302
This increase is driven by the
expansion of domestic players. For
live plants, including cut flowers,
ornamental foliage, bulbs, roots and
the like, the Indonesian market is
relatively small. Statistical data on
consumption of these products is not
available.
Consumer Profiles
One of the main consumers of cotton
in Indonesia is the spinning sector,
which produces spun yarn and sewing
thread. The sector is expanding,
having grown from 251 companies in
2012 to 285 companies in 2015. According to industry sources, as of 2013 the Indonesian
spinning industry consumed a total of 2.6 MMT of fiber as raw material annually, 26 percent
of which was cotton.
302
U.S. Department of Agriculture, “Indonesia Cotton and Products Report” available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Cotton%20and%20Products%20Annual_Jakarta_I
ndonesia_3-31-2017.pdf
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Tastes of Europe Indonesia – Market Entry Handbook
In the cut flowers market, consumer preferences differ between Jakarta and other larger cities
in Indonesia. In Jakarta, giving flowers for all social occasions, such as birthdays, weddings
and illness has become rather common and substitutes for personal visits. As a result, Jakarta
has become by far the largest market for flowers in Indonesia and consumes approximately 76
percent of the total consumption. In Jakarta, more than 900,000 stems of cut flowers are sold
per week, accounting for an approximate value of EUR 4.53 million per year, whereas the total
amount for all major cities is estimated to be EUR 6.04 million per year.303
Consumer Trends
In marketing year (MY) 2014/15, Indonesia increased its imports of cotton by approximately
12 percent compared to 2013/14. Despite robust consumption-driven import demand,
consumption is expected to decline in 2015/16 and 2016/17. One of the reasons is that global
economic conditions lowered the price of crude oil, drawing down polyester and synthetic fiber
prices. Industry reports that the current price of polyester stands at approximately USD 0.85/kg
with only two percent waste, while the price of middling grade cotton stands at approximately
USD 1.7/kg with 10 percent waste on carded cotton yarn production and 23 percent waste on
combed cotton yarn production. Indonesian spinners rely heavily on imported cotton. Unlike
manmade fiber spinners, (who generally hold one week’s stocks on hand), cotton spinners must
hold a minimum of 2 month’s stocks plus one month “on-the-way” shipment stocks. Cotton
therefore requires more capital compared to using manmade fibers.304
With regards to cut flowers, commercial floriculture production in Southeast Asia was
historically developed because of increasing need for low cost flowers by the European cut
flower market place. Unlike other regions, such as Africa, south and Central America, in which
cut flowers are mainly produced for export, in Asia the market potential for cut flowers has
rapidly changed to include opportunities for supplying the local market as well. This unique
development is on account of, among others, high population densities, and the consumer
perception which has been promoted heavily by the European flower industry that the use of
fresh flowers in one’s everyday life represents an improved, quality lifestyle.305
Indonesia is no exception to this trend. Over the years, it has seen its industry grow to satisfy a
significant domestic demand for cut flowers, foliage and potted plants. With a population of
nearly 250 million, it is one of the world’s most heavily populated countries. However, its
floricultural industry remains relatively small, mainly due to lack of knowledge and
infrastructure. As the owner of MJ Flora, a leading Indonesian ornamental horticultural
company stated “Many wealthy people travel to America or to the Netherlands and see different
varieties. They come back and ask ‘why can’t we do that here?’ I tell them ‘we can, except we
don’t have the knowledge.”306
© Food and Agricultural Organisation of the United Nations, 1998, Toto Sutater and Kusumah Effendie “Cut
Flower Production Development in Asia: Cut flowers production in Indonesia” available at:
http://www.fao.org/docrep/005/ac452e/ac452e05.htm#fn5 . Reproduced with Permission.
304
U.S. Department of Agriculture, “Indonesia Cotton and Products Report” available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Cotton%20and%20Products%20Annual_Jakarta_I
ndonesia_3-31-2017.pdf
305
© Food and Agricultural Organisation of the United Nations, 1998, Heidi C. Wernett, “ Cut Flower Production
Development in Asia: Potential of Commercial Floriculture in Asia: Opportunities for cut flowers development”
available at: http://www.fao.org/docrep/005/ac452e/ac452e0c.htm. Reproduced with Permission.
306
Marc Zienkiewicz, “A blooming Market in Asia”, Seedworld available at: http://seedworld.com/bloomingmarket-asia
303
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Tastes of Europe Indonesia – Market Entry Handbook
Challenges for EU products
Indonesia’s currency remains weak, with exchange rates reaching IRD 13,367/EUR 1 as of
March 3, 2016 compared to IRD 13,022/EUR 0.9 on March 5, 2015. The weak rupiah led to
depressed consumer purchasing power, while the global economic slowdown reduced export
demand for Indonesian textile products. As a result, Indonesian mills have faced an over-supply
scenario since the middle of 2015. This constitutes a challenge for foreign companies not only
for cotton, but across sectors. An additional general challenge for foreign companies is
preference of the consumers to local products.
Offer
Domestic Offer
Indonesia's exports of cotton represent 1.5 percent of the world exports. Indonesian cotton
production is currently very low, as farmers still continue to face better incentives to grow
alternative products such as rice or corn. The few Indonesian farmers that still grow cotton
have limited access to high yielding varieties and cultivation practices. Increased land
conversion to nonagricultural uses also reduces the area dedicated to cotton. The Directorate
General for Estate Crops of the Indonesian Ministry of Agriculture (DGEC, MOA) reported
that in 2015/16, most cotton was grown on marginal lands, mostly in South Sulawesi. It was
also reported that farmers in Central Java no longer grow cotton. U.S. Department of
Agriculture Foreign Agricultural Service estimates that Indonesian cotton production will
remain
stagnant at
5,000 bales
in 2016/17.
In 2017/18
Indonesia’s
cotton
production
is forecast to
decline to
am
mare
3,000 bales,
as
it
is
expected
that farmers
will
continue to
convert
cotton
production
to corn and
other crops.
Currently,
the volume
158
Tastes of Europe Indonesia – Market Entry Handbook
of domestic cotton production contributes to less than 0.25 per cent of Indonesia’s total cotton
demand.307
Indonesia's exports of live plants represent 0.2 percent of world total. Its ranking in world
exports is 39. Its imports for this product represent 0 percent of world total, and its ranking in
world importers is 104.308
As is the case with other horticultural products, Indonesia has a potential for growth in the
domestic market and local production for export of live plants. This is due to growth of the
middle class who are becoming increasingly aware of the benefits of fresh horticultural
produce. Another development which may benefit local horticultural production is the
depreciation of the rupiah against the US dollar, resulting in a decline in consumer purchasing
power which makes imported products less competitive. However, that potential is largely
hampered by lack of knowledge on post-harvest management, inconsistent supply and poor
infrastructure.
The local market of cut flowers and ornamental plants is developing rapidly, though highquality planting material is still lacking. The market consists of a number of confined markets,
larger cities and their supply regions, with no integrated domestic market.
Import
Cotton is ranked sixth among the top 20 EU agricultural food exports to Indonesia. In 2015,
the cotton share in the EU agricultural food exports was 4.2 percent. Evolution over the last 5
years has not been stable, showing sharp increases followed by sharp decreases. Table below
shows Indonesia’s imports of cotton from the EU over the period of 2011-2015.
70
60
50
40
30
20
10
0
Value in M EUR
2011
2012
2013
2014
2015
Figure 44 Indonesian Imports of Cotton from the EU
309
Large, export-oriented manufacturers in Indonesia, with stronger cash flows are expanding
their capacity through the procurement and installment of new machinery. Unlike smaller mills
using 20-year-old technology, these mills are using newer and more efficient cotton spinning
technology. However, further rupiah depreciation, combined with higher labour and electricity
costs, depressed consumer purchasing power, and slow demand from major export destinations
U.S Department of Agriculture Foreign Agricultural Service, “Indonesia: Cotton and Products Annual:
Indonesia Cotton and Products Annual Report 2017” , March 2017, available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Cotton%20and%20Products%20Annual_Jakarta_I
ndonesia_3-31-2017.pdf
308
© Trade Map, International Trade Center, “List of supplying markets for the product imported by Indonesia
in 2015” available at: http://www.trademap.org/Country_SelProductCountry.aspx
309
“Agri-Food Trade Statistical Factsheet: European Union – Indonesia” available at:
https://ec.europa.eu/agriculture/sites/agriculture/files/trade-analysis/statistics/outside-eu/countries/agrifoodindonesia_en.pdf.
307
159
Tastes of Europe Indonesia – Market Entry Handbook
in ASEAN and Europe will reduce Indonesian cotton imports in MY 2015/16. Spinners must
also utilise stocks built during the surge of cotton imports in MY2014/15 prior to making
additional imports.
Based on import data and the above-mentioned factors, it is estimated that for MY 2015/16
Indonesian will import cotton amounting to 2.5 million bales, compared to 3.345 million bales
in MY 2014/15. It is also forecasted that for MY 2016/17 Indonesian cotton imports will
amount to 2.7 million bales based on the anticipated implementation of the GOI’s trade
deregulation, which is expected to reduce import costs.310
Between August and December 2015, Brazilian origin cotton led exports to Indonesia,
accounting for 44 percent of the market. The United States, Australia, and India followed with
21, 13, and 8.2 percent market shares respectively. Despite quality issues, Indian, Brazilian,
and African cotton are considered adequate by Indonesian industry standards. Indonesia’s
primary yarn export destinations during calendar year 2015 were China (74 percent), Japan (12
percent), and South Korea (5 percent).311
The value of imports of live plants from the EU to Indonesia in 2015 was USD 733,000 (EUR
674,550), which constituted 30 percent of Indonesia’s imports in this product category. That
value has not considerably changed between 2011 and 2014. However, from 2014 to 2015 there
was a significant increase. Most of EU exports of live plants are from the Netherlands, which
is ranked first in this category in share of world exports. Other important exporters in term of
imported value are China, Ecuador and Chile.312
Indonesia is not considered to be a major export destination for the EU in this category relative
to other countries. Main export destinations are the Russian Federation (21.3 percent of total
EU exports of plants and floriculture products in 2014) and Switzerland (20.7 percent),
followed by the US (10.2percent) and Norway (8.8 percent).313
“U.S. Department of Agriculture, “Indonesia Cotton and Products Report” available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Cotton%20and%20Products%20Annual_Jakarta_I
ndonesia_3-31-2017.pdf
311
Ibid.
312
© Trade Map, International Trade Centre, available at www.trademap.org.
313
Ibid.
310
160
Tastes of Europe Indonesia – Market Entry Handbook
2.5
2
1.5
Value in M EUR
1
0.5
0
2011
2012
2013
2014
2015
Figure 45 Imports of Live Plants from the EU to Indonesia314
120
100
80
60
40
20
0
-20
-40
-60
2011-2015
2014-2015
Figure 46 Growth in Value of Indonesian Imports of Live plants from the EU (% p.a.)315
Export
The value of cotton exports to the EU was EUR 4 million. Over the past 5 years, exports from
Indonesia to the EU decreased, most notably between 2014 and 2015.
“Food Trade Statistical Factsheet: European Union – Indonesia” available at:
https://ec.europa.eu/agriculture/sites/agriculture/files/trade-analysis/statistics/outside-eu/countries/agrifoodindonesia_en.pdf.
315
© Trade Map, International Trade Center, “List of supplying markets for the product imported by Indonesia
in 2015” available at: http://www.trademap.org/Country_SelProductCountry.aspx
314
161
Tastes of Europe Indonesia – Market Entry Handbook
35
30
25
20
Value in M EUR
15
10
5
0
2011
2012
2013
2014
2015
Figure 47 Indonesian Exports of Cotton to the EU316
The value of live plants exports from Indonesia to the EU in 2015 was USD 4.04 million (EUR
3.71 million), which constituted 13 percent of Indonesia’s exports in this product category.
Over the past 5 years, there has been a growth of 147 percent p.a. in exported value. The most
significant increase occurred between 2014 and 2015. While in some Member States the value
of imports decreased, in others (especially Poland, Italy, France and Spain) it has dramatically
increased overall.317
The role of the EU as an export destination for Indonesia in this category is relatively minor.
Main importing markets are Kenya (28.1 percent of total EU imports of plants and floriculture
products in 2014) Ethiopia (10.6 percent) and Costa Rica (9.3 percent).318
6
5
4
3
Value in M EUR
2
1
0
2011
2012
2013
2014
2015
Figure 48 Indonesian Exports of Live Plants to the EU319
“Food Trade Statistical Factsheet: European Union – Indonesia” available at:
https://ec.europa.eu/agriculture/sites/agriculture/files/trade-analysis/statistics/outside-eu/countries/agrifoodindonesia_en.pdf.
317
© Trade Map, International Trade Centre, available at www.trademap.org.
318
European Commission, “Working Document, Civil Dialogue Group - Horticultural Products: Flowers and
Ornamental Plants” available at https://ec.europa.eu/agriculture/civil-dialogue-groups/horticulture-olivesspirits_en.
319
Ibid.
316
162
Tastes of Europe Indonesia – Market Entry Handbook
3500
3000
2500
2000
1500
1000
2011-2015
500
2014-2015
0
-500
Figure 49 Growth in Value of Indonesian Exports of Live plants to the EU (% p.a.)320
Mapping Main Competitors on the Market
Several ornamental companies operate in Indonesia. Two prominent ones which are active
internationally are:
AGRO21 Gemilang - The company was established in 1986. Initially it produced
fruit plants, but it has grown since then and has for long been dealing with plants nerseis.
For more information wisit the company website.
MJ Flora – The company produces a variety of plants products, including cut foliage,
tropical cut flowers and bulbous plants, tip cuttings, rooted cuttings, air layers, canes,
tissue culture micro-cuttings, flowering landscape as well as indoor plants for
interiorscape use. The company holds a total growing area of about 6 hectares (13.2
acres), situated in the tropics on the island of Java, Indonesia. The company shows
awarness for international standards such as Coroperate Social Responsibility,
declaring on their website that the Company’s management include men and women
from different ethnic groups, as well as that the company does not employ children or
undrage individuals. For more information, visit company’s website.
Specific customs and SPS requirements for import
There is no import duty or VAT in Indonesia on import of raw cotton.
In December 31, 2015 a new regulation by the Indonesian Ministry of Finance for the
establishment of a logistic bonded center became effective (see details in the distribution
section below). Cotton imported and temporarily stored at the logistic bonded center will be
exempted from any import related taxes, including value added tax, sales tax on luxury goods,
excise tax, and income tax. The imported cotton will also enjoy suspensions of import duties.
320
© Trade Map, International Trade Centre, available at www.trademap.org.
163
Tastes of Europe Indonesia – Market Entry Handbook
The Indonesian textile industry including spinners is supportive of this new regulation as it will
simplify the procedures and reduce costs to import cotton.321
For live plants which fall
under the category of
horticultural products, the
situation is less encouraging.
Indonesia applies a tariff of
11.1 percent on imported live
plants. In 2012, new
regulations on horticultural
imports were introduced.
“Horticulture can only enter
Indonesia at select ports,
which excludes the busiest
port of Tanjung Priok in
Jakarta. New regulations
also
state
that
only
registered importers can
deal
with
horticulture
imports. To become a
registered
horticulture
importer a firm must get a recommendation from the designated directorate general at the
Ministry of Agriculture.”322 This has resulted in many complaints against Indonesia, including
WTO disputes. In 2015, the Indonesian Ministry of Trade (MOT) issued regulation 71/2015,
updating Indonesia’s import rules on horticultural products. The new import rules outlined in
MOT 71/2015 supersede MOT 16/2013, 47/2013, and 40/2015, but makes few substantial
changes. Import licenses are still required and quantities will be allocated subject to the
importer’s cold storage capacity. MOT eliminated the 80 percent rule, which imposed punitive
measures on importers that used less than 80 percent of the quota allotted under their import
permits. The new regulation also specifies that the total import allocation will be set annually
and that importers are no longer required to register as horticultural product importers. 323
Specifically with regards to living plants, seeds and other planting materials, there is a
requirement for a phytosanitary certificate issued by the approved authority in the country of
origin stating that they are free from pests or diseases.324
Challenges for EU Products
As can be seen above, the main challenges for European exports arise from the low value of
the Indonesian currency, which decreases customers’ purchasing power, along with the
customers’ loyalty to local products. In the case of live plants, there are additional challenges
U.S. Department of Agriculture, “Indonesia Cotton and Products Report” available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Cotton%20and%20Products%20Annual_Jakarta_I
ndonesia_3-31-2017.pdf
322
Titik Anas, “Indonesia’s new protectionist trade policies: a blast from the past”, Eastasia Forum, June 2012,
available at: http://www.eastasiaforum.org/2012/06/18/indonesia-s-new-protectionist-trade-policies-a-blastfrom-the-past/
323
U.S. Department of Agriculture, “Indonesia: Ministry of Trade Changes Horticulture Import Regulation”
available at: http://www.fas.usda.gov/data/indonesia-ministry-trade-changes-horticulture-import-regulation,
324
Australian Trade and Investment Commission, “Doing Business Indonesia”, available at:
https://www.austrade.gov.au/Australian/Export/Export-markets/Countries/Indonesia/Doing-business/Tariffsand-regulations
321
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Tastes of Europe Indonesia – Market Entry Handbook
such as the presence of a customs tariff (11.1 percent), restrictions or prohibition on certain
species of flora and fauna and certification requirements.
Distribution
In the cotton sector, to improve the efficiency and effectiveness of imports into Indonesia, the
Indonesian Custom and Excise Office held socialisation on the establishment of the Indonesian
Logistics Bonded Center (PLB, Pusat Logistik Berikat) in September 2015. The Indonesian
Logistics Bonded Center will serve as a temporary a storage center for goods before they are
re-exported or sent to areas outside of the logistics bonded center. The advantage of the logistic
bonded center for cotton imports is that imported cotton which is currently transshipped and
temporarily stored in Kuala Lumpur or Singapore will be able to be imported directly to
Indonesia. The cotton will remain property of the supplier, allowing spinners to buy as needed
directly from the logistic bonded center. After the regulation on this issue became effective,
the first center opened in March 2016.325
For live plants and flowers, distribution is mainly done through wholesale centers. One
wholesale market is located at Berastagi, especially on Tuesdays and Fridays, where flowers
are traded and distributed to different markets and flower shops in Medan. Another center is
located at Batu. Some of the growers act as traders as well and packing of flowers is done at
their home. According to the UN Food and Agriculture Organization, the current system is not
sufficient, as there is a need for a well-established wholesale market in Jakarta.
USDA Global Agricultural Information Network, Indonesia Cotton and Products Annual Report 2016, report
number ID1607, 28 March 2016, p. 4,
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Cotton%20and%20Products%20Annual_Jakarta_I
ndonesia_3-28-2016.pdf
325
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4. COMMUNICATION
4.1 How does the Consumer get Influenced: By whom and how?
Before exporting to Indonesia, it is essential for a European company to consider the country’s
consumer market, including where and how to connect with the local customers. As the
purchasing power continues to increase in Indonesia, outlooks for F&B retail sector expansion,
including hypermarkets, supermarkets, and minimarkets remain promising. Industrial and
urban areas, such as Jakarta, Makassar, Surabaya and Bandung, accommodate larger preference
and demand for foreign goods. In those areas more international groceries are present,
providing imported, higher-price, higher-quality, larger assortment options for Indonesian
middle and upper-class consumers. For those families with both working parents, the modern
markets provide one-stop solution for
several purposes, since in one building
Case Study: Go-Jek
complex you can also find laundry
services, beauty services, in house cafes
Go-Jek is a start-up based in Jakarta that utilises
and restaurants, floral shops, ATMs,
ojek, motorcycle taxis, to transport people and
home delivery services etc.
goods. Go-Jek differentiates itself with its
The convenience stores, such as such as
Alfamart and Indomaret, which are
mostly popular among younger
consumer group, are also rapidly
expanding.
Unlike,
the
local
minimarkets, convenience stores also
offer ready-to-eat foods and a dining
area. Other smaller food retailers are
locally owned groceries (Warungs) and
the minimarkets, both catering to
similar client groups. The lower income
groups are more likely to purchase from
Warungs for their convenience and
affordable prices. The convenience
stores and the minimarkets can often be
found in residential areas or next to
gasoline stations. They operate in a
more flexible manner, often according to
opened for 24 hours.
transparent pricing and driver tracking systems,
which assure customers of its security and
reliability. Go-Jek offers an instant courier
service, delivery of goods within 90 minutes to
anywhere in the city, as well as a shopping
service, whereby they shop for and deliver food,
tickets, medicines or anything under IDR 1
million and consumers pay with cash on
delivery. Over 50 companies in Jakarta currently
use Go-Jek’s services to deliver their products,
documents and even their employees. For
consumer business companies, this service can
help bypass indirect distributors and reach
customers in remote areas, including Warungs,
as well as better understand customer buying
patterns, exercise better control on the delivery
cycle and cut costs.
their local customers’ needs: for example, being
Traditional markets also remain an important retailer in Indonesia. Like small grocers, they
rely on personalised services, local product offerings, and location to remain competitive.326
The consumers associate traditional markets with lower costs. They prefer buying fresh meat
and seafood at traditional markets whereas, dairy and processed foods are purchased in modern
markets. Also, another comparison made between traditional and modern food retailers is the
product information that is believed to be more transparent and forthcoming at the modern
retailers.
326
U.S. Department of Agriculture, “Indonesia: Retail Foods: Retail Foods Update”, available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-222016.pdf.
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Managing the product distributors is the most crucial capability for driving growth in
fragmented trade. They underline that conducting performance reviews by evaluating their
performance, financial returns, sales performance, and outlet coverage can significantly
improve the sales outcome. Trade-promotion optimization (TPO) tools allow for better tradeinvestment decisions. TPO tools are used to measure the effects of a promotion on the entire
category on both the manufacturer and the retailer, and for developing guidelines for optimal
promotions by retailer, geographic region, and category. Furthermore, carrying out in-house
trainings of the sales representatives on the product background and traits plays great role in
the sales performance. The sales force has the potential of being the on-site promotional body
and providing potential clients with attractive information works in favor of the latter.
How to successfully present the products to the consumer?
While an increasing share of Indonesian consumers are exhibiting higher levels of
sophistication, the overall consumer habits introduce larger disparities between the urbanised
customers and those living in remote, hardly accessible areas. The urban, more modernised
consumer tends to consider attributes such as trust, quality of the product and production
methods in their purchase decisions. At the same time, consumers in remote areas are still
driven by basic daily needs and strongly influenced by the price factor. Consumers in Indonesia
tend to be influenced by in-store promotions and Point of purchase displays. Hereby, the actual,
real-life contact with the promoted product allows personal experience, builds trust and more
likely leads to a purchase. However, since Indonesian consumer base is more fragmented than
those in Europe, product owners and retailers are required to tailor their marketing strategies
and build more differentiated commercial relationships within one marketplace. That is
because the local client base has vastly different levels of disposable income as well as different
needs and wants. Another reason is that different client groups shop in different markets:
families with extended needs will prefer markets with larger assortment, whereas smaller
households can mostly satisfy their needs in smaller markets. Therefore, the producers should
consider customised packaging for different selling channels.
Foreign producers have to consider that not only the brand but also the product itself can be
completely new to the local consumer. Hereby, we shall ask how to make cheese or Champagne
or olives appealing for someone who has not come across with the product before. Often, the
local consumers are not aware of the cooking options where the unfamiliar products shall be
used or how they should be treated. Outdoor pop-up cooking stands and in-store point of
purchase displays, which introduce where and how foreign ingredients can be used and whih
offer free tasting samples have great impact on winning the local’s preference. Additionally,
disseminating information materials along with the products, for example attaching mini-sized
handbooks or leaflets with recipes where those products can be used, will simplify the purchase
decision. Additionally, selling a foreign product together with a local product - for example,
combining foreign barbeque sauce together with local meat product, will automatically draw
the customer’s interest to the unfamiliar side product, if they are familiar or used to buying the
local side product. Also, two foreign products can be combined which automatically guarantees
a wider client base for both products instead of one. To conclude, each and every marketing
decision shall derive from an in-depth analysis of the commercial venue and consumer groups
to which particular goods are targeted. Also, the follow-up on promotional campaigns allow
improving and applying more suitable marketing techniques.
Traditional promotion channels – TV, Radio, print periodicals
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The traditional media, including the most popular information channel – TV – continues to
dominate across the whole country. As such, television is the primary channel through which
Indonesian consumers obtain information about products and brands across most income
levels. That being said, digital media is gaining importance in urban areas. Word of mouth via
relatives, friends and colleagues, as well as in-store promotions, also plays important roles in
influencing purchase decisions.
The most widely read print (and online) magazine, focusing on culinary topics in Indonesia, is
“Foodies magazine” (www.thefoodiemag.com). It has a circulation number of 30,000 and is
widely distributed in hotels, cafes, restaurants in Jakarta and Bali. Foodie Magazine focuses
primarily on reports related to Indonesian food and the magazine has very high degree of
Indonesian context, unlike online magazines “Epicure Indonesia” (www.epicureasia.com) and
“Exquisite Taste Indonesia” (www.exquisite-taste-magazine.com) which still retain a large
share of content from overseas.
Modern promotion channels – Online platforms
450
400
25
350
20
300
250
15
200
10
150
Telephone Subscribers
Internet Users as Proportion of Overall Population
30
Millions
Indonesia’s Internet usage has risen sharply over the last few years and consumers – especially
the middle-income segment – are more connected than ever, with easy access to information.
Social networking is the most popular in the key cities, and while Indonesia leads the region in
terms of overall connectedness, active users of social media and online platforms as proportion
of overall population remains relatively low. This implies a huge, untapped potential for
consumer business companies to engage their consumers through digital platforms as Internet
penetration takes off.
Internet Users as Percentage of
Overall Population
Fixed Telephone Subscriptions
Mobile Phone Subscriptions
100
5
50
0
0
Figure 50 Indonesian Communication Channels327
While Facebook, Instagram and Twitter are some of the more popular social media platforms,
the Line, WhatsApp, Path and BlackBerry Messenger are also used as part of e-commerce
327
World Bank, World Bank Data, available at https://data.worldbank.org/country/indonesia.
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Tastes of Europe Indonesia – Market Entry Handbook
business strategies among the local companies. Also, some Indonesians turn to Youtube for
F&B related searches showing cooking shows, videos, recipes or new cooking techniques.
Instagram is particularly popular when sharing culinary and related lifestyle experiences.
While the internet and social media are widely and actively used in Jakarta - which has been
dubbed the social media capital of the world – consumers tend not to use this channel for
commercial purposes at this point in time. However, the trend of using social media for
commercial purposes among producers and retailers is rising. Therefore, advertising F&B
products and services on social media is gaining importance and is more frequently used to
influence the consumer’s purchase decisions. The online platforms are used to seek information
on products, share product reviews, user experiences and comment on products and services.
Therefore, the online word of mouth plays great role in succeeding in the local market.
The competition for the limited TV advertisement slots in Indonesia’s ten national TV stations
has become intense among mass marketing companies. Coupled with the typically lower
returns on investment (ROIs) from traditional media – ROIs from TV advertisements are
estimated to be only about half that of Social Media advertisements – companies have
increasingly begun to turn to the digital space to strengthen their marketing strategies. Despite
Indonesia’s nascent digital market, many global companies have managed to successfully
deploy social media to achieve their marketing objectives. Such efforts will certainly continue
and help to expand the role of social media in influencing consumer decisions as Internet
penetration rates continue to increase.
Some other food and beverage online mediums and food blogs in Indonesia include:
The Indonesian blog landscape does not offer any standout platforms related to local F&B
sector, although there are some culinary websites, such as “Epicure Indonesia”
(www.epicureasia.com) and “Exquisite Taste Indonesia” (www.exquisite-tastemagazine.com) that the locals and expats utilise when searching for F&B information in
Indonesia. In fact, the latter particularly focuses on gourmet food and wine in Indonesia.
Two of other online F&B related platforms are the “Zoomato” (www.zomato.com/indonesia)
and “Qraved Everytime” (www.qraved.com). The former comprises of an international online
search engine for dining out options, including in Indonesia. The latter is a more comprehensive
F&B online hub, including an online journal, blog, a dining guide, recommendations etc.
Some of the most popular food and beverage related TV shows in Indonesia include:
The F&B related TV shows have lately been on the downgrade due to the decreasing interest
among the local viewers. Nevertheless, some of the F&B TV shows being broadcast include:
•
•
•
The Chef’s Table at Net TV
The MasterChef and Junior MasterChef Indonesia at RCTI.
Asian Food Channel (AFC) is a food-focused channel that entertains viewers with a
range of local and international content from lifestyle to travelogue program formats.
The AFC is available in more than 10 countries, including in Indonesia on First Media
Channel 76 (Jakarta) & 40 (Surabaya), on Big TV Channel 209, Matrix TV Channel
25, Indovision Channel 240, Skynindo Channel 50, Nexmedia Channel 210, Topas TV
Channel 302, Play Media Channel 240, Biznet Channel 308, ICTA Channel 10 SD.
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•
Food Network is a lifestyle network that connects viewers to the food-related topics.
The Food Network is available in more than 10 countries in Asia Pacific, including in
Indonesia on Indovision Channel 241, Okevision Channel 241 and on Play Media
Channel 241.
4.2 Example of current communication campaigns made by main investor
Example #1 - Oreo
In the end of 2014 the Oreo launched a campaign called “Asyiknya Bersama” (translated as
“Fun Together”) that introduced ideas on how the whole family can have fun together with
Oreo cookies. The company successfully captures the importance of family in Indonesia and
leverages on that concept. Customers were encouraged to send photos and tweet about their
fun family activities around certain themes by using the hashtag #AsyiknyaBersama (transl.
Fun together). The campaign also engages Indonesian celebrities who endorse the products on
social media. Their advertisement clip has been viewed more than 870,000 times on YouTube
as of September 2016. The vast usage of digital devices has increased video advertisement,
allowing customers to be reached through a ‘story-telling’ approach, making product
promotion meaningful and relevant. With the case of Oreo, Indonesians are keen on taking
photos and sharing these on social media, thereby making the campaign very successful. Once
a campaign is published online, it starts being shared and re-posted, meaning that a successful
campaign can be shared by millions of internet users without the brand owner having to make
much effort in disseminating the information. Currently the Oreo Twitter page entitled
“Nikmati Oreo Sesukamu” promotes the use of the same named hashtag that in translation
means “Enjoy Unlimited Oreo”. As of 2016, the Twitter account has 9,584 tweets. The
“Nikmati Oreo Sesukamu” most watched YouTube video has almost 3 million views. In 2014
the Mini Oreo was launched in Indonesia with a marketing campaign delivered on digital media
channels and mainly on Facebook. They decided to move ahead from traditional television
promotion that often is seen as too saturated with advertisement. The Mini Oreo Facebook
campaign entails many cartoon-like videos with music and special effects that scored a 5-point
increase in purchase intent for the Oreo brand and reached 18.6 million young adults within a
6-week campaign. Another Oreo campaign launched in 2016, entitled “Wonderfilled” tries to
connect with Indonesians by using the Ramadhan. Since the Ramadhan period is associated
with giving gifts, Oreo’s biscuits leverage on that concept by urging people to hand their
products to one another. Their campaign urges consumers to ask themselves: "I wonder if I
gave an Oreo?" - deriving from the idea of reconnecting and celebrating existing relationships.
Example #2 – AQUA
AQUA, the bottled-water product belonging to the Danone Group starting from 2001, is
another successful branding example from Indonesia. One of Danone’s AQUA campaigns,
launched in 2015, inspires and encourages genuine acts of kindness in everyday situations. The
acts of everyday heroes should reflect the traits of purity, generosity and transparency ‘just like
water’ is associated with in Indonesia. Their marketing strategy includes television commercial
elements combined with extensive social media promotion. They have released video clips
showing hidden camera footage of genuine kindness on the streets of Indonesia, such as
pregnant lady being offered a seat, a person being helped to carry heavy bags upstairs or a
person collecting a dropped wallet and bringing it to the owner. The videos derive from the
core elements of social responsibility that builds up the trust and value to be associated with
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the brand and product. The campaign also encourages other people to share their stories of
genuine kindness online. Another Danone’s AQUA campaign comprises of several television
commercials, depicting funny situations where a person does a silly mistake due to dehydration.
Each of these commercials are concluded with a hashtag #adaAqua (transl. “(Have you) got
water?'). The adaAqua videos on YouTube have gathered millions of views and the campaign
delivered over 450,000 uses of #adaAqua hashtag. They SehatAQUA (translated as “Healthy
AQUA”) is present on most popular social media accounts, including on Facebook with over
2 million page likes, on Twitter with almost 260 000 followers, on Instagram with over 50 000
followers and on YouTube. Their YouTube channel, established in 2010, hosts some 156 videos
and has 5 838 subscribers and over 27 million views.
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5. DOS AND DON’TS
Indonesians are among the friendliest and most hospitable people on the planet. However,
Indonesians are also very indirect and unpredictable, as a “yes” accompanied by wide smile
might not necessarily translate to a sought-after approval for an agreement. They can also be
sensitive to slights: their friendliness can cause them to expect the same degree of reciprocity
from their counterpart.
Here are some tips on doing business in Indonesia:328
DO
•
•
•
•
Speak slowly without raising your voice. Most Indonesians speak in a low-toned,
subdued voice with carefully constructed words and people who speak in high would
come across as aggressive.
Avoid excessive physical contact in the first meeting as a simple, brief handshake
is supposed to be enough. Indonesians are generally conservative, and some men
and women could even avoid shaking the hands of their opposite sex, preferring to
introduce themselves by nodding their head and smiling instead.
Smile when you meet people you know. Javanese people appreciate a ‘polite smile’,
while bending down a bit when passing a group of older people is considered polite.
It is highly recommended to address someone by using specific terms before
mentioning the name. The hierarchical references are similar to, for example, Japan
(“San” for older person, “Kun” for similar age colleagues, and “Chan” for younger
friends).
Bapak (Pak) for Mr
Ibu (Bu) for Mrs.
Mas for young man
Mbak for Miss/ young woman
•
•
•
Take off your shoes before entering a house and, especially a place of worship like
mosque.
When eating, receiving or giving something, always use your right hand. Both the
Muslim and Hindu faiths abhor the use of the left hand – it is considered unclean.
When shaking hands, offering a gift or eating, it is proper etiquette to always use
your right hand. Try not to point in public, and definitely not with your left hand or
your right index finger. This is seen as rude. If you have to point, use your right
thumb with the fingers folded underneath.
Dealing with someone face-to-face is the only effective way of doing business in
Indonesia, so take your time building up strong business relationships. Initial
meetings with potential clients may be more about getting to know you; business
may not even be discussed. Be prepared to exercise patience in business.
Indonesians like to give matters sufficient consideration and don’t make hasty
decisions. If negotiating, avoid pressure tactics – they’re likely to backfire.
328
For further detailed information on Indonesian Language, Culture, Customs, and Business Etiquette, see:
Indonesian Business Etiquette, Language and Culture” available; http://www.commisceo-global.com/countryguides/indonesia-guide
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DON’T
• Never take every yes as a yes. Indonesians endeavor to be both gracious and polite.
Since saying “No” to someone is considered impolite, don’t assume that a positive
response means you have agreement. You should interpret a, “Yes, but–” as a clear
“No.” It is up to the listener to read between the lines and pay attention to body
language to get the real message.
• Do not shout and voice your expressions in unnecessarily strong tone, whether in
anger or in joy. Generally speaking, Indonesians rarely show their dislike or
reservations. Therefore, expressing anger in public through tone of voice, loudness
or body language is always deemed inappropriate.
• Keep in mind that religious Muslims pray five times a day, so do not schedule any
meetings or lunch dates during certain times, such as Friday afternoon at noon.
• Avoid using red ink when writing a person’s name. It is considered impolite, as red
was originally used to record the names of the deceased.
• Avoid criticizing in public and being too straightforward. The concept of saving face,
as well as respect and loyalty, is prevalent in the Indonesian culture. While you
may be used to openly air your displeasure, in Indonesia this would be considered
extremely disrespectful and bad etiquette. Indonesians hate confrontation due to
the potential loss of face. To be polite they may tell you what they think you want
to hear and mask their feelings under a veil of civility, but if an Indonesian begins
to avoid you or act coldly towards you, then you have probably offended him.
• You should never touch someone else’s head; in Indonesia it is commonly believed
that the soul inhabits the head, which is therefore considered sacred.
• It is strongly discouraged to exert pressure when dealing business, particularly
when it is related to timing and deadlines. Patience is highly appreciated as one of
the keys in winning business deal in Indonesia, while rushing an Indonesian
counterparty for approval might even backfire.
• In Indonesia it’s rude to talk while eating. Conversation is reserved for before or
after the meal. If you are a dinner guest, wait to be shown your place – you will
have been allocated a specific seat. In formal situations men are served before
women. Wait to be invited to eat before you start.
• Don’t be offended when people ask you a few personal questions. It’s just the way
they show friendliness and you can only smile and don’t have to answer the
question if you don’t want to.
• Indonesians value time highly but do not have strict views towards unpunctuality.
Do not be upset if an Indonesian, notably an important government official, come
late to the meeting – maintain kindness and patience, and do not raise the issue of
their tardiness at all during discussion.
Key Facts and Considerations
Business culture: Indonesia is a mainly Muslim country: even if you aren’t Muslim yourself,
you should be acquainted with the major Muslim practices and holidays. For example, bringing
alcohol as a gift to a practicing and devout Muslim is inappropriate as it is forbidden in Islam.
To the Indonesians generally (and in particular to the Javanese), form and face are extremely
important. Public shows of deference to one's elders or superiors lead to the 'Bapak Syndrome'
(the boss is always correct, and only he or she can decide).
Business relationships are based on trust in Indonesia: It is important to make personal
contact with potential partners when doing business in Indonesia. The key to success in
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negotiating a business partnership in Indonesia is clear communication and development of
long-term relationship. It is important to be very well prepared for the first meeting, as technical
data and pricing are very often discussed from the beginning. Indonesian partners are usually
reluctant to provide information on turnover, competition, and share of the market before they
meet in person. However, they will be more open once they meet and tend to release
information face-to-face.
Business is personal in Indonesia: Because of that, spend time through communication to
build a strong relationship. Dealing with someone face-to-face is the only effective way of
doing business. Indonesians abhor confrontation due to the potential loss of face. To be polite,
they may tell you what they think you want to hear. If you offend them, they will mask their
feelings and maintain a veil of civility. If an Indonesian begins to avoid you or acts coldly
towards you, there is a serious problem.
Organisational structure: The manager is expected to make decisions and to convey them, in
detail, to subordinates. The subordinate is then expected to carry out those instructions
precisely without any deviation (no more and no less), even in case that these instructions or
decisions are flawed. A subordinate would not disagree with the boss – and especially not in
public.
At peer level, managers will be expected to reach decisions through a consensus– forming
process, which can prove very time–consuming. It is important that during these peer level
discussions all parties strive to maintain the harmony of the group. Any individual who is
perceived to be causing disharmony is likely to be viewed with suspicion.
Business card: When you meet someone for the first time in a business environment, you
should introduce yourself with your full name and your organisation. Present a business card
to each person you are meeting. Offer your card with the printing positioned in a way that the
recipient can read it. Shaking hands is followed by the exchange of business cards. Business
cards should display your title. This helps enhance your image and credibility.
Address each person using his/her title plus full name. A title may be an honorific title or an
academic title. Rank and status is very important in this culture. One important honorific title
is for Muslims who have made a pilgrimage to Mecca. Haji is the title for a man, Hajjah is for
a woman. Mr., Madam, Mrs. or Miss are used if a person does not have a title. A man is
addressed as Pak (Mr.) or Bapak (Sir). A lady is addressed as Ibu. People are normally called
by their first name (for example Mr. Robert or Miss Susan), rather than using their last name.
Time and meetings: Time is not important; the relationship is the key issue. Time is elastic in
Indonesia – in fact it is referred to as “rubber time”. Do not be surprised if meetings start late
or finish late. Meetings may not necessarily start on time and guests may arrive late due to
traffic conditions.
People often do not confirm their participation in meetings/events, or they confirm at a much
later stage than is the case in the Europe. Last minute cancellations of meetings are fairly
common, so it is important to build flexibility into visit programmes to accommodate last
minute changes.
Negotiations can be lengthier than expectations: Multiple meetings may be necessary in
order to come to a final decision or agreement. Refrain from hurrying your Indonesian business
partners along, as this may be taken as an offense. Keep in mind that religious Muslims pray
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five times a day: if you conduct business with Indonesian Muslims, you should not schedule
any meetings or lunch dates during these times. Prayer times are listed at the local mosque.
Language and communication style: The official language is Bahasa Indonesia. English is
widely spoken by young people but interpretation may be required for business meetings,
particularly outside Jakarta and other major cities in Indonesia. Although there are significant
numbers of fluent English speakers, foreign language levels are, on the whole, nowhere near
as good as in neighboring Singapore and Malaysia.
It may be that several senior figures in an Indonesian delegation are very weak in English and
that a translator is needed. In any event be aware of the possibility of misunderstanding and
ensure that English is used in a very “user friendly way”.
It is respectful to leave a pause before answering a question and, by Western standards, these
pauses can seem quite lengthy. Do not be tempted to break the pause by speaking. Be patient
and allow your contacts the space to communicate in a comfortable manner. The use of body
language and facial expressions is limited, making it difficult for more expressive cultures to
interpret responses. Do not be disquieted by a seeming lack of fervour, this is the normal
cultural approach and is not an indication of lack of interest.
Refreshments and Gifts: The giving of small gifts to help develop and maintain business
relationships is also an indigenous Indonesian custom.
Gifts are not usually exchanged during first meetings but can be offered at subsequent events.
To avoid any hint of corruption, give small, corporate gifts. Gifts should always be opened in
front of the giver. The giving of gifts is quite common in Indonesian society as it reflects the
communal nature of traditional life. Souvenirs or small food items are usually given to coworkers when a manager returns from a long trip.
Traditional Indonesian society considers the giving of refreshments to guests as a very
important display of respect and politeness. If you are the host of a meeting with a Bapak, you
should make sure that some refreshment is offered. If you are the guest you will most probably
be offered tea or coffee. It is normally advisable to accept even if you are not thirsty. A guest
should wait for the host to indicate that it is permissible to drink.
Attire and clothing: Business attire is generally conservative. Women should dress
conservatively ensuring that they are well covered from ankle to neck. Tight fitting clothes are
best avoided. Dress in the office should be formal. Problems can develop in multicultural
offices if the foreign professionals wear blue jeans and T-shirts to the office. The Indonesian
co-workers perceived this as informal and disrespectful on the part of the expatriate.
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6. SYNOPSIS
6.1 Strengths, Weaknesses, Opportunities and Threats Analysis
Strengths
SWOT
Weaknesses
General
➢ Southeast Asia’s largest potential
market;
➢ Indonesia is the fourth most
populous country in the world (256
million people);
➢ Sustainable economic growth (Real
annual GDP growth in 2015: 4.8%)
➢ Sustainable FDI growth;
➢ Consistent development leading to
considerable foreign government
and multilateral support.
Product and Consumer Related
➢ Real economic growth is sustainable
at 4 percent to 6 percent in the
medium term due to remarkably
stable domestic consumer demand;
➢ Most of the population are on the
consumer class;
➢ Increased demand for dairy products
due to increased health
consciousness, westernised diets,
growing middle class and rising
incomes. Consumers value EU food
as healthy, top quality;
➢ Consumer expenditure on F&B has
been gradually increasing and
consumers now spend a considerable
amount of their budget to F&B;
➢ Consumers are becoming aware of
food safety issues and start to prefer
healthier food.
General
➢ Inadequate infrastructure;
➢ Java is the main area for commercial
opportunities;
➢ Persistent corruption and lack of
transparency;
➢ High levels of income inequality;
➢ Regulatory revisions might cause
business uncertainty especially for
foreign investments.
Product and Consumer Related
➢ High logistics and transportation
costs to move products to market;
➢ Geographically fragmented across
many large and small islands, the
country has a growing consumer
base but is difficult to navigate.
Opportunities
Threats
General
General
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➢ With over 220 million consumers,
Indonesia represents Southeast
Asia’s largest potential market;
➢ Major destination for FDI in Asia;
➢ The Masterplan for the Acceleration
and Expansion of Indonesia's
Economic Development Plan
(MP3EI 2011-2025 has positioned
Java to be the main economic
corridor for the food and beverage
industry;
➢ Transitioning from lower to middle
income society.
➢ High rates of inflation may lead to a
decrease in spending;
➢ Exchange rate depreciation may
discourage import consumption.
Product and Consumer Related
Product and Consumer Related
➢ Indonesia has great market potential
for European exporters of branded
and specialty food products, as well
as for suppliers of food ingredients
and packaging;
➢ Rising disposable incomes levels
have resulted in increased consumer
spending for a wide range of products
and services, which is backed by the
rapid growth of the middle class;
➢ A young and growing Indonesian
population that demand westernised
products;
➢ Increased urbanisation where
professionals have less time for
cooking, etc., and, as such, are keen
on buying packed imported foods;
➢ A growing awareness of healthy
lifestyle products;
➢ A growing Indonesian tourism
industry that demands imported
products;
➢ Cold chain is starting to expand in
Indonesia.
➢ Meeting halal requirements for the
world’s largest Muslim population
may be challenging;
➢ By 2019, halal certification will be
mandatory for all food, beverage,
drugs, cosmetics, chemicals, and
organic and agricultural biotech
products sold in Indonesia, as well
as machinery and equipment used in
processing these products, subject to
further implementing regulations;
➢ Strict government regulations and
control of the alcoholic beverage
industry;
➢ Prohibition of advertisements in
certain sectors such as alcoholic
beverages;
➢ High tariffs on imports especially
alcoholic beverages that may run up
to 150 percent of market price,
which has led to high retail prices;
➢ Increased marketing strategy is
needed for EU products such as
dairy, chocolate and derived
products and confectionaries, as
Indonesians tend to prefer the local
brands over the foreign brands;
➢ Chocolate, its derived products and
confectionery are still viewed as
luxury food, therefore, demand is
low;
➢ The demand for dairy free, gluten
free and sugar free products is
increasing.
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Tastes of Europe Indonesia – Market Entry Handbook
Table 3 S.W.O.T. Analysis
6.2 Key Criteria for Success
Product
•
•
•
•
•
•
•
Indonesia has great market
potential for European exporters
of branded and specialty food
products, as well as for suppliers of
food ingredients and packaging;
There is a growing awareness of
healthy lifestyle products;
By 2019, halal certification will be
mandatory for all food, beverage,
drugs, cosmetics, chemicals, and
organic and agricultural biotech
products sold in Indonesia, as well
as machinery and equipment used
in processing these products,
subject to further implementing
regulations;
Strict government regulations and
control of the alcoholic beverage
industry;
Temperate fresh fruit, processed
fruits and vegetables and beef are
mostly imported;
Western cuisine is becoming more
common and western products
such as breakfast cereals, spreads
and baked goods are often
consumed in the place of
traditional rice or noodle
breakfasts;
Changing dietary habits are
driving consumption growth of
milk, yoghurt, cheese, pasta, meat
nuggets, sausages, and red meats.
Promotion
•
•
•
•
•
Consumers in Indonesia tend to be
influenced by in-store promotions
and point of purchase displays.
Therefore, the actual, real-life
contact with the promoted product
allows personal experience, builds
trust and more likely leads to a
purchase;
There is the prohibition of
advertisements in certain sectors
such as alcoholic beverages.
Hence, promoting alcoholic
beverages in Indonesia will be
hard;
Producers should consider
customised packaging for different
selling channels;
The traditional media, including
the most popular information
channel – TV – continues to
dominate across the whole
country. While digital media is
gaining importance in urban
areas, Television is the primary
channel through which Indonesian
consumers obtain information
about products and brands across
most income levels;
The trend of using social media for
commercial
purposes
among
producers and retailers is rising.
Therefore,
advertising
F&B
products and services on social
media is gaining importance and is
more frequently used to influence
the consumer’s purchase decisions.
The online platforms are used to
seek information on products,
share product reviews, user
experiences and comment on
products and services. Therefore,
the online word of mouth plays
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Tastes of Europe Indonesia – Market Entry Handbook
great role in succeeding in the local
market.
Placement
•
•
•
•
•
Industrial and urban areas, such
as Jakarta, Makassar, Surabaya
and Bandung, accommodate
larger preference and demand for
foreign goods. In those areas more
international groceries are
present, providing imported,
higher-price, higher-quality,
larger assortment options for
Indonesian middle and upper class
consumers;
The convenience stores, such as
such as Alfamart and Indomaret,
which are mostly popular among
younger consumer group, are also
rapidly expanding;
Convenience stores and the
Minimarkets can often be found in
residential areas or next to gasoline
stations. They operate in a more
flexible manner, often according to
their local customers’ needs, for
example being opened for 24
hours;
Traditional markets also remain
an important retailer in Indonesia.
Consumers prefer buying fresh
meat and seafood at traditional
markets whereas, dairy and
processed foods are purchased in
modern markets;
Client groups shop in different
markets: families with extended
needs will prefer markets with
larger assortment, whereas
smaller households can mostly
satisfy their needs in smaller
markets.
Price
•
•
•
•
Rising disposable incomes levels
have resulted in increased consumer
spending for a wide range of products
and services, which is backed by the
rapid growth of the middle class;
Even though Indonesia’s rising
middle class is willing to pay more
for quality goods and imported
foreign goods, they are still
relatively price sensitive and find
foreign products too expensive.
When calculating the price, thorough
market research is recommended;
Considering traditional retailers’
dominance among the retail
channels, package-size flexibility
and low prices are a must in order to
be on the same competitive level
with other products (local food
products continue to be strong sellers
because of a lower price);
It is also recommended to discuss
the price with the local distributors,
to determine what would be the
realistic price on the market.
Table 4 Key Criteria for Success
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7. SUPPORT SERVICE DIRECTORY
7.1 European Union Organizations
Several EU funded or co-funded projects within Indonesia offer a range of business facilitation
services and information providing important insights into the Indonesian market. Depending
on your company profile these services can be free or fee based; and are available for
companies from any EU Member State.
•
The EU-Indonesia Business Network (EIBN)
The EU-Indonesia Business Network (EIBN) was initiated in August 2013 as a five-year
program co-funded by the European Commission, and is the product of a partnership between
EKONID, EuroCham Indonesia, IFCCI, INA, BritCham, EUROCHAMBRES and CCI
Barcelona. The aim of the EU-Indonesia Business Network is to enhance and diversify trade
and European business investment in Indonesia, while promoting the country as a gateway to
ASEAN. EIBN seeks to contribute to a more coherent and effective EU strategy for supporting
and attracting European businesses, specifically SME’s, both those already in Indonesia and
those expanding their activities.
Contact:
Address: C/O EKONID. Jl. H. Agus Salim No. 115, Jakarta 10310
Website: http://www.eibn.org/en/page/contacts_new
Telephone: +62 21 3154685
E-mail: info@eibn.org
•
The European Chamber of Commerce in Indonesia (EuroCham)
The European Chamber of Commerce in Indonesia (EuroCham) is the principal business
organisation in Indonesia, which promotes European business interests and represents
European member companies. EuroCham maintains close working relationships with the
European Commission, European Union Delegation, European Bilateral Chambers of
Commerce in Indonesia, and European Embassies in Indonesia. EuroCham's mission is to
serve the member companies by being the voice of European business in Indonesia and by
lobbying on trade and investment related issues.
Contact:
Address: Wisma Metropolitan 1, 13th Floor Jl. Jend Sudirman Kav. 29-31
Jakarta, 12920 Indonesia
Website: http://www.eurocham.or.id/
Telephone: (+62 21) 571 0085
E- mail: info@eurocham.or.id
•
EU-ASEAN Business Council (EU-ABC)
The EU-ASEAN Business Council (EU-ABC) is the primary voice for European Business
within the ASEAN region, being endorsed as it is by the European Commission and recognised
as such by ASEAN. Independent of both bodies, the Council has been established to help
promote the interests of European businesses operating within ASEAN and to advocate for
changes in policies and regulations which would help promote trade and investment between
Europe and the ASEAN region. As such, the Council works on a sectorial and cross-industry
basis to help improve the investment and trading conditions for European Businesses in the
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Tastes of Europe Indonesia – Market Entry Handbook
ASEAN region through influencing policy and decision makers throughout the region and in
the EU, as well as acting as a platform for the exchange of information and ideas amongst its
members and regional players within the ASEAN region.
Contact:
Address: 1 Phillip St #12-01. Royal One Phillip. Singapore 048692
Website: http://eu-asean.eu/
Telephone: +65 6836 6681
E-mail: info@eu-asean.eu
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Tastes of Europe Indonesia – Market Entry Handbook
7.2 Directory of EU Member States’ Embassies
Individual Member States offer commercial support and services for companies from their country of origin. Make enquiries to see what services
are available and if there are any upcoming events you can participate in.
EU Member
State
Austria
Address
Website
Contact information
Jalan Diponegoro 44
Menteng, Jakarta Pusat 10310
Deutsche Bank Building 16th floor.
Jalan Imam Bonjol 80. 10310 Jakarta
Jakarta 10310, 34-36, Jalan Imam
Bonjol
Menara Mulia-Suite 2801. Jl. Gatot
Subroto Kav. 9-11. Jakarta 12930
http://www.austrian-embassy.or/
+62 21 23554005
http://indonesia.diplomatie.belgium.be/en
+62 21 316 20 30
http://www.mfa.bg/embassies/indonesia/setlang/en
+62 21 390 40 48
http://id.mvep.hr/en
+0062 21 525 7822, 525 76
11
Cyprus
Menara Sudirman 7th Floor B
JI. Jendral Sudirman KAV 60
Jakarta 12190
http://www.mfa.gov.cy/mfa/mfa2006.nsf/0/49c95b
70b5a9bb1dc22571b70033c49e?OpenDocument
+6221 522683739
Czech
Republic
Denmark
Jl. Gereja Theresia 20, Menteng, Jakarta http://www.mzv.cz/jakarta/en/
10350
Menara Rajawali, 25th FloorJl. DR Ide
http://indonesien.um.dk/
Anak Agung Gde AgungKawasan Mega
KuninganJakarta 12950P.O. Box 4459
Jl. Pinang Emas III/17, Pondok Indah
http://www.consulateestoniajakarta.com/contact-us
+62 21 2396112
Menara Rajawali 9th
Jl. Mega Kuningan. Lot 5.1, Kuningan.
12950 Jakarta.
Jl. MH. Thamrin n°20 Jakarta Pusat
10350
http://www.finland.or.id/
+62 212 939 3000
http://www.ambafrance-id.org/-Francais-
+(62-21) 2355 7600
Belgium
Bulgaria
Croatia
Estonia
Finland
France
+62 (21) 576 1478
+62 021-766 6060
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Germany
Jl. M.H. Thamrin 1
Jakarta 10310
http://www.jakarta.diplo.de/Vertretung/jakarta/en/
Startseite.html
+(62-21) 3985 5000
Greece
Plaza 89,12th floor,Suite 1203, JL.
Rasuna Said, kav. X-7 No 6, Jakarta
http://www.mfa.gr/missionsabroad/en/indonesia.ht
ml
+(006221) 5207776
Hungary
Jalan Rasuna Said X/3. Kuningan,
Jakarta 12950 Indonesia
World Trade Centre 1
L-14
Jl.Jend. Sudirman kave 29-31
Jakarta 12920
Jalan Diponegoro no. 45 - Menteng
Jakarta 10310
Indonesia
http://www.mfa.gov.hu/kulkepviselet/ID/en/
+ 62 21 520 3459
https://www.dfa.ie/irish-embassy/indonesia/
+62 21 280 94300
http://www.ambjakarta.esteri.it/Ambasciata_Jakart•
a
+ 0062 (0) 21 31 93 74 45
Sentra Pemuda 5-6, Jalan Pemuda No.
61, Rawamangun, Jakarta 13220
Jalan Jeruk No. 4,
Menteng, Jakarta 10350
http://www.consulate.lv/
+ 62 21 2957 501
http://www.honoraryconsuls.lt/countries/indonesia
+ 62 21 2553 9496
Embassy in Thailand is accredited for
Indonesia
Q House Lumphini 17th Floor
1 South Sathorn Road
Tungmahamek Sathorn
Bangkok 10120 Thailand
No representation
http://bangkok.mae.lu/en/L-Ambassade
+ 66 (0)2 677 7360
Jalan HR Rasuna Said Kav.S-3
Jakarta 12950
Indonesia
http://indonesia.nlembassy.org/
Ireland
Italy
•
Latvia
Lithuania
Luxembourg
Malta
Netherlands
•
No representation
•
No representation
+62 21 524 82 00
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Tastes of Europe Indonesia – Market Entry Handbook
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United
Kingdom
H.R. Jl. Rasuna Said Kav.X Blok IV/3
12950 Jakarta
Jl. Indramayu No. 2A, Menteng,
Jakarta 10310, Indonesia
http://www.dzakarta.msz.gov.pl/en/home_page
+ (+ 62 21) 25 25 938-40
http://www.embassyportugaljakarta.or.id
+62-21 3190-8030
Jl. Teuku Cik Di Tiro 42 A, Menteng,
Jakarta Pusat 10310
Jl Prof Hm Yamin Sh 29 Menteng
Jakarta Pusat 10310, Tlp 021-3101068,
3151429, Indonesia
The Embassy in Australia is accredited
for Indonesia
26 Akame Circuit
O'Malley 2606 ACT
Australia
Jl. Haji Agus Salim, 61 Jakarta Pusat –
10350
http://jakarta.mae.ro/en
+ (0062-21) 390.04.89
https://www.mzv.sk/web/jakarta-en/about_us
+62 21 3101068
http://canberra.embassy.si/en
+61 2 6290 0000
http://www.exteriores.gob.es/Embajadas/YAKAR
TA/es
+62 21 314 23 55
Menara Rajawali, 9th floor
Kawasan Mega Kuningan, Lot 5.1
12950 Jakarta
Jl Patra Kuningan Raya Blok L5-6
Jakarta. 12950
http://www.swedenabroad.com/enGB/Embassies/Jakarta/
+62 21 2553 5900
https://www.gov.uk/government/world/organisatio
ns/british-embassy-jakarta/office/passport-andconsular-services-jakarta
+62 21 2356 5200
Table 5 Directory of EU Member States’ Embassies
7.3 Other organizations and service providers
Other service providers that offer business facilitation and assistance for companies are often
provided on a fee paying basis. These service providers often work with, or are part of, the commercial sections of their respective governments
and embassies.
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Tastes of Europe Indonesia – Market Entry Handbook
Chamber
Website
Address
Contact
BRITCHAM
Indonesia
http://www.britcham.or.id/
Wisma
Metropolitan I
F/15,
Jln. Jend. Sudirman
Kav. 29 - 31,
Jakarta - 12920
BRI II, 15th Fl.
Suite 1501
Jl. Jend. Sudirman
No. 44-46, Jakarta
10210 Indonesia
Tel.: +62 21 5229453
Email: busdev@britcham.or.id
Jl. Wijaya II No.
36, Kebayoran
Baru
Jakarta Selatan,
Indonesia
Tel. +62 21 7397161
E-mail: contacts@ifcci.com
IBAI Italian
Business
Association
Indonesia
http://id.ibai.or.id/
IFCCI
Indonesian
French
Chamber
http://www.ifcci.com/
SBA Swedish
Business
Association in
Indonesia
http://www.sbaindo.org/
INAIndonesian
Benelux
Chamber of
Commerce
http://www.ina.or.id/
Phone: +62-21-5713540
Email: megsinta@dnet.net.id
or luigicarlo.gastel@pirelli.com
Please contact the SBA via their website:
http://www.sbaindo.org/?page_id=32
Menara Jamsostek
Building Tower A
20th floor, Jl. Jend.
Gatot Subroto No.
38, Jakarta 12710
Tel. +62-21-52902177
Email. ina@ina.or.id
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Tastes of Europe Indonesia – Market Entry Handbook
AHK GermanIndonesian
Chamber of
Industry and
Commerce
http://indonesien.ahk.de/en/
Indonesian
Netherlands
Association
http://www.ina.or.id/
Indonesian
Chamber of
Commerce and
Industry
http://www.bsd-kadin.org/
Jl. H. Agus Salim
No. 115, Jakarta
10310
P.O. Box 3151,
Jakarta 10031,
Indonesia
Menara Jamsostek
Tower A, 20th
Floor
Jl. Gatot Subroto
No. 38. Jakarta
12710
Tel: +62-21-3154685
For enquiries:
http://qms.ekonid.com/en/page/redirect/UYGrwx
Menara KADIN
Indonesia, 24th
Floor
Jl. H. R. Rasuna
Said X-5 Kav. 2-3
Jakarta 12950
INDONESIA
Tel: +62-21-5274503
Tel. +62 21 52902177
E-mail: ina@ina.or.id
Email: info@bsd-kadin.org
Table 6 Chambers of Commerce and Other Associations
Service Provider
Austrian Economic Chambers
Oesterreichisch e Kontrollbank
Aktiengesellsch aft (OeKB)
Website
https://www.wko.at/Content.Nod
e/wi
r/Austrian_Economic_Chambers_
Hom e.html
http://www.oekb.at/
Address
Wiedner Hauptstraße 63 1045 Vienna,
Austria
Telephone
Tel: +43 5 90 900 Fax: +43
5 90 900 250 Email:
office@wko.at
Oesterreichische Kontrollbank
Aktiengesellschaft Am Hof 4;
Strauchgasse 3 1011 Vienna, Austria
Tel: +43 1 53127-2859
Fax: +43 1 53127-5698
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Tastes of Europe Indonesia – Market Entry Handbook
Email:
corporate.communications@
oekb.at
Brussels Invest & Export
http://www.investexport.irisnet.be/en/nos-services
Brussels Invest & Export Foreign trade
and foreign investments service of the
Brussels Regional Public Service Avenue
Louise 500/4 1050 Brussels, Belgium
Tel: +32 (0)2 800 40
00 Fax: +32 (0)2 800 40
01 Email:
info@brusselsinvestexport.b
e
Finexpo Service
http://diplomatie.belgium.be/en/p
olic
y/economic_diplomacy/finexpo/
FPS Foreign Affairs, Foreign Trade and
Development Cooperation, rue des Petits
Carmes 15 1000 Brussels, Belgium
Email:
finexpo@diplobel.fed.be
Delcredere | Ducroire
http://www.delcredereducroire.be
/en /about-us/mission/
Delcredere - Ducroire Rue
Montoyerstraat 3, 1000 Brussels, Belgium
Tel: + 32 (0)2 788 88
00 Fax: + 32 (0)2 788 88
10 Email:
businessdevelopment@crede
ndogr oup.com
Wallonia
http://www.awex.be/deDE/Pages/Home.aspx
AWEX-Regionalbüro Eupen Hütte, 79/20
4700 Eupen Belgium
Tel: 32-87-56.82.19 Fax: 3287-77.33.50 Email:
mail@awex.be
Belgium Corporation for
International Investment
http://www.bmisbi.be/en/produits.html
SBI Avenue de Tervueren 168, bte 9 B1150 Brussels, Belgium
Tel: +32 2 776 01 00 Fax:
+32 2 770 66 38 Email:
info@bmi-sbi.be
Bulgarian Chamber of
Commerce and Industry
http://www.bcci.bg/bcciservices.html
9 Iskar Str., 1058, Sofia , Bulgaria
Tel: +359 2 8117 400, 987
26 31 Fax: +359 2 987 32
09 Email: bcci@bcci.bg
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Tastes of Europe Indonesia – Market Entry Handbook
Ministry of Economy, Republic
of Bulgaria
http://www.mi.government.bg/bg/ 8, Slavyanska Str., 1052 Sofia, Bulgaria
th emes/informacionni-resursi-naevropeiskiya-sayuz-koito-mogatda-se- izpolzvat-ot-targovskiteoperatori- 350-335.html
http://customs.bg/en/page/150
National Customs Agency Rakovski 47
Sofia 1202 Bulgaria
Tel: +359 2 9407001 Fax:
+359 2 987 2190 Email: edocs@mi.government.bg
Trade Service
http://www.mcit.gov.cy/mcit/trad Trade Service Ministry of Energy,
e/ts.nsf/All/5F12C634BFA9CF8F Commerce, Industry and Tourism 1421
C2257BE10030AD5C?OpenDoc Nicosia Cyprus
ument
Tel: +357 22 867123 Fax:
+357 22 375120 Email:
ts@mcit.gov.cy
OEB: Cyprus Employers and
Industrialists Federation
http://en.oeb.org.cy/
2 Acropoleos Ave. & Glafkou Str, P.O
Box 21657 1511 Nicosia Cyprus
Tel: +357 22 66 51 02 Fax:
+357 22 66 94 59 Email:
info@oeb.org.cy
Germany Trade & Invest
http://www.gtai.de/GTAI/Navigat
ion/EN/Trade/Service/informatio
n- service.html
http://kina.um.dk/en/the-tradecouncil/products-and-services/
Villemombler Straße 76 53123 Bonn,
Germany
Tel: +49 228 249 93-0 Fax:
+49 228 249 93-212
Tel: +45 33 92 05 00 Email:
eksportraadet@um.dk
Tel: +372 604 0060 Fax:
+372 604 0061 Email:
koda@koda.ee
The National Customs Agency
The Trade Council
The Danish Business Authority
http://danishbusinessauthority.dk/
eu-and-international
Ministry of Foreign Affairs of Denmark
Asiatisk Plads 2 DK-1448 Copenhagen,
Denmark
Langelinie Allé 17 2100 Copenhagen,
Denmark
Estonian Chamber of Commerce
and Industry
http://www.koda.ee/en/chamberof- commerce/services-2/
Main office in Tallinn: Toom-Kooli 17
10130, Tallinn, Estonia
Tel: +359 2 9859 4210
Email: pr@customs.bg
Tel: +4535291000 Email:
erst@erst.dk
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Tastes of Europe Indonesia – Market Entry Handbook
Enterprise Greece
http://www.investingreece.gov.gr/ 109 Vasilisis Sophias Avenue 115 21
Athens, Greece
Spain Export and Invest
http://www.icex.es/icex/es/index.
html
ICEX España Exportación Inversiones
Paseo de la Castellana 14 28046 Madrid
Spain
Finnpartnership
http://www.finnpartnership.fi/ww
w/en/
Uudenmaankatu 16 A, 3rd floor 00120
Helsinki, Finland
Nordic Project Fund
http://www.nopef.com/pages/eng/
no pef/about-nopef.php
Tel: +358 (0)10 618 003
Email: info@nopef.com
Viexpo
http://www.viexpo.fi/services/
Tekes
http://www.tekes.fi/en/programm
es- and-services/grow-and-goglobal/
Nordic Environment Finance Corporation
NEFCO, PB 241, FI-00171 Helsingfors,
Finland
Runeberginkatu 11 FI-68600 Pietarsaari,
Finland
P.O.Box 69, FI-00101 Helsinki, Finland
Visiting Address: Kyllikinportti 2, LänsiPasila FIN-00101 Helsinki, Finland
Business France
http://www.businessfrance.fr
UCCIFE: Chambres de
Commerce et d'Industrie
Françaises à l'Etranger
http://www.ccifranceinternational.org/
77, Boulevard Saint-Jacques 75014 Paris,
France
46 avenue de la Grande Armée, CS
50071, 75 858 Paris Cedex 17 , France
http://www.businessfrance.fr
/contact/
Tel: +33 01 4069 3760 Fax:
+33 01 4069 3783 Email:
infos@uccife.org
Budapest Chamber of
Commerce and Industry (BCCI)
http://www.bkik.hu/en#
Krisztina krt 99, 1016 Budapest, Hungary
Tel: +36 (1) 488 2000 Fax:
+36 (1) 488 2108 Email:
ugyfelszolgalat@bkik.hu
Tel: +30 210 335 5700 Fax:
+30 210 324 2079 Email:
info@enterprisegreece.gov.g
r
Tel: +900 349 000 Contact
Form:
http://www.icex.es/icex/es/n
avegac ion-principal/que-esicex/contacto/formulario-decontacto/index.html
Tel: +358 9 348 434 Email:
fp@finnpartnership.fi
Tel: +358 6 781 6440 Email:
viexpo@viexpo.fi
Tel: +358 29 50 55000
Email: kirjaamo@tekes.fi
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Tastes of Europe Indonesia – Market Entry Handbook
Hungarian Foundation for
Enterprise Promotion
http://www.mva.hu/english.php
Szépvölgyi út 135., Budapest, III. 1277
Budapest 23, Pf: 4, Hungary
Tel: +36 1 883 0800 Fax:
+36 1 883 0841 Email:
info@mva.hu
Enterprise Ireland
http://www.enterpriseireland.com/en/ExportAssistance/
Bord Bia (Irish Food Board)
www.bordbia.ie/
Italian Trade Agency
http://www.ice.gov.it/home.htm
Via Liszt 21, 00144 Roma, Italy
Tel: +39 06 5992 9439
Email: ice@pec.ice.it
Regione Emilia Romagne
http://imprese.regione.emiliaromagna.it/
Viale Aldo Moro 44, 40127 Bologna,
Italy
Kaunas Chamber of Commerce,
Industry and Crafts
http://chamber.lt/EN/Home/Servi
ces
Luxinnovation
http://en.luxinnovation.lu/Service
s
Kaunas Chamber of Commerce K.
Donelaicio str. 8, 44213 Kaunas,
Lithuania
7, rue Alcide de Gasperi L-1615
Luxembourg
Tel: +39 051
5276309 Email:
sportelloestero@regione.emi
lia- romagna.it
Tel: +370 37 229212 Email:
chamber@chamber.lt
Investment and Development
Agency of Latvia
http://www.liaa.gov.lv/en
2 Perses Street, Riga, LV-1442, Latvia
Latvian Guarantee Agency
http://www.lga.lv/index.php?id=1
&L=1
Zigfrīda Annas Meierovica bulvāris 14,
Rīga, 1050, Latvia
Tel: +352 43 6263
Ext.1 Fax: +352 43
8120 Email:
info@luxinnovation.lu
Tel: +371 67039400 Fax:
+371 67039401 Email:
liaa@liaa.gov.lv
Tel: +371 67216081 Fax:
+371 67359374 Email:
lga@lga.lv
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Tastes of Europe Indonesia – Market Entry Handbook
GRTU Malta Chamber of SMEs
http://www.grtu.org.mt/index.php
/about-grtu/about-grtu
GRTU, Malta Chamber of SMEs
Exchange Buildings, Republic Street,
Valletta, Malta
Tel: +356
21232881 Contact Form:
http://www.grtu.org.mt/inde
x.php/ contact-us
Chamber of Commerce
Amsterdam
http://www.kvk.nl/english/interna
tion al-trade/
De Ruyterkade 51013, Amsterdam, The
Netherlands
Tel: +31 20 531 40
00 Email:
info@amsterdam.kvk.nl
Netherlands Enterprise Agency
http://english.rvo.nl/home/about(RVO) / Agentschap NL (AGNL) rvonl/what-is-rvonl
RVO.nl in The Hague (Centre Court)
Prinses Beatrixlaan 2 2595 AL The
Hague, The Netherlands
Postal address: P.O. Box 93144 2509 AC
The Hague, The Netherlands
Tel: +31 88 602 50 00 Fax:
+31 88 602 90 23 Contact
Form:
http://english.rvo.nl/home/ab
out- rvonl/what-isrvonl/contact-form
Polish Agency for Enterprise
Development
http://en.parp.gov.pl/
Polska Agencja Rozwoju
Przedsiębiorczości ul. Paoska 81/83, 00834 Warsaw, Poland
Tel: +22 432 80 80, 432 71
25 Fax: +22 432 86
20 Email:
biuro@parp.gov.pl
AICEP Portugal Global
http://www.portugalglobal.pt/EN/
Pag es/Index.aspx
http://www.almi.se/English/
N/a
Tel: +46 0771 55 85 00
Email: info.lanadm@almi.se
Slovak Investment and Trade
Development Agency, Trnavská cesta
100 821 01 Bratislava, Slovak Republic
Tel: +421 2 58 260 100, 101
Fax: +421 2 58 260 109
Email: sario@sario.sk
Innovationsbro nAB
SARIO (Slovak Investment and
Trade Development Agency);
and Slovak Chamber of
Commerce and Industry
http://www.sario.sk/en
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Tastes of Europe Indonesia – Market Entry Handbook
United Kingdom Trade and
Investment (UKTI)
https://www.gov.uk/government/ UKTI head office (General Enquiries) 1
organisations/uk-trade-investment Victoria Street London, SW1H 0ET, UK
Tel: +44 020 7215
5000 Email:
enquiries@ukti.gsi.gov.uk
Table 7 Service Providers
LOCAL BODIES AND ASSOCIATIONS
Organisation
Website
Address
Contact
Indonesian Food and Beverage
producers association
(GAPMMI)
http://www.gapmmi.or.id/
Sekretariat GAPMMI
Gedung Annex Lantai 2 (Kompleks PPM
Manajemen)
Jl. Menteng Raya No. 9-19
Jakarta Pusat 10340
Tel. (021) 39899830
Email:
gapmmi@cbn.net.id
National Agency of Food and
Drug Control (NA-DFC)
http://www.pom.go.id/new/index.
php/home/en
Jl. Percetakan Negara No.23 - Jakarta
10560 Indonesia
Tel : (021)
4244691/42883309/42883
462
Email : ppid@pom.go.id
Ministry of Trade of the
Republic of Indonesia
http://www.kemendag.go.id/en
M. I. RidwanRais Road, No. 5 Central
Jakarta 1011
Tel: (021) 3858171
Email:
contact.us@kemendag.go.
id
(Only in local language)
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Tastes of Europe Indonesia – Market Entry Handbook
Ministry of Agriculture of the
Republic of Indonesia
http://www.pertanian.go.id/ (Only Jl. Harsono RM. No. 3, Ragunan-Jakarta
in local language)
12550, Indonesia
National Investment
Coordinating Body (BKMP)
http://www6.bkpm.go.id/
Agricultural Quarantine
Agency-Ministry of Agriculture
of the Republic of Indonesia
http://karantina.pertanian.go.id
Jl. Jend. Gatot Subroto No. 44, Jakarta
12190
P.O. Box 3186, Indonesia
Gedung E Lantai 1,5,7 Jl. Harsono RM.3
Ragunan Jakarta Selatan 12550 Indonesia
Tel: 021-7806131, 0217804116.
Email :
webmaster@pertanian.go.
id
Tel: +62 21 520 2050
Email: info@bkpm.go.id
Tel: +62 21-7816480 – 84
Email:
infokarantina@pertanian.
go.id /
humaskarantina@pertania
n.go.id
Table 8 Local Bodies and Associations
7.4 Calendar of trade events and exhibitions
Attending trade events and exhibitions can help promote your product in Indonesia as well as forge relationships with industry figures and useful
business contacts.
Event
Focus
Date
Recurrence
City
East Food
Indonesia
For the
Indonesian
and ASEAN
F&B sector
26-29
July
2018
Annual
Surabaya
Website
http://eastfoodin
donesia.com/
Venue
Organiser details
Grand City –
Surabaya
KRISTAMEDIA
PRATAMA
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Tastes of Europe Indonesia – Market Entry Handbook
Event
Focus
Date
Recurrence
Cafe and
Brasserie
International
Indonesia Expo
International
Exhibition
for the Café
& Brasserie
Industry
8-10
Septemb Annual
er 2017
Allpack
Indonesia
Food
Processing
& Packaging
1-4
Novemb
er 2017
Food
Ingredients
Indonesia
Food and
beverage
ingredients.
Global
audiences.
3-5
October
2017
Annual
Annual
City
Website
Venue
Jakarta
http://www.cafebra
sserie-expo.co.id
Jakarta
Convention
Center
Jakarta
http://allpackindonesia.com/
JIExpo –
Kemayoran,
Jakarta
Jakarta
http://www.figlobal Jakarta
.com/asiaInternational
indonesia/
Expo, Indonesia
Organiser details
Email:
info@kristamedia.
com
Tel: +62-21.
6345861
Reed Panorama
Exhibitions
Email:
info@reedpanoram
a.com; cafebrasser
ie@reedpanorama.
com
Tel: +62 21 2556
5000
KRISTAMEDIA
PRATAMA
Email:
info@kristamedia.
com
Tel: +62-21.
6345861
UBM
Contact:
http://www.figloba
l.com/asiaindonesia/about/ev
ent-contact
Tel: +44 (0) 20
7921 5000 (U.K.
Head Office)
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Tastes of Europe Indonesia – Market Entry Handbook
Event
Focus
SIAL Interfood
ASEAN
Indonesia
For the
Indonesian
and ASEAN
F&B
Industry
Health
Ingredients
Southeast Asia
Vitamins,
dietary
supplements
for children,
fortified and
functional
food
and beverag
es,
and healthy
snacks with
various
health benefi
ts.
International
Seafood and
Meat Expo
(IISM)
Cold chain
and
refrigeration
industries
Date
22-25
Novemb
er 2017
27-29
March
2018
Recurrence
Annual
Annual
28-30
Septemb Annual
er 2017
City
Jakarta
Jakarta
Jakarta
Website
Venue
Organiser details
http://sialinterfood.
com/
Jakarta
International
Expo,
Kemayoran,
Indonesia
KRISTAMEDIA
PRATAMA
Email:
info@kristamedia.
com
Tel: +62-21.
6345861
http://www.figlobal Jakarta
.com/hisoutheastasi International
a/
Expo
UBM
Contact:
http://www.figloba
l.com/hisoutheasta
sia/about/eventcontact
Tel: +44 (0) 20
7921 5000 (U.K.
Head Office)
http://www.iismexpo.com/
Jiexpo
Kemayoran
Jakarta Indonesia
PT. PELITA
PROMO
INTERNUSA
Email:
iism@pelitapromo.
com
Tel: 62-2153660804
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Tastes of Europe Indonesia – Market Entry Handbook
Event
Food & Hotel
Indonesia
Food, hotel and
tourism Bali
Indo Fisheries
Expo & Forum
Focus
Bakery,
meat,
poultry,
dairy,
seefood,
confectioner
y, frozen
foods.
Food &
Beverages,
Hospitality
Equipment,
Services &
Interiors,
Bakery.
Date
Recurrence
10-13
April
2019
1-3
March
2018
Animal feed,
aquaculture
4-6 July
breeds,
2018
equipment.
City
Jakarta
Website
Venue
http://foodhotelind
Jiexpo
onesia.com/exhibiti
Kemayoran
ng/exhibit-profile/
Once every 2
years
Bali
http://fhtbali.com/
Bali Nusa Dua
Convention
Center
Annual
Jakarta
http://www.indofis
heries.org/
Jakarta
Convention
Center, Jakarta
Organiser details
PAMERINDO
Indonesia
Email:
Wiwiek@pamerin
do.com
Tel: +62 21 2525
320
PAMERINDO
Indonesia
Email:
Wiwiek@pamerin
do.com
Tel: +62 21 2525
320
PT. NAPINDO
MEDIA
ASHATAMA
Email:
info@indofisheries
.org
Tel: +6221
8650962
Table 9 Calendar of Trade Events and Exhibitions
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Tastes of Europe Indonesia – Market Entry Handbook
ANNEX I: GI PRODUCTS REGISTERED IN INDONESIA
Indonesia has been developing the concept of GIs since 2001, creating the legal framework for them through Law 15/2001 on Marks and
Government Regulation 52/2007, covering the further development of the GI system. Up to now more than 35 well-known Indonesian products
have followed the GI route and been officially registered as GIs in Indonesia by the body responsible: the Directorate General of Intellectual
Property.
Currently, there are only three European products listed as a GI in Indonesia. This number is however expected to increase, according to the study
carried out by the EU-Indonesia Trade Cooperation Facility, because the Indonesian intellectual property laws are improving as well as the
Indonesian enforcement authorities are becoming more aware of the GIs protection and enforcement.
European products protected as GIs currently include:
Product Name
Registration ID
Product Type
Registering Entity
Champagne
ID G 000000002
Wine
Comite Interprofessional Du Vin De Champagne
(CIVC) France
Parmigiano Reggiano
ID G 000000009
Cheese
Consarzio Del Formaggio
Reggiano" (Italy)
Grana Padano
ID G 000000045
Cheese
Consorzio per la Tutela del
Formaggio Grana Padano Kuasa :
Andromeda, BA., SH AMR
Partnership (Italy)
"Parmigiano
Table 10 EU GI Products Registered in Indonesia
197
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Tastes of Europe Indonesia – Market Entry Handbook
ANNEX II: DATABASE OF PROFESSIONAL BUYERS
Buyers:
1. Wholesale, Hypermarket and Supermarket outlets329
Retail Name &
Ownership
Sales
Market Type
/Year
2014
Carrefour/Trans
Trans Retail
Sales of
Mart
Indonesia,
PT. Trans
PT
Retail
(Local per
Indonesia
November 2012)
in 2014:
IDR 15.85
trillion
Giant
Hypermart
Hero
Supemarket
Tbk, PT
(Dairy Farm
–Hongkong)
Matahari
Putra Prima
Sales of
Hero retail
group in 2014:
IDR 13.5 trillion
Sales of
PT.
No. of
Outlets
2014/2015
As of
September
2015:
90 Carrefour
& Transmart
outlets;
1 Groserindo
outlet
Locations
(city/region)
Purchasing
Agent Type
Jakarta and its surrounding
several cities in Banten West
Java, Central Java & East Java,
Palembang,
Medan, Batam, Makassar,
Pontianak, Denpasar, Palu (28
cities)
Direct
Agent/
As of June
2015
53 Giant
Extra outlets,
120 Giant
Express
outlets
Jakarta, several cities
in Banten, West Java,
Central Java, East Java; Bali,
Bandar, Lampung, Bengkulu,
Jambi, Pakanbaru,
Banjarmasin,
Balikpapan, Samarinda,
Batam, Kupang, Medan,
Binjay, Palembang
Direct
Agent/
As of Oct
2015
Jakarta, several cities
in Banten, West Java,
Direct
Agent/
Importer,
Distributor
Importer,
Distributor
U.S. Department of Agriculture, “Indonesia: Retail Foods: Retail Foods Update”, available at:
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Retail%20Foods_Jakarta_Indonesia_12-22-2016.pdf
329
198
Tastes of Europe Indonesia – Market Entry Handbook
Retail Name &
Market Type
Ownership
Tbk, PT
(Local Temasek,
Singapore)
Indogrosir
Indomarco
Prismatama,PT
Sales
/Year
2014
Matahari Putra
Prima Tbk
in 2014: IDR
13.59 trillion
No. of
Outlets
2014/2015
N/A
As of
November
2015:
111 Hypermart
outlets
16 outlets
Lotte Mart
(former Makro
Wholesale)
Lotte
Shopping
Indonesia,
PT
(South Korea per
Oct 2008)
N/A
As of November
2015:
24 wholesaler
Format outlets
13 hypermarket
Locations
(city/region)
Central Java, East
Java, North, Sumatera, Riau,
Jambi, South Sumatera,
Bengkulu,
Bandar Lampung,
Pontianak, Central
Kalimantan, South
Kalimantan, Balikpapan,
Samarinda, North
Sulawesi, Gorontalo,
Palopo, Makassar,
Kendari,
Papua, Kupang,
Bali, Maluku, Bangka
Belitung, Lombok
Jakarta, Tangerang,
Bekasi, Bandung,
Semarang, Yogyakarta,
Surabaya, Palembang,
Pakanbaru, Medan,
Samarinda, Pontianak, Bogor,
Banjarmasin,
Manado
Jakarta, Tangerang,
Serang, Bekasi, Bandung,
Semarang, Yogyakarta, Solo,
Sidoarjo, Medan,
Pakanbaru, Palembang, Bali,
Makassar, Banjarmasin,
Balikpapan, Cirebon,
Purchasing
Agent Type
Importer,
Distributor
Direct
Agent/
Importer,
Distributor
Direct
Agent/
Importer,
Distributor
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Tastes of Europe Indonesia – Market Entry Handbook
Retail Name &
Market Type
Ownership
Save Max Super
Grocer
Emporium
Indonesia,
PT (Gunung
Sewu
Group) (Local)
AMSL
Indonesia,
PT (Japan)
AEON
Alfa Midi
(bigger than
minimarket but
smaller than
supermarket)
Midi Utama
Indonesia
Tbk, PT
Food Mart
group/Food Mart
Gourmet
Matahari
Putra Prima Tbk,
PT
(Local Temasek,
Singapore)
Hero
(Local)
Hero
Supemarket
Tbk, PT
(Dairy Farm
Sales
/Year
2014
No. of
Outlets
2014/2015
format outlets
As Of
November
2015: 2 outlet
Locations
(city/region)
N/A
As of
November
2015: 1 outlet
Tangerang
Agent/
Importer,
Distributor
Net
revenue in
2014: IDR
6.02 trillion
From Alfamidi,
Alfa Express &
Lawson
Putra
Prima Tbk
in 2014:
As of June
2015:
Jakarta, Bogor,
Tangerang, Depo,
Surabaya, Makassar,
Samarinda, Medan,
Malang, Bali
Direct
Agent/
Jakarta, Tangerang,
Bogor, Krawang, Cirebon,
Klaten, Purwokerto,
Yogjakarta,
Surabaya, Jember,
Bali, Balikpapan,
Samarinda, Ambon,
Padang, Medan, Palembang
Jakarta, Bekasi,
Bogor District,
Tangerang,
Tangerang Selatan,
Direct
Agent/
IDR 13.59
trillion
Net revenue
from Hero
retail group in
2014: IDR
833 Alfamidi
outlets
As of Oct
2015:
24 large and
48 middle
outlets
As of June
2015
Hero: 35 outlets
Bogor
Tangerang, Cibubur
Purchasing
Agent Type
Agent/
Importer,
Distributor
Importer,
Distributor
Importer,
Distributor.
Direct
Agent/
Importer,
200
Tastes of Europe Indonesia – Market Entry Handbook
Retail Name &
Market Type
Ownership
Sales
/Year
2014
–Hongkong)
13.56 trillion
Farmers Market
Lion Superindo
Supra Boga
Lestari Tbk,
PT
(Local)
Lion Superindo –
Gelael, PT
Net revenue
2014 from
Framers
Market &
Ranch
Market:
IDR1.64 trillion
As of June
2015:
N/A
As of
August 2015:
(Local Delhaize
Belgium)
SPAR
Ramayana Lestari
Sentosa Tbk
No. of
Outlets
2014/2015
Jason supermarket
2 outlets
N/A
Locations
(city/region)
Purchasing
Agent Type
Bandung, Yogyakarta,
Surabaya, Sidoarjo,
Malang, Bali, Mataram,
Tembaga Pura, Timika,
Makassar, Balikpapan
Jakarta, Bogor,
Tangerang, Bekasi,
Kerawang
Distributor.
14 outlets
Direct
Agent/
Importer,
Distributor
Direct
Agent/
127 outlets
Jakarta, several cities
in Banten, West Java,
Central Java & East
Java; Palembang (19 cities)
As of September
2015:
8 outlets
Bogor, Cibubur, Cibitung,
Jakarta, Cilegon, Serang,
Malang
Agent/Importer,
Distributor
Importer,
Distributor
Table 11 Buyers
2. High-end Supermarkets and Specialty Stores330
330
Ibid
201
Tastes of Europe Indonesia – Market Entry Handbook
Retail Name &
Market Type
Ownership
Sales /Year
2014
Bali Deli –
specialty store
Cipta Adi
Karsa, PT
(Local)
Dijon Food
Specialties
Alamboga
Internusa, PT
(Local)
N/A
The Food Hall
(formerly Sogo)
–specialty store
Panen Lestari
Internusa, PT
(Local)
N/A
Kemchicks –
specialty store
Boga Catur
Rata, PT
(Local)
N/A
Lucky
Supermarket
Group
Local
N/A
No. of
Outlets
2014/2015
As of
November
2015:
1 outlet
As of
November
2015:
1 outlet
As of
November
2015:
13 food hall
Outlets,
13 daily
food hall
outlets
1 “The
Market” outlets
As of
November
2015:
2 outlets
As of
November
2015:
Locations
(city/region)
Purchasing
Agent Type
Bali
Agent/Importer,
Distributor
Bali
Direct,
Agent/Importer,
Distributor
Jakarta, Tangerang
Depok, Bekasi,
Bandung, Bali,
Cikarang
Agent/Importer,
Distributor
Jakarta
Agent/Importer,
Distributor
Jakarta,
Surabaya,
Medan,
Direct,
Agent/Importer,
Distributor
4 Grand Lucky
outlets,
202
Tastes of Europe Indonesia – Market Entry Handbook
Pepito –
Speciality store
Ranch Market –
specialty store
Sentral
Retailindo
Dewata, PT
(Local)
Supra Boga
Lestari Tbk,
PT
(Local)
All Fresh
Local
Net revenue
2014 from
Framers
Market &
Ranch Market:
IDR1.64 trillion
N/A
Jakarta Fruit
Market
Local
N/A
Total Buah
Local
N/A
3 Berastagi
outlets,
7 Rejeki
Fruit boutiques
3 Hokky outlets
As of
November
2015 :
12 outlets
As of
November
2015:
13 outlets
As of November
2015:
10 outlets
As of
November
2015:
5 outlets
As of
November
2015:
21 outlets
Bali
Agent/Importer,
Distributor
Jakarta,
Surabaya,
Balikpapan,
Tangerang
Selatan
Direct,
Jakarta, Bogor,
Bekasi, Tangerang
Agent/Importer,
Distributor.
Jakarta
Agent/Importer,
Distributor.
Agent/Importer,
Distributor.
Jakarta, Bandung, Surabaya, Agent/Importer,
Bali,
Distributor.
Cikarang
Table 12 High End Supermarkets
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Tastes of Europe Indonesia – Market Entry Handbook
3. Convenience Store/Minimarket Outlets331
Retail Name
Ownership
Sales/Year
&
2014
Market Type
Alfa
Sumber
Net revenue
Minimarket
Alfaria
2014: IDR36.74
Trijaya, Tbk,
trillion
PT
(Local)
Circle K
Circleka
N/A
(convenience)
Indonesia
Utama, PT
(Franchise)
Indomaret
Indomarco
Net Sales 2014:
Prismatama,
IDR 41.06
PT
trillion
(Local)
Star Mart
PT Hero
Net revenue
Supermarket
from Hero retail
Tbk, PT)
group in 2014:
(Local)
IDR 11.913.56
trillion
Yomart
Yomart Rukun
Selalu, PT &
Griya
Pratama, PT
Seven Eleven
Modern Sevel
Sales of PT
Indonesia, PT
Modern
International
(Franchise)
Tbk (Parent
331
No. of
Outlets
2014/2015
Net revenue
2014: IDR36.74
trillion
Locations
(city/region)
Purchasing
Agent Type
Jakarta, Bogor,
Bekasi, Tangerang, Java,
Bali, Sumatera,
Kalimantan, Sulawesi (16
provinces)
Jakarta, Batam, Bandung,
Bali,
Yogyakarta, Surabaya,
Makassar
Java , Madura, Bali,
Sumatera, Sulawesi,
Kalimantan
Agent/ Importer,
Distributor.
As of June
2015:
97 outlets
Jakarta
Agent/Importer,
Distributor.
As of November
2014:
211 outlets
West java
Agent/Importer,
Distributor.
As of Dec
2014:
Jakarta,
Tangerang,
Depok
Direct
As of November
2104:
More than 500 outlets
As of August
2015:
11,400 outlets
190 outlets
Agent/ Importer,
Distributor.
Agent/ Importer,
Distributor.
Agent/Importer,
Distributor.
Ibid
204
Tastes of Europe Indonesia – Market Entry Handbook
Company) in
2014: IDR 1.43
trillion
Rajawali Mart
Rajawali
Nusindo, PT
(Local)
As of November
2014:
150 outlets
Bali, Medan,
Makassar, Jakarta
(11 cities)
Agent/Importer,
Distributor.
Table 13 Convenience Stores
Journalists
Name
Position
Contact Details
The Jakarta Post
Endy M. Bayuni
Editor in Chief
editorial@thejakartapost.com
Kornelius Purba
Senior Managing Editor
editorial@thejakartapost.com
Primastuti Handayani
Managing Editor
https://twitter.com/primastutih
Bayu Widhiatmoko
Anton Hermansyah
Callistasia Anggun Wijaya
Head of Multimedia
Reporter
Reporter
Erika Anindita Dewi
Reporter
Liza Yosephine
Reporter
https://twitter.com/liza_yosephin
Marguerite Afra Sapiie
Reporter
https://www.linkedin.com/in/margueriteafra
https://www.linkedin.com/in/bayu-widhiatmoko-89651523
https://www.linkedin.com/in/anton-hermansyah-9240a08a
https://twitter.com/callistasia_w
https://www.linkedin.com/in/eadewi
The Jakarta Globe (Multimedia including TV)
M. Al Azhari
Managing Editor
https://www.linkedin.com/in/muhamad-al-azhari-886835a
Sylviana Hamdani
Editor
https://www.linkedin.com/in/sylviana-hamdani-35462530
205
Tastes of Europe Indonesia – Market Entry Handbook
Edo Karensa
Reporter
https://www.linkedin.com/in/edokarensa
Tabita Diela
Reporter
https://www.linkedin.com/in/tabita-diela-a9356a46
Amal Ganesha
Reporter
https://uk.linkedin.com/in/agwarganegara22
Bisnis Indonesia (In Bahasa Indonesian)
M. Syahran W. Lubis
Editor
Martin Sihombing
News Editor
redaksi@bisnis.com
https://twitter.com/hombing293
Media Indonesia (In Bahasa Indonesian)
Djadjat Sudradjat
Senior Editor
redaksi.micom@mediaindonesia.com
Iis Zatnika
Editor/Journalist
https://www.linkedin.com/in/iis-zatnika-5a757a48
Usman Kansong
Editorial Board
https://www.linkedin.com/in/usman-kansong-44345b24
Table 14 Journalists
Bloggers
Name of the Blog/Blogger
Blog Address
Wanderbites
http://www.wanderbites.com/category/jakarta-restaurant-review/
AnakJajan/ Julia Veronica & Marius Tjenderasa-
https://anakjajan.com/
EatandTreats / Stanislaus Hans Danial
http://eatandtreats.blogspot.com/
MyFunFooDiary/ Mullie Marlina
http://myfunfoodiary.com/
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CulinaryBonanza/ Ellyna Tjohnardi
http://www.culinarybonanza.com/
TheHungryDoctor/ Fillipus Verdi
http://www.thehungrydoctor.net/
TheFoodEscape / Disy Caroline and Yu Kato
http://thefoodescape.com
Foodirectory / Andrey & Windy
http://foodirectory.blogspot.com/p/about.html
Table 15 Bloggers
VIP Cooks
Vindex Tengker
As the head judge of MasterChef Indonesia and Executive Chef at Four Seasons Hotel Jakarta, Vindex Tengker is one of the most well-known
celebrity chefs inIndonesia. Vindex began his career as a specialist chef in Indonesian cuisine at the “Amandari Resort” in Bali, then left the resort
island in the search of new influences in Los Angeles, Boston, Philadelphia and Berlin where he broadened his culinary technique and discovered
new ingredients.
Vindex’s cuisine showcases the rich Indonesian culinary history in a more refined way. Each dish strives to reveal the essence of an ingredient
and unveil the unpretentious character of a spice or herb like lemon grass, turmeric, ginger, tamarind and kaffir lime leaves.
His LinkedIn profile: https://www.linkedin.com/in/vindex-tengker-b92a8714
Chef Felix Budisetiawan (The Dharmawangsa Jakarta)
Chef Felix, who was born and raised in Bali, realized his passion in culinary when he started to help for the family business and carried on as a
culinary school student in Nusa Dua, Bali, where he studied several managerial aspects of the culinary industry. His expertise expands to the
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gastronomic arts of traditional and modern Indonesian as well as French cooking style with the simple yet flavorsome and mouthwatering cuisines,
with specialization in Indonesian cooking style.
In 2006, Chef Felix moved to Jakarta and challenged himself to be a part of international hotel chains. He was appointed as Executive Chef at
Sheraton, followed by other well-known city hotels in Jakarta and Surabaya. Taking challenge to explore Asia’s culinary world, Chef Felix, who
also loves painting and is an interior design enthusiast, return to the metropolitan city of Jakarta and joined The Dharmawangsa Jakarta.
His LinkedIn profile: https://www.linkedin.com/in/felix-budisetiawan-97639b6
Chandra Yudaswara (Exodus)
Chef Chandra stole the public attention after hosting the TV show ‘Chef’s Table’, while being responsibility of several high-profile restaurants in
Jakarta including Bacco, Exodus, and Domicile Jakarta.
Growing up with a chef dad who dedicated his life in the hotelier and culinary business, Chandra spent his childhood running around kitchens,
trying out food, and meeting Indonesian and foreign chefs. It is not just the cooking and the food that inspired him, but also the philosophy and
the grit behind the art of cooking itself; the long hours, the hard work, and the complains that colors all chefs daily routine motivated him and
made him the successful chef he is today.
Starting his career in one of Jakarta’s most sophisticated Indonesian-clad brand in the country, The Dharmawangsa Jakarta where he was promoted
to Demi chef de Partie, he later took a position in a 5 star hotel in Dubai. He returned to Jakarta and assumed the position of Chef de Cuisine of
hotel Grand Hyatt, Jakarta, and later Executive Chef of Negev restaurant.
His LinkedIn profile: https://www.linkedin.com/in/chandra-yudasswara-73112232
Gilles Marx (Amuz)
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Born in a family fond of cooking, Gilles Marx already loved French culinary world since childhood. His home kitchen at Miestesheim, Northern
France, was the witness of his early pace in the culinary world.
His course of a career spanned from the age of 17, when he worked at the restaurant La Poele d’Or, which holds one Michelin Star. He was moving
in an increasingly unstoppable pace by continually working at Michelin-starred restaurants, such as Le Paris Restaurant, Chef Pierre Orsi, Le Cote
St Jacques, and Le Taillevant.
He came to Indonesia in 1998 and became the Executive Chef in a restaurant at a hotel in Jakarta. He grew to be well known in both Indonesia
and International culinary world; evident from the numerous awards he has received. Gilles is one of the best chefs the nation owns, who is also a
media personality.
His LinkedIn profile: https://www.linkedin.com/in/chef-gilles-marx-13240326
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