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Published by: Business Monitor International
Published: Jul. 21, 2008 - 64 Pages
Table of Contents
- Executive Summary
- Business Environment
- Regional Food & Drink Business Environment Ratings
- Table: Asia Pacific Food & Drink Ratings Q308
- Indonesia’s Food & Drink Business Environment Rating
- Table: Indonesia’s Global Food & Drink Business Environment Ratings Peer Group
- SWOT Analysis
- Food And Drink
- Indonesia Food And Drink Industry SWOT
- Mass Grocery Retail
- Indonesia Mass Grocery Retail Industry SWOT
- Macroeconomic Outlook
- Table: Indonesia Economic Activity
- Food
- Industry Forecast Scenario
- Food Consumption
- Table: Food Consumption Indicators - Historical Data & Forecasts
- Canned Food
- Confectionery
- Table: Value/Volume Sales, Selected Food Sub-Sectors - Historical Data & Forecasts
- Trade
- Table: Indonesia Food & Drink Trade Indicators - Historical Data & Forecasts
- Industry Developments
- Market Overview
- Food Production
- Confectionery
- Halal
- Agriculture
- Organics
- Fisheries
- Drink
- Industry Forecast Scenario
- Hot Drinks
- Alcoholic Drinks
- Soft Drinks
- Table: Indonesia Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts
- Industry Developments
- Market Overview
- Soft Drinks
- Alcoholic Drinks
- Agriculture At A Glance
- Table: Indonesia Agricultural Sub-Sector Production (‘000 Tonnes, Unless Stated) - Historical Data
- Table: Indonesia Dairy Industry Production, Consumption & Trade Data (‘000 Tonnes)
- Table: Indonesia Organic Agricultural Data
- Agricultural Commodity Price
- Retail
- Industry Forecast Scenario
- Table: Indonesia Mass Grocery Retail Sales By Format (US$bn)
- Table: Grocery Retail Sales By Format (%) - Historical Data & Forecasts
- Industry Developments
- Market Overview
- Table: Structure Of Indonesia's Mass Grocery Retail Sector - Estimated Number Of Outlets
- Table: Structure Of Indonesia's Mass Grocery Retail Sector - Sales By Format (US$mn)
- Table: Average Annual Sales By Format, 2007
- Competitive Landscape
- Key Players
- Food And Drink
- Table: Key Players In Indonesia's Food & Drink Sector - 2007
- Mass Grocery Retail
- Table: Key Players In Indonesia's Mass Grocery Retail Sector, 2007
- Company Analysis
- Food
- Indofood Sukses Makmur Terbuka
- Drink
- Coca-Cola Amatil (CCA)
- Aqua Golden Mississippi (Aqua)
- Mass Grocery Retail
- Matahari Putra Prima
- Carrefour
- Deep US Recession Scenario
- Global Scenario
- Table: World GDP Growth
- Table: US GDP Growth, Investment Growth And Private Consumption Growth
- Table: Eurozone GDP Growth
- Table: Asia, Excluding Japan, GDP Growth
- Table: China GDP Growth
- Table: Mexico GDP Growth
- Table: Africa GDP Growth
- Asia Pacific Food & Drink Scenario
- Table: Impact of Deep US Recession On Total Food Consumption (US$bn) In Selected Asia Pacific Markets - Cumulative US$ Impact Over 5-
- yr Forecast Period
- Appendix
- Food & Drink Business Environment Ratings
- Ratings Methodology
- Ratings Overview
- Ratings System
- Indicators
- Limits Of Potential Returns
- Risks To Realisation Of Potential Returns
- Weighting
- Weighting
- BMI Food & Drink Industry Glossary
- Food & Drink
- Mass Grocery Retail
- BMI Food & Drink Forecasting & Sourcing
- How We Generate Our Industry Forecasts
- Sourcing
AbstractSpiralling food prices - a strong theme throughout this report last quarter - were expected to makethemselves known in the first quarter financial results releases of the country’s leading food and beverageproducers; this did not happen. Instead, the food, beverage and retail industry’s leading players haveposted strong net profit and revenue growth for Q108. Nonetheless, as examined in BMI’s newlypublished Indonesia Food & Drink Report for Q308, consumer confidence in the country remains shaky,and the prospects for strong full-year growth are still in the balance.
Unilever Indonesia - a subsidiary of the Dutch consumer goods giant - revealed Q108 net profit growthof 31% to US$76mn, while sales rose by 20% to US$407.9mn. For the same period, the country’s leadingfood manufacturer Indofood Sukses Makmur saw net profit increase by a phenomenal 116% toUS$41.2mn, while sales increased by 52% to US$952.4mn. Meanwhile, retailer Matahari Putra Primaannounced that its net profit for the first three months of the year had risen by 19% to US$1.94mn, whilesales had climbed by 22% to US$263.7mn.
These strong financial releases seem to show that consumer demand in Indonesia is strong enough tosupport the price increases that manufacturers have resorted to in a bid to protect their profitability duringthis period of high input prices. BMI’s consumption forecasts for the market also support that view.Indonesia’s ongoing economic recovery and the growing affluence of its emerging middle class is drivinga total food consumption growth forecast of 50% to IDR714.7trn in 2012; in per capita dollar terms, BMIexpects food consumption to increase by 61% to US$359.70 in 2012.
However, while economic growth and consumer demand have proved sufficient to allow price increasesto be introduced relatively smoothly, with no major knock-on effect on volume sales or market share,consumer confidence in Indonesia is too volatile for this to remain the case for long. March saw protestsin Jakarta as consumers took to the streets to complain about spiralling food prices. Admittedly, theseprotests mainly involved the country’s lowest income groups who were complaining about the price ofbasic commodities, as opposed to the rising cost of convenient instant noodles, but nonetheless theyreflect growing resentment at inflation.
With BMI forecasting full-year average inflation of 8.7% in Indonesia in 2008, consumer confidence islikely to be shaken further over the remainder of the year. Acknowledging the impact that sustained highprices will have on consumer expenditure levels in the country, Matahari and soft drinks market leaderCoca-Cola Amatil tempered their 2008 expansion plans and growth expectations, respectively, with theproviso that they would watch the economic situation closely and downgrade plans and targets in linewith changing consumer demand.
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