Indonesia Beer Market Outlook to 2028

Indonesia Beer Market Overview

The Indonesia beer market was valued at USD 0.76 billion in 2023. The market's growth has been driven by increasing consumer preference for alcoholic beverages, particularly among the younger demographic. The urbanization trend has also contributed significantly to the growth, with cities like Jakarta and Bali accounting for a large portion of beer consumption. The expansion of premium and craft beer segments is another factor driving the market. Data from the Indonesian Ministry of Industry (2023) indicates that the beer industry has seen consistent growth, despite regulatory restrictions on alcohol sales.

Key players in the Indonesia beer market include Heineken N.V., PT Multi Bintang Indonesia (producers of the iconic Bintang beer), Anheuser-Busch In Bev, Carlsberg Group, and Diageo. PT Multi Bintang Indonesia dominates the market, accounting for a significant share of beer sales due to its wide range of product offerings and strong brand loyalty. Heineken N.V. has also gained traction in the market with its premium beer segment. These companies have been instrumental in shaping the beer landscape in Indonesia.

In 2023, PT Multi Bintang Indonesia announced a new investment of USD 50 million to expand its brewing capacity and introduce environmentally sustainable packaging. The company is focusing on reducing its carbon footprint by incorporating recycled materials in its production processes. Additionally, the Indonesian governments continued effort to regulate the sale of alcohol has led to stricter laws in certain regions, which impacted the sales of low-cost beer products. This development is expected to shift consumer preference towards premium beer brands.

Jakarta, Bali, and Surabaya dominate the Indonesian beer market due to their urban population and vibrant nightlife culture. Bali, a prime tourist destination, sees the highest beer consumption per capita. Its status as a hub for international tourism makes it a key driver for beer sales, with events like beach parties, music festivals, and nightclubs contributing significantly. Jakarta's large working population and upscale restaurants also favor premium and imported beers, making it a key market city as well.

Indonesia Beer Market Segmentation

By Product Type: The Indonesia beer market is segmented by product type into lager, stout, and craft beer. In 2023, lager held a dominant market share in Indonesia under this segmentation, mainly due to its long-standing presence and affordability. Brands like Bintang and Heineken have maintained their dominance by catering to a wide consumer base, ranging from casual drinkers to more upscale patrons. Lager is also favored for its light taste, which aligns with the local climate and food pairing preferences, particularly in urban areas.

By Distribution Channel: The market is also segmented by distribution channels into on-trade and off-trade. In 2023, off-trade channels, which include supermarkets, convenience stores, and liquor shops, held a dominant market share in Indonesia. This is mainly due to regulatory restrictions on the sale of alcohol in on-trade locations like bars and restaurants.

By Region: The Indonesia beer market is divided into North, South, East, and West regions. The West region accounted for the largest market share in 2023, driven by its higher population density and disposable income levels. Jakarta stands out due to its status as the country's economic hub.

Indonesia Beer Market Competitive Landscape

Company

Establishment Year

Headquarters

Heineken N.V.

1864

Amsterdam, Netherlands

PT Multi Bintang Indonesia

1929

Tangerang, Indonesia

Anheuser-Busch In Bev

2008

Leuven, Belgium

Carlsberg Group

1847

Copenhagen, Denmark

Diageo

1997

London, UK

Heineken N.V. (2024): Heineken has implemented a multi-phase decarbonization program across its breweries and malt houses, focusing on reducing carbon emissions and transitioning to renewable energy sources. This initiative includes adopting energy-efficient technologies, using renewable electricity, and incorporating biomass energy solutions. Heinekens efforts are part of their global commitment to reach net-zero emissions by 2030, with Indonesia being one of the key markets where these sustainability measures are being introduced to reduce the environmental impact of beer production.

PT Multi Bintang Indonesia (2023): In March 2022, Multi Bintang Indonesia, the producer of the iconic BINTANG beer brands, won three awards at two prestigious public relations competitions for its #Waktunya Crystal Chill and Bersama Bali campaigns. Both campaigns were based on Multi Bintang Indonesia's Berbeda Bersama philosophy, which aims to promote appreciation and unification of generational differences in Indonesian society.

Growth Drivers

Increase in Tourism to Key Regions: The significant increase in foreign tourist arrivals in Indonesia, which surged by 98.30% in 2023, is directly boosting the beer market. With 11.68 million tourists visiting, particularly in high-demand regions like Bali and Jakarta, the influx of international visitors contributes to higher beer consumption in hospitality sectors such as bars, restaurants, and hotels. This growth in tourism, especially from countries like Malaysia, Singapore, and Australia, creates sustained demand for beer products across Indonesias most visited areas.

Rise in On-Trade Channels Post-COVID Recovery: The reopening of on-trade channels, such as restaurants, bars, and nightclubs, has greatly fueled the demand for beer in Indonesia. Data from the Ministry of Trade in 2023 shows that over 60% of beer sales occurred through on-trade channels, especially in urban centers like Jakarta and Surabaya. The growing trend of social gatherings, events, and concerts is contributing to the increased consumption of premium and craft beers. The governments support for small businesses post-pandemic has led to the rapid recovery of this channel, benefiting the beer industry.

Shift in Consumer Preferences Toward Premium and Craft Beers: In 2023, there has been a noticeable shift in Indonesian consumers' preferences towards premium and craft beer products. Consumers are becoming more selective, seeking higher-quality beer offerings. This trend is particularly evident in urban areas like Jakarta and Bali, where premium beer consumption increased between 2022 and 2023, according to the Indonesian Brewers Association. The growth in disposable income among the middle class and an expanding millennial population are driving this shift, resulting in higher market penetration for premium beer brands.

Indonesias Tourism Recovery Program boosting market growth: The Indonesian government's Tourism Recovery Program aims to boost beer consumption by easing alcohol sales regulations in key tourist hubs like Bali and Jakarta. This initiative, part of a broader effort to attract 8 million international tourists in 2024, promotes cultural events and nightlife, leading to an estimated 10% increase in beer consumption at on-trade venues. This regulatory relaxation will drive market growth in 2024.

Challenges

Strict Alcohol Regulations: Indonesia imposes stringent regulations on the sale and distribution of alcoholic beverages, including beer. In 2023, the government reinforced its policies by restricting the sale of alcohol in certain provinces, including Aceh and West Sumatra. These policies directly impact off-trade channels such as supermarkets and convenience stores, limiting the growth potential of the beer market in certain areas of the country.

High Excise Taxes on Alcoholic Beverages: Excise duties on beer in Indonesia remain high compared to neighboring countries. This tax burden has led to a price hike, which deterred budget-conscious consumers from purchasing beer, particularly in lower-income regions. The Ministry of Finance expects that further tax hikes in 2024 could lead to slower growth in beer consumption, particularly in rural areas.

Indonesia Beer Future Market Outlook

The Indonesia beer market is expected to experience steady growth in the coming years, driven by increasing consumer demand for premium and craft beer products and sustainability initiatives within the industry.

Future Trends

Expansion of Premium Beer Segment: Soon, the premium beer segment is expected to grow significantly as consumers in urban centers such as Jakarta and Bali continue to seek higher-quality beer options. Companies are likely to invest heavily in the premium segment, with anticipated collaborations between international brands and local breweries to introduce innovative flavors and products. Government-backed incentives for sustainable production are also expected to attract foreign investment, further bolstering this segments growth.

Growth in Sustainable Brewing Practices: Sustainability will become a key trend in Indonesia's beer industry over the next five years. Breweries are expected to adopt greener production methods, with a focus on reducing water and energy consumption, in line with the government's environmental goals for the upcoming future. In the near future, local breweries are expected to achieve significant reductions in their carbon footprints, driven by government incentives and the increasing demand from eco-conscious consumers.
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