Home Blog Packaging Trends and Opportunities in the F&B Industry Food & Beverages | Indonesia | Product Registration Packaging Trends and Opportunities in the F&B Industry InCorp Editorial Team 19 June 2024 5 minute reading time Table of Contents Consumer Trends in the F&B Industry How Big is the F&B Packaging Industry in Indonesia? The F&B Industry Boosts Packaging Growth Opportunities and Challenges Unleash Your Potential in Indonesia's F&B Industry The food and beverage (F&B) industry is a constant source of innovation and product development. With a massive market, the industry demands a responsive and dynamic packaging sector. Not only as a brand identity, packaging also helps improve buyers’ quality in making purchase decisions. This article delves into the evolving landscape of F&B packaging, exploring key trends shaping the industry and highlighting potential opportunities for stakeholders. Consumer Trends in the F&B Industry Indonesia ended 2023 with a consumer confidence index of 123.8, indicating strong optimism in spending for the new year. Mineral water and instant noodles have consistently been top consumer choices. The spending of those two categories reached IDR 41.6 trillion and IDR 35.9 trillion in 2023, showing compound annual growth rates (CAGR) of 4.1% and 7.7% from 2019 to 2023. These staple goods and cooking oils are integral to the Indonesian diet, ensuring resilient consumption growth in 2024 and beyond. Furthermore, non-staple goods like packaged spices and coffee have significantly increased spending over the past five years. Packaged spices experienced a remarkable CAGR of 12.0%, reaching IDR 5.8 trillion in consumption value in 2023, while coffee consumption totaled IDR 30 trillion, rivaling instant noodle spending, with a CAGR of 3.0% from 2019 to 2023. This shift towards convenient cooking and increased productivity suggests that packaged spices and coffee consumption will remain strong. Moreover, the milk category, particularly factory-produced liquid milk, has shown consumption resilience, valued at IDR 7.6 trillion in 2023 with a CAGR of 5.5% from 2019 to 2023, as it is perceived as a healthier option. How Big is the F&B Packaging Industry in Indonesia? One of the preferences for packaging is the flexible packaging type. The Indonesia Flexible Packaging Market is projected to be USD 4.37 billion in 2024, with an estimated growth to USD 5.51 billion by 2029, showing a CAGR of 4.75% during the forecast period (2024-2029). This type of packaging offers more economical and customizable options for packaging various products. It is particularly beneficial for industries requiring versatile packaging solutions, such as the food and beverage, personal care, and pharmaceutical sectors. The popularity of flexible packaging has increased significantly due to its high efficiency and cost-effectiveness. READ MORE:2024 Projections For The Indonesian Food And Beverage IndustryThe Halal Industry In Indonesia: Trends And Future ProspectsWhy Does Food Safety Matter For Indonesian Products? The F&B Industry Boosts Packaging Growth The food industry holds a significant market share within the packaging sectors, as proven by the following trends: Resilience During the Pandemic The COVID-19 pandemic led to market volatility in 2021, posing logistical challenges for packaging materials. However, Indonesia’s packaging sector, particularly in flexible packaging for food, has witnessed significant growth in response to emerging trends. This includes the rise of e-commerce, which demands unique shipping packaging, and increased demand for frozen foods with extended expiration dates. Millennials Prefer Flexible Packaging The demand for flexible packaging solutions is primarily driven by millennial consumers in Indonesia, who prefer single-serving and on-the-go food options. These products are designed to be portable, durable, and lightweight, making flexible packaging an ideal choice for packaging such items. Increase in Consumer Spending Consumer spending on various food items has notably increased in Indonesia in recent years, including bakery and cereal bars, ready meals, coffee or hot chocolate sticks and pouches, dehydrated foods, snack foods, nuts, spices, chocolates, sweets, ice-cream novelties, cookies, cakes, and chips. This surge in demand has contributed to the growing popularity of flexible packaging goods, such as stand-up gussets and pillow pouches, especially in the food industry. Low Cost of Flexible Packaging Pillow pouches have experienced significant growth, driven by their increased use in the food, beverage, and dairy sectors. These packaging options are valued for their low cost, practical sealing ability, and cost-efficient transportation, which positively influences their adoption in the market. Opportunities and Challenges There are several challenges and opportunities surrounding the packaging sector in Indonesia. Those are: The Challenges of F&B Industry Packaging in Indonesia Regulatory Aspects Stricter regulations promoting sustainable packaging alternatives due to environmental concerns about plastic waste impact the market for rigid plastic packaging, posing challenges in meeting these requirements. Volatility Price Fluctuations in global raw material prices, such as polyethylene and polypropylene, can affect manufacturers’ profitability and hinder market growth. Slow Progress in Developing Infrastructure Despite efforts to promote plastic recycling in Indonesia, the country needs to improve its recycling infrastructure and awareness, hindering efficient plastic waste management and sustainable market growth. The Prospects of F&B Industry Packaging in Indonesia Growth of Sustainable Packaging Increasing environmental awareness creates an opportunity for eco-friendly rigid plastic packaging development, with the potential for recyclable and biodegradable alternatives. Growth of the F&B Industry Indonesia’s expanding food and beverage industry, driven by changing consumer preferences and a growing middle class, offers significant market opportunities for rigid plastic packaging, particularly in dairy, snacks, and beverages. Technological Innovation Ongoing advancements in plastic packaging technologies enable product innovation and differentiation, including integrating smart packaging features like RFID tags and temperature indicators, enhancing the functionality and appeal of rigid plastic packaging. Guide to Doing Business in Jakarta Mailchimp Free eBook Indonesia Business Insight Full NameEmail I have read InCorp's Privacy Policy and agree to InCorp using my information provided to contact me about related content, and services.*Subscribe Unleash Your Potential in Indonesia’s F&B Industry Indonesia presents lucrative opportunities in the food industry, with recent trends indicating a promising outlook for growth in this sector. As consumer preferences evolve and demand for food and beverage products continues to rise, navigating the certification process becomes essential for businesses looking to establish themselves in this competitive market. InCorp Indonesia offers expertise in streamlining the certification process for food and beverage products, including halal certification, ensuring compliance with regulatory standards, and enhancing market access. With our assistance, businesses can navigate the complexities of certification seamlessly, enabling them to capitalize on the vast potential of Indonesia’s thriving food industry. Read Full Bio Pandu Biasramadhan Senior Consulting Manager at InCorp Indonesia An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.