2024 Projections for the Indonesian Food and Beverage Industry

Indonesia’s food and beverage industry is a robust and promising sector poised for substantial growth. As we approach 2024, investing in this thriving industry presents a strategic opportunity for local entrepreneurs and international investors. 

With a burgeoning consumer market and evolving culinary preferences, Indonesia’s food and beverage industry offers a fertile ground for innovation and prosperity.

How Big is the F&B Industry in Indonesia?

The food and beverage (F&B) sector is crucial for Indonesia’s economy. It contributes to growth, job opportunities, and culinary development. Furthermore, population growth and rising incomes drive this sector’s success.

The industry players are motivated to create high-quality products that appeal to the consumer’s preferences. Of course, the motivation is also supported by the people and improved purchasing power and the demand for F&B products keeps growing.

In 2022, the F&B industry saw a 4.90% annual growth per Statistics Indonesia (BPS) data. The sector was able to reach IDR 813.062 billion in annual growth. This growth is closely linked to increased F&B production.

Looking ahead to 2023, CRIF predicts a 5% growth in the F&B industry. This is influenced by the industry’s sensitivity to economic changes. Its promising prospects, especially in the post-COVID-19 national economic recovery context, further contribute to this influence.

Mapping The Benefits of Indonesia’s Consumer Buying Habits 

Recent trends show that consumers need to become more brand loyal. They are more open to trying different food products or brands that match their values, even on a tight budget. 

These shifts in the F&B industry create opportunities for new companies that can adapt to evolving consumer preferences, indicating substantial growth potential. Furthermore, a rising demand for products with cleaner labels and healthier ingredients exists. 

It challenges the idea that consumers usually stick with familiar brands. This opens the door for new products that align with changing values.

The growing desire for ingredient transparency has also boosted the popularity of meal kits, allowing consumers to see what goes into their meals. 

The F&B companies are capitalizing on this trend by breaking their existing products into individual ingredients that consumers can use to create their meals.

The Outlook for Indonesia’s F&B Industry in 2024

Indonesia’s F&B industry remains strong, driven by its large population of 275.7 million, a growing middle class, and increasing per capita spending. In 2019, the average monthly per capita spending on food and beverages was IDR 572,551.

Despite the challenges of COVID-19, this figure rose to IDR 603,236 in the following year. In 2021, per capita spending increased to IDR 622,845, reaching IDR 665,757 by the end of 2022, even amid high inflation caused by geopolitical events.

The F&B industry has maintained positive growth, though not as rapid as before. Data from Statistics Indonesia (BPS) reveals a consistent contribution to GDP without any significant decline, underlining Indonesia’s sustained food and beverage industry growth.

This upward trend is expected to persist in 2023 and 2024. The Director General of Agro-Industry at the Ministry of Industry, Putu Juli Ardika, projects a 5-7 percent growth in the F&B industry by the end of 2023. 

Industry players remain optimistic about its prospects due to factors such as the upcoming presidential election, simplified permits for international events, and Indonesia’s commitment to embracing Industry 4.0 practices.

2024 Foreign Investment Opportunities

2024 opens a myriad of opportunities for food and beverage investment in Indonesia, supported by the following factors:

1. Government Support for F&B

The Indonesian Ministry of Industry promotes Industry 4.0 in the F&B sector. As of July 2023, they’ve trained 300 individuals and 200 businesses. 

The goal is to empower 80 F&B owners with competency certificates by year-end, aligning with the Making Indonesia 4.0 Road Map. By 2024, 400 F&B players should be ready for the INDI 4.0 Readiness Index.

2. Digital Permit for Events

On September 11, the government introduced a new event licensing system in Indonesia at the Ministry of Tourism and Creative Economy Building in Jakarta. 

The transition team started granting select event organizers access to the online application system for licenses. Subsequently, this digitalization aims to address challenges faced by organizers, attract foreign stakeholders, and foster economic growth. 

Additionally, it is expected to boost the F&B industry notably by facilitating over 3,000 events in 2023.

3. 2024 Political Year

Scheduled for February 14, 2024, the 2024 Indonesian general election will include the election of the president, vice president, and members of parliament.

The 2024 election will see various political entities and parties engaging in simultaneous nationwide campaigning. Over approximately 100 days, the authorities will distribute substantial financial resources to thousands of locations nationwide.

This election presents a clear opportunity for the F&B industry to benefit.

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Indonesia’s dynamic landscape of food and beverage opportunities offers a fertile ground for innovative ventures and promising returns for those seeking to tap into this thriving market.

To maximize these potentials, InCorp Indonesia provides company registration and Investor KITAS services for those investors who aim to explore the food and beverage industry.

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