Indonesia Food Spending Trends: Growing Westernisation Of Diets
Tuesday, 18th of September 2018 A growing trend towards more Westernised foods has emerged in Indonesia, as a result of a growing middle class located in urban areas with greater access to more food options. This is gradually pushing Indonesians towards products that traditionally are not staple parts of their diets. Middle income consumers are dining out more frequently than previously and this benefits categories such as meat, poultry, dairy and fresh fruit and vegetables. Food spending is the largest area of expenditure for Indonesian households, accounting for over 35.5% of household expenditure in 2018. We forecast headline food sales (in local currency terms) to rise from INR2,975trn in 2018 to INR4,397trn in 2022, with growth averaging about 10% per year. In US dollar terms, this translates into headline food spending of USD208bn in 2018 and we expect this to expand to USD287bn by the end of our forecast period in 2022. This actually makes Indonesia one of the largest markets in the world for food expenditure, behind only China, India and the US. Among the categories that will see the largest shifts in food spending, we highlight dairy, oils and fats, and fresh and preserved fruit as the three categories forecast to account for a greater portion of total food spending in 2022 compared with 2012. Dairy will represent 10.4% of total food spending in 2022, up from 9.6% in 2012, an increase of 0.8 percentage points. This is the largest increase of any category and demonstrates how, even over a 10-year period, this change is a slow and incremental process. One thing that is important to note with the diets of Indonesians is that the country is majority Muslim, representing about 87% of the population according to a 2010 census. This means that pork is going to experience extremely low demand, while other meat, poultry and dairy products need to be halal certified. Seafood does not need to be slaughtered and blessed in the same way, which is perhaps part of the reason why it forms such a substantial part of Indonesian diets. Indonesia is the largest Muslim market in the world as a result, so it represents a strong opportunity into which halal companies can expand to meet growing demand for poultry and dairy. Source: Fitch Solutions; https://www.fitchsolutions.com/corporates/retail-consumer/indonesia-food-spending-trends-growing-westernisation-diets-18-09-2018 (11/10/18)
