Indonesia Food and Drink Report Q2 2008

Publication Date	April 2008
Publisher	Business Monitor
Product Type	Report
Pages	68
ISBN Number	not applicable
Product Code	BMI01613

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Summary

Global food price inflation continues to make itself felt in both developed and emerging markets, with Indonesia's agricultural and fledgling food processing industries no exception. In BMI's newly published Q208 Indonesia Food & Drink Report, we examine the impact spiralling food prices are having on consumer spending in the country and their knock-on effect on food and beverage industry investment.

Back at the start of the year, leading local food processor Indofood Sukses Makmur revealed that it expected rising commodity costs to have a considerable knock-on effect on profitability throughout 2008.

In Q208, this view was supported by Indonesia's vast tempeh production industry, with producers of these soybean cakes - a staple in Indonesian diets - claiming that rising soybean import costs were threatening to put them out of business.

The scrapping of soybean import tariffs and a short-term government subsidy scheme helped to remove the threat to tempeh producer livelihoods, while Indofood's announcement of interim financials revealed steady profit growth which suggested that it too was riding out the current storm. Confirmation from Unilever Indonesia - the local subsidiary of the Dutch consumer goods giant - that it would match its US$60mn 2007 investment in the country in 2008 after price increases of 4% had only a minor impact on customer loyalty further alleviated the short-term outlook for producers.

However, while the local food and beverage industry might be finding the capital to weather the current storm, with the government assisting the agricultural sector to do the same, unabated consumer demand will continue to stimulate local food price inflation. The current situation highlights the conflicting nature of the Indonesian food and beverage market. On the one hand, a developed mass grocery retail sector simplifies distribution for producers, while an immense population ensures an enormous audience for food and beverage products.

On the other, however, food spending in Indonesia is low - with average per capita levels dragged down by the country's poorer rural groups. Food and beverage import dependency - a situation expected to alleviate as government agricultural initiatives finally come to the fore - causes further vulnerability to food price inflation, vulnerability that will ensure that this long-term promising, but hugely pricesensitive, market remains a risky proposition for investors for the time being.

Content

Executive Summary
Business Environment
Regional Food & Drink Business Environment Ratings
- Table: Asia Pacific Food & Drink Ratings - Q208
Indonesia's Food & Drink Business Environment Rating
- Table: Indonesia's Global Food & Drink Business Environment Ratings Peer Group
SWOT Analysis
Mass Grocery Retail
Indonesia Mass Grocery Retail Industry SWOT
Food and Drink
Indonesia Food And Drink Industry SWOT
Macroeconomic Outlook
- Table: Indonesia - Economic Activity
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
Food And Drink
Regional Overview: Confectionery in the Asia Pacific region
- Table: Leading Global Chocolate Manufacturers
- Table: Leading Confectionery Companies In The Asia Pacific Region
Industry Forecast Scenario
Food
- Table: Food Consumption Indicators - Historical Data & Forecasts
- Table: Value/Volume Sales, selected food sub-sectors - Historical Data & Forecasts
- Table: Sectoral Trade Indicators - Historical Data & F
Drink
- Table: Indonesia Beverage Sub-Sectors - Value Sales - Historical Data & Forecasts
Industry Developments
Agriculture
Food
Drink
Market Overview
Food
Agriculture
- Table: Indonesia Organic Agricultural Data
- Table: Indonesia Agricultural Sub-Sector Production ('000 tonnes, unless stated) - Historical Data
- Table: Indonesia Dairy Industry Production, Consumption & Trade Data ('000 tonnes)
Drink
Tobacco
Industry Forecast Scenario
- Table: Cigarette Value/Volume Sales - Historical Data & Forecasts
Industry Developments
Market Overview
Competitive Landscape
Key Players
Mass Grocery Retail
Key Players in Indonesia's Mass Grocery Retail Sector, 2006
Food And Drink
- Table: Key Players in Indonesia's Food & Drink Sector - 2006
Regional Company Case Studies
Food: Unilever In The Asia Pacific Region
- Table: Per Capita Food Consumption in Selected Asia Pacific Markets (US$)
Drink: San Miguel Corporation In The Asia Pacific Region
- Table: San Miguel Corporation In The Asia Pacific Region
- Table: San Miguel Corporation Revenue And Earnings Growth By Operating Division, Q107 (%)
- Table: San Miguel Corporation - Sales By Market (US$mn)
- Table: San Miguel Corporation - Key Historical Data
Company Analysis
Mass Grocery Retail
Matahari Putra Prima
Carrefour
Food
Indofood Sukses Makmur Terbuka
Drink
Coca-Cola Amatil (CCA)
Aqua Golden Mississippi (Aqua)
Food & Drink Ratings Appendix
Introduction: Revised Methodology
Ratings Overview
Ratings System
Indicators
Limits Of Potential Returns
Risks To Realisation Of Potential Returns
Weighting
Weighting
BMI Forecast Modelling
How We Generate Our Industry Forecasts
Retail Industry
Sources