Indonesia is the world’s fourth most populous country with a population of 232.5 million in 2010, and the largest economy in Southeast Asia.
In 2011, New Zealand’s food and beverage exports totalled US$468.3 million, making Indonesia New Zealand’s 11th largest export destination.
In November 2011, Indonesia provided formal notification of the completion of its internal ratification procedures to enable the ASEAN – Australia – New Zealand Free Trade Agreement (AANZFTA). From 10 January 2012, AANZFTA will open up considerable opportunities for New Zealand businesses. The agreement will allow duty / tariff free access to over 90 percent of New Zealand goods and services by 2015.
Getting your product into market
Indonesia is a price sensitive market, but with the growth of the new generation of middle and high income consumers, the quality of products is of greater importance. Branded and high quality food and beverage products are in demand.
The middle high income segment is paying more attention to healthy products as the new generation becomes more health conscious. Indonesian consumers prefer internationally well-known brands and imported products, particularly for their children.
In 2010, the government approved a number of import licences for alcoholic beverages. There were previously only 2 companies with import licences but now more than 20 companies have secured a licence. To acquire an import licence, a company needs to have at least 20 brands in its portfolio.
It is recommended that New Zealand food and beverage products focus on Jakarta (with a population of 9.6 million), Surabaya (4 million) and Bali (4 million). Jakarta and Surabaya are big markets in their own right but are also distribution hubs to the east and western parts of Indonesia. Bali is a popular tourism destination and there is a demand for quality products from hotels and restaurants.
Regulations
Prior to importation of food, companies must follow a registration process which involves a fee of Rp 150,000-3,000,000 (approximately NZ$17-345).
The documents needed to register include:
- A letter that guarantees safety, quality, nutrition and labelling
- An authorisation letter from the manufacturer
- Health certificate or certificate of free sale issued by authorised deputy from country of origin
- An audit report of distribution facilities from NADFC (National Agency of Drugs and Food Control) provincial office.
- Copy of registration approval letter from the NZ company’s importer
Opportunities
Indonesia has a massive youth population of around 40.9 million, aged between 15 and 24.
This age group tends to be more westernised compared to the older population and is projected to drive demand for mass market products such as confectionary goods.
Most consumers in Indonesia remain price sensitive and private label will be a popular alternative as it is perceived as good value rather than cheap.
There are opportunities for products targeted to improve the condition of specific health problems.
These products include calcium fortified milk to prevent osteoporosis, dairy milk for nursing mothers, baby food and products for weight and cholesterol reduction.
