Indonesia Food and Drink Report Q2 2008 Examine the Impact Spiralling Food Prices Are Having on Consumer Spending in the Country

Wednesday May 7 7:54 PM

The Indonesia Food Drink Report provides independent forecasts and competitive intelligence on Indonesia's food and drink industry.

Executive 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 this 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 price sensitive, market remains a risky proposition for investors for the time being.

Contents:

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 32
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
And more...

For more information visit http://www.researchandmarkets.com/reports/c91034.

Contact:

Research and Markets
Laura Wood, Senior Manager
press@researchandmarkets.com
Fax: +353 1 4100 980

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