Baby Food in Indonesia

PROSPECTS

Other baby food registers strong growth within baby food

In 2018, other baby food saw rapid growth as a result of higher product awareness and wider product availability in the market. Compared with prepared baby food, other baby food is generally more economic, and well-accepted by a wider range of consumers as a result.

Modern grocery retailers gains ground at the expense of traditional grocery retailers

In Indonesia, traditional grocery retailers is losing distribution share to modern grocery retailers as a result of retail modernisation. In particular, convenience stores is registering the fastest growth amongst other modern grocery retailers, mainly due to the expansion of such outlets in rural areas, where traditional grocery retailers are dominant.

A potential threat from the health and wellness trend

Over the forecast period, although other baby food is expected to maintain strong growth within baby food, the competition from home-made baby food will threaten its growth and development. The emphasis on fresh, home-made baby food will mainly be driven by increasing awareness of health and wellness amongst Indonesians, who are mainly concerned about balancing their nutritional intake and reducing or avoiding the intake of artificial or preserved products.

COMPETITIVE LANDSCAPE

Growing-up milk formula is the focus amongst players in 2018

Milk formula players made significant investments in the promotion of growing-up milk formula in Indonesia in 2018. Although marketing activities for standard and follow-on milk formula are still prohibited by regulations, the positive branding achieved by marketing activities for growing-up milk formula can be transferred to other categories covered by brands as a result of brand association.

Groupe Danone continues to lead baby food at GBO level in Indonesia

Groupe Danone maintained its strong position in baby food in value terms in 2018. Its success is mainly driven by its performance in milk formula – its comprehensive product portfolio has allowed it to maintain stability in the Indonesian market, with products ranging from economy to premium; SGM targets the economy segment and Nutrilon targets the premium segment.

Forecast period trends

Over the forecast period, the growth of milk formula is expected to be hindered by increasing efforts by multiple associations to advocate the benefits of breastfeeding. Furthermore, the slowdown in the birth rate in Indonesia will also affect the growth of the category.

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