Fortified/Functional Packaged Food in Indonesia

PROSPECTS

Consumer acceptance of FF packaged food remains high in Indonesia

Packaged food manufacturers in Indonesia frequently seek to add value to their products by fortifying them with essential nutrients or adding functional ingredients, as these methods are simple, cost-efficient and effective. Together with the wider trend of rising health-consciousness, this ensured that FF packaged food continued to post robust growth in current value sales in 2018, despite already being by far the largest of the main health and wellness packaged food categories in the country.

FF flavoured milk drinks continues to perform strongly

FF flavoured milk drinks continued to post strong growth in current value sales in 2018, and was the single most dynamic FF packaged food category in this regard over the review period as a whole. One key factor that has supported the positive development of this category in recent years is that parents are typically willing to spend more on products that could have health benefits for children, who are the main target group for FF flavoured milk drinks.

Outlook for FF baby food remains favourable

FF baby food remained the largest of the main FF packaged food categories in Indonesia in value terms in 2018. Similar to the case with FF flavoured milk drinks, the popularity of this category reflected that fact that parents are usually willing to spend more money on products that could be beneficial to the health and development of their children.

COMPETITIVE LANDSCAPE

Multinationals continue to lead FF packaged food in Indonesia

Multinational players such as Sarihusada Generasi Mahardhika (part of Groupe Danone), Nestlé Indonesia PT and Frisian Flag Indonesia PT continued to account for a high share of FF packaged food current value sales in Indonesia in 2018. This was mainly due to their strong presence in FF dairy and FF baby food, by far the largest of the main categories in value terms.

Social media gains importance as a marketing tool for FF manufacturers

Improvements in internet access, rising smartphone ownership and the growing popularity of platforms like Instagram and Twitter have all contributed to the increased use of social media as a marketing tool by FF packaged food manufacturers in Indonesia in recent years. The trend remained strong in 2018, with more companies turning to social media to generate brand awareness and educate consumers on the specific benefits of their FF products.

Distribution of FF products via internet retailing expected to improve

In tandem with the growing use of social media as a marketing tool, it is expected that many FF packaged food players will work to improve distribution of their products via the internet retailing channel over the forecast period. Online shopping is becoming increasingly popular in Indonesia due to the trend towards busier lifestyles and growth in the number of families where both parents work outside the home.

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