In Indonesia, condensed milk dominates the “other” dairy market, and it is expected to continue to reign in the category over the forecast period. Demand for this product remains strong despite the Indonesian government’s having banned manufacturers from using the term “milk” to describe their product on their packaging.
In Indonesia demand for cream and coffee whiteners is stronger in the foodservice channel than it is in retail, and demand in the former channel has been increasing as more cafés and bakeries are opening in the country. Retail demand for these products remains stable, but retail value sales continue to be relatively low compared to foodservice value sales because cream is expensive – and is mainly demanded by more affluent consumers that like to buy coffee beans and make their own coffee – and coffee whitener faces strong competition from prepacked coffee mix for which no additional coffee whitener is needed, such as 3-in-1 instant coffee, which is becoming increasingly prevalent in Indonesia, and from fresh drinking milk, for people that are looking for fresher products similar to what they find in cafés such as Starbucks, which serve their hot beverages with fresh milk rather than with coffee whitener.
Unique to Indonesia, demand for condensed milk has always been significantly large. However, although plain condensed milk has traditionally been more popular than flavoured condensed milk, as its neutral flavour makes it more suitable for use in a wider range of dishes, recently the major condensed milk players have been striving to develop unique flavours.
Frisian Flag Indonesia leads in “other” dairy, where it dominates the condensed milk category. It is expected to maintain its leading position over the forecast period, in spite of increased competition from domestic producers Indolakto and, increasingly, Riau Sakti United Plantation, which have been making great strides in creating more brand awareness and generating more sales for their lower-cost condensed milk products, which appeal to price-sensitive consumers.
Fonterra Brands Indonesia is the fifth-ranked player in the cream category in Indonesia, supported by increasingly strong product awareness for its flagship cream brand, Anchor. Fonterra is a multinational dairy cooperative owned by approximately 10,500 dairy farmers in New Zealand, and it made steady headway in Indonesia’s foodservice sector between 2014 and 2019.
Most players operating in condensed milk have put more effort into designing new packaging types and sizes to meet demand for different occasion uses. For example, they are producing products in smaller packaging such as sachets for one-time consumption in an effort to generate sales in traditional retail channels at a lower selling price.
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This industry report originates from Passport, our Packaged Food market research database.