Rtds/High-Strength Premixes in Indonesia

PROSPECTS

RTDs/high-strength premixes posts a decline

2017 saw slow retail spending, mainly due to weak consumer confidence and changing consumer values. The effect was especially strong for RTDs/high-strength premixes, which rely more heavily on off-trade than on-trade channels.

Spirit-based RTDs dominates

In 2017, spirit-based RTDs continued to dominate RTDs/high-strength premixes, thanks to higher product awareness from consumers compared with wine-based RTDs. A wide range of such products used to be widely available in channels such as convenience stores and traditional small retail channels before the 2015 ban.

Forecast period trends

In the forecast period, it is expected that players in RTDs/high-strength premixes will switch their focus to on-trade channels, which are less strictly regulated than off-trade channels. For example, new product launches in 2016 within this category, such as Smirnoff Cola, were discontinued due to a lack of demand and the move towards on-trade channels.

COMPETITIVE LANDSCAPE

Brands are discontinued as Diageo focuses on the on-trade channel

In 2016, Smirnoff Midnight 100 and Smirnoff Cola were launched, and mainly distributed in off-trade channels such as hypermarkets and supermarkets in Indonesia. In November 2017, Diageo decided to discontinue these products, due to the slowdown in the off-trade channel, and its strategy of focusing more on the on-trade channel.

Perindustrian Bapak Djenggot continues to lead with its flagship brand Mix Max

Perindustrian Bapak Djenggot continued to lead RTDs/high-strength premixes in total volume terms with its signature brand Mix Max in 2017. Mix Max is a well-established domestic spirit-based RTD, especially for consumers in the middle- to lower-income segments, thanks to its affordable price compared with other products within the same category, such as Smirnoff Ice.

Forecast period trends

In the forecast period, it is expected that fewer Diageo products in RTDs/high-strength premixes will be present in off-trade channels, due to the switch in the company’s focus towards the on-trade channel. In the on-trade setting, increasing marketing activities such as using social media, in-store promotion and sponsorship are likely to be seen in order to maintain its share in such a competitive environment.

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