SUBSCRIBE

Breaking News on Food, Beverage & Supplement Development - Asia PacificEU edition | US edition

Headlines > Markets

Indonesia

Growing middle-class will lead poultry demand to double by 2018

Post a commentBy RJ Whitehead , 06-Aug-2014

Growing middle-class will lead poultry demand to double by 2018

Indonesia’s poultry sector is fast transforming from a backyard industry to professionally managed and integrated production, according to figures released by Rabobank.

The bank’s analysts have forecast the growth in demand for processed poultry will reach between 20% and 25% over the next few years, to the point that consumption will double to 2.5m tonnes by 2018.

Poultry remains the top choice of protein among Indonesians, and accounts for 57% of total meat consumption. Growing middle-class income is likely to transform the segment as demand for healthier, value-added poultry increases, with more consumers focusing on food safety.

Moreover, wealthier Indonesians are showing a trend towards packaged chicken products on the back of an increasingly modern retail network.

Pawan Kumar, Rabobank’s senior Analyst said this growing middle-class consumer base is a key factor in the Indonesian poultry sector.

The middle-class population is expected to double by 2020, growing from 74m in 2012 to a robust consumer base of 150m [by 2018]. It will be interesting to see how Indonesia’s poultry preferences change along with spending power and growing health consciousness,” Kumar said.

Modern retail

One of the major factors driving demand for processed poultry products is the development in modern retailing and foodservice, with consumers increasingly in favour of products that are easily accessible at clean supermarket outlets.

Kumar said: “Overall, the processed poultry sector is growing at a fast pace, providing investment opportunities in modern processing for both local and foreign modern retailing and foodservice players.

With a growing population of 250m, the Indonesian market will provide a great base for the foodservice industry to continue growing.”

Safe and secured supply in the long-run

Rabobank believes the foodservice industry has the potential to expand and drive demand for processed poultry.

“Multinational players such as KFC and McDonald’s require high standards for food safety and hygiene. Therefore, with food safety in mind, foodservice players are increasingly trying to secure processed products under more stringent conditions compared to open-air wet markets,” said Kumar.

While opportunities are abound in the poultry sector, there are still challenges to face by foodservice companies.

Poultry meat in Indonesia currently attracts import duties of 15-20% and must be certified halal, which poses a challenge for many foreign players who are looking to export to Indonesia.

However, the requirements around halal certification will create significant opportunity for foreign players to tap into their technical expertise in order to cater to the growing consumer needs in Indonesia.” added Kumar.

Subscribe to our FREE newsletter

Get FREE access to authoritative breaking news, videos, podcasts, webinars and white papers. SUBSCRIBE

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Related products

Related suppliers

Key Industry Events