Look to Indonesia for opportunities during Ramadan, says Nielsen

By Kacey Culliney

- Last updated on GMT

Look to Indonesia for opportunities during Ramadan, says Nielsen
Indonesian consumers are driven to spend more on food and beverages during Ramadan, bringing opportunities for manufacturers, according to a new Nielsen study.

Nielsen recorded a 9.2% sales growth in consumer goods during 2010’s Ramadan. Of this, lower income groups increased their spending by 30%, middle income 16% and upper income 13%. It predicts a robust growth for 2011’s Ramadan too.

According to the Indonesian Association of Food and Beverages, the Ramadan quarter contributes almost 45% of total food and beverage annual sales.

Nielsen’s executive director for Retail Measurement Services, Yongky Susilo told FoodNavigator-Asia: “The Ramadan quarter is considered very important by manufacturers, as missing Ramadan targets means you will miss your numbers for the year.”

He said that consumption increases during the month of Ramadan because employees receive a Festive Day Allowance, equivalent to about one month’s salary.

Founder and principle of Hewar Social Communications Lisa Mabe, an expert in the Muslim market, told this website that Ramadan provides opportunities for manufacturers working throughout the Asia Pacific. She said it presents an ideal entry point for multinational firms and is a key time to tap into the Muslim market.

“Despite the fact that Muslims are fasting, a lot of money is being spent towards food items, so not reaching consumers during this time would be a major missed opportunity,” ​Mabe said.

The Nielsen research said there had been particular sales growth for assorted biscuits, wafers and soft drinks in 2010. These products are used to welcome guests and celebrate during Iftar – where Muslims break the day’s fast with an evening meal, traditionally starting with sweet snacks. Convenience foods also saw growth, sausages and meatballs saw a 34% growth and canned fish and meat saw a 119% growth during the holy month as consumers want faster meals.

It said that the growth is due to consumers spending for gifting and entertaining others.

International opportunity?

Senior advisor at InsightAsia Research Group Glenn Bruce said consumer spending growth during Ramadan currently affects local manufacturers rather than international as there isn’t a strong demand for imported products in Indonesia, apart from higher income households.

He said: “The bulk of products that are bought, in huge quantities, are locally manufactured products.”

However, Mabe said otherwise: “Worldwide, the halal food market alone is pegged at $560bn and Muslims across the globe are hungry for more halal options. They are willing to fork over significant spending levels for products that fit into their diverse lifestyles.”

Halal standards and creative marketing

Mabe said there are opportunities for both local and multinational brands in Indonesia and that irrespective of the manufacturer, halal quality is most important.

She said: “Indonesia is after all positioning itself as a leader in the halal certification space; assurance of halal standards is important to Muslim consumers.”

Nielsen’s Susilo said that manufacturers need to be strategic to reap opportunities during Ramadan in Indonesia.

He said: “Manufacturers and retailers need to be innovative, providing creative programs that will attract new consumers, particularly within the younger generation and those with higher purchasing power.”

The Nielsen report adds strength to previous findings from other market research companies. An August Euromonitor report on Ramadan trends said the Muslim consumer market is mostly untapped and that Ramadan provides opportunities to create connections and relationships with Muslim consumers.

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