Indonesia Foodservice Market - Growth, Trends, and Forecasts (2023 - 2028)

Indonesia Foodservice Market - Growth, Trends, and Forecasts (2023 - 2028)

The Indonesian Foodservice Market was valued at USD 34,985.26 million in the current year and is projected to register a CAGR of 8.44% over the next forecast period.

The Indonesian foodservice market is expected to be primarily driven by the increasing frequency of dining out amid time-pressed schedules and the growing influence of western dietary patterns due to the presence of international companies, particularly in tier-1 cities, such as Jakarta, Surabaya, and Medan. Additionally, the market is driven by factors such as the growing percentage of the young and working population and the availability of organized food service restaurants offering quality food and services. Moreover, the growing disposable income of consumers and the increase in exposure to different varieties and cuisines of food over the last few years has led to a rise in the demand for restaurants that offer a complete dining experience. Furthermore, Indonesia is an attractive market for international food service companies. Over the past few years, there has been an increase in export opportunities for suppliers of food and beverages in United States, especially in the restaurant and hotel sector, due to the growing tourism sector in the country. This is expected to continue during the forecast period, thus, leading to the growth of the market in the country.

The Indonesian food industry is expected to witness significant growth during the forecast period while increasing its global food trade contribution yearly. Over the past few years, Indonesia has seen a proliferation of fine dining restaurants, cafes, pubs, bars, clubs, lounges, and international fast-food joints, which cater to the millennials’ changing food habits, in turn driving the market.

The tourism sector is an integral part of Indonesia’s economy, accounting for around 5% of its gross domestic product in 2021. However, the popularity of international tourism varies greatly from region to region, with the island of Bali being Indonesia’s most popular tourist destination. Although most international hotel chains are in Jakarta, Bali, Bandung, Surabaya, Yogyakarta, and Medan, more are expanding into secondary cities due to infrastructure development and the promotion of new tourist destinations. The growth of the tourism sector and the foodservice industry are interdependent. The market studied is highly diverse, comprising high-end hotels and restaurants that serve local and international cuisines, fast-food outlets, cafes and bars, bakeries, low-end small restaurants, street-side restaurants known as “warungs,” and vendors that sell food to customers on the street. The growth of these businesses has been in line with the development of tourism and the growing middle-class population. In addition to incorporating popular local dishes into the national food category, the UN World Tourism Organization (UNWTO) announced Bali, Joglosemar (which includes Yogjakarta, Solo, and Semarang), and Bandung as culinary destinations that are in line with the standards set by it. Therefore, the tourism sector in Indonesia, which has been growing gradually over the past decade, is expected to continue augmenting the growth of the market over the forecast period.

In line with the increasing urbanization, there has been a surge of consumers seeking services with the most convenience. The internet, e-commerce, and online platforms have become increasingly popular, given many small-chained outlets, higher penetration, and acceptability among consumers. The establishment of new chained outlets and expansion of the existing ones is being witnessed, thus increasing their popularity among consumers. Owing to this, the online channel in the country is growing at the fastest pace. The food delivery apps such as Go-Jek's ‘Go-Food’ offer a much more seamless delivery service, which has gained a significant number of users in recent years. There has also been an increasing shift toward online food ordering via mobile applications among consumers in Indonesia, which has been boosting the overall Indonesian foodservice market. Consumers are increasingly ordering local Indonesian cuisine from these online food applications, thus, prompting a shift toward Indonesian food. Witnessing the growing demand for delivery apps, many restaurant owners and family-owned businesses are increasingly looking forward to operating through this platform to increase sales. Hence, online channels are boosting the foodservice sector in the country.

The Indonesian foodservice market is fragmented, with the major market share held by prominent local and global players, such as McDonald's Corporation, Yum! Brands Inc., Domino's Pizza, Inc, and PT Eka Bogainti. Major players in the market have been engaging in strategies like product innovation and geographical expansions, predominantly in the Indonesian foodservice market. Production innovation is a key strategy adopted by the major players in the studied market. Key players are actively expanding their innovative product ranges and increasing their offerings to meet the growing demand for consumer-led natural, organic, vegan, and safer products. Several international companies and restaurants are expanding their commercial activities and gaining a competitive advantage by exploring new markets and introducing new product innovations to cater to Indonesian consumers' demands. These players are now focusing on social media strategies and online distribution channels for their products online marketing and branding to attract more customers, expand their physical retail outlets, and acquire or merge with other major consumer brands.

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support