Nick McIlroy, Shanghai Office, Bord Bia- Irish Food Board

A new report released by McKinsey this month suggests that consumer markets in Indonesia are set to experience rapid growth between now and 2030.  Drawing comparison to the sustained growth seen in the Chinese and Indian markets over the last decade, McKinsey points to consumption by a growing middle class as being the key driver of this upward trend. 

Household consumption in the food and beverage sector is expected to witness an annual compound growth rate (CAGR) of 5.2% and will be worth an estimated €148 billion by 2030.  McKinsey points out that Indonesian consumption - at 61% of GDP - is already much higher than its neighbours although consumption patterns and tastes may vary considerably in different urban market clusters.  McKinsey suggests that a sound understanding of the differing market dynamics is critical for success and adds that engaging with local partners may be beneficial.

In addition to increased household consumption, the US Department of Agriculture’s Indonesia Dairy Annual Report 2012 identifies increased consumer health awareness, urbanisation and improved logistics infrastructure and production capacity as factors in increased levels of dairy imports to Indonesia. 

Ireland’s single biggest food export sector to Indonesia in 2012 was in dairy products, which were valued at almost €17 million.