A tour of Indonesian food and beverage companies

Sneak peek of Fi Asia 2018

FoodPacific Manufacturing Journal is back from visiting a number of food and beverage processing facilities in Indonesia, from February 27 to March 1, as part of UBM Asia’s programme to acquaint media with the current trends in the country’s food and beverage industry.

The press tour organised by UBM’s groups from Indonesia and Thailand was conducted in preparation for Fi Asia’s 23^rd edition in Jakarta from 3-5 October 2018. To date, 750 exhibitors from various countries and regions are participating in the event.

Fi Asia 2018 press conference at Harris Suites fx Sudirman, Jakarta 

Industry overview

There are many reasons why Indonesia is an attractive market, the most obvious of course is its sheer size – 261.9 million, or nearly half of the population of the ASEAN region (June 2017 figure from GAPMMI or the Indonesian Food and Beverage Association). By 2020, the consumption class is estimated to reach 140 million. But if you want to enter this market, you have to know what’s available, and you have to be ready to provide what consumers want NOW. One of the key opportunities in Indonesia is in ingredients, most of which are still sourced from abroad.

In a presentation to the media, GAPMMI’s Irwan Wijaja, head of SMES Development Committee, shared that the food and beverage sector accounted for 33% of Indonesia’s GDP in 2016. In Q3 2017, it witnessed a growth to 35%.

Mr Wijaja also pointed out a significant trend in the local industry – the number of medium to large establishments is declining while the number of small and micro companies is rising. To compare, Indonesia had 5,794 mid-to-large food establishments and 1,198,491 small-to-micro companies in 2014. There were 374 mid-to-large beverage establishments and 44,694 small to micro beverage companies in the same year.

In 2015, the number of mid-to-large food establishments dipped to 5,438 while the number of small-to-micro companies grew 1,567,019. The same trend occurred in the beverages sector where only 310 mid-to-large scale companies were left, but small -to-micro companies grew to 1,614,149. Corresponding to this trend, the number of workers in medium to large companies dropped, and that of small to micro-scale establishments increased. In 2014, workers engaged in larger companies numbered 877,771, and this fell to 719,116 in 2015. Smaller companies engaged 2,324,212 workers in 2014, and 3,664,208 in 2015. In the beverage sector, larger companied engaged 52,681 in 2014, and 46,379 the year after. Small to micro beverage companies grew from 81,027 in 2014 to 85,167 the year after.

While it may seem odd that fewer companies are expanding in size, it represents a trend toward the growth of convenience stores and mini marts mushrooming in and further out of the main cities. Mid-size establishments are choosing to go small. Employees from larger companies have chosen to move on and set up their own small companies.

It’s no secret that food preferences are evolving along with changing lifestyles. To drive a point, Mr 

Mr Wijaja said a problem like traffic congestion in Jakarta has led to a rise in consumption of convenience products like biscuits.

Indonesia is a huge market for food and beverage, but the key is knowing the flavours they want. Indonesia-based companies are poised to grab a larger share of the local market.

GAPMMI’s Mr Irwan Wijaja, head of SMES Development Committee briefs the media
on the state of Indonesia's food and beverage industry

 Epitome of Indonesia’s capability

High quality ingredients

A visit to five companies leading in their own sectors epitomized the country’s capabilities in food and beverage sector. We saw the products, services and facilities of ingredients companies, Foodex Inc, BT Cocoa, Indesso, and beverage manufacturer PT Sinar Sosro, as well as food safety inspection experts Sucofindo.

Our first stop was to Foodex Inc., a taste solutions provider that offers savoury seasonings, meat extracts and enhancers, flavours and functional ingredients. The company started out as blending ingredients from other flavour houses in 1995. Ten years later, it developed its own technology which combines two processes –  natural meat extraction and the Maillard Reaction to produce a meat flavour concentrations suitable for various applications including seasonings, sauces, and condiments. 

Foodex uses imported raw materials, but the company’s finished products are competitively priced to meet the needs of customers in Southeast Asia. The products are also ready to use, which means customers don’t have to process their ingredients to extend the shelf life.

During the tour, Foodex served up some interesting meals that showcased their ingredients. We tasted a flavourful lasksa, Mexican chili beans, noodles, honey-soy, sambal, and mildly flavours for sausages.

The company also prides itself for having its own sensory evaluation through panel or surveys for its customers. It has a pilot plant where customers can engage with Foodex experts.

Inside Foodex's warehouse 

A quick photo while the press visits the R&D section of Foodex

At Indesso, the scent of lemongrass, and other sweet flavours in production are wafting from parts of the compound. Our visit was timely as their new R&D centre in Cileungsi was already operational. The company is proud to have a strong research and development background for developing aromatics, extracts and savoury products. Innovation is the focus of its pilot plants.

Indesso has been manufacturing ingredients for the food, flavour and fragrance industries since 1968, and it has been an exclusive distributor of Firmenich for flavours and fragrances, PureCircle for stevia extracts, Nexira for acacia gum colloids, Chr. Hansen for natural colours and colouring foodstuff, and Ballantyne’s cheese powders and dairy powders, in Indonesia.

Members of the media tour Indesso's new R&D centre

At Indesso's state-of-the art kitchen where products
are made according to customers' requirements

Oh, cocoa

We enjoyed the tour of BT Cocoa’s facilities. While we do know how chocolate is made, it still makes a big difference to be in the location itself, and to listen to the experts talk about the cocoa process. Some of my media colleagues haven’t seen a cocoa tree and fruit before, so it’s twice exciting for them. On the other hand, in my grandfather’s garden, two cocoa trees bear a lot of fruit.

Cocoa is one of the major products from Indonesia, and they do high quality cocoa which goes to both the growing home market and to major chocolatiers in many parts of the world. In 2017, Indonesia recorded a capacity of 465,000 tonnes of cocoa. The local market is significantly growing as the bakery, confectionery, and hospitality sectors expand. In 2018, Indonesia is forecast to consume a whopping 99,000 tonnes of chocolate*.

BT Cocoa, among the most prominent producers in the country, is very confident about the growth of the cocoa industry especially in Asia Pacific. In 2018, this region’s chocolate market will increase by 23% to reach USD16.3 billion, according to Euromonitor.

A Nielsen survey shows the opportunities are in cities like Manila, Bangkok, Singapore, Kuala Lumpur and Petaling Jaya in Malaysia, and cities in Indonesia including Jakarta, Bandung, Karawang, Bekasi, and Surabaya.  The rise in the middle class supports the growth in consumption.

*http://www.dw.com/en/asias-growing-appetite-for-chocolate/a-18100633

Tasting BT Cocoa's chocolate liquor, cocoa butter, and cocoa powder
in different finished products. Absolutely "good from the source"

BT Cocoa accounts for 30% share of the Indonesian cocoa market

 A bottle of tea, please

Touring is a pleasant activity, but the heat and traffic in Indonesia can drain the energy. Fortunately, our next stop was a thirst quencher indeed. PT Sinar Sosro, Indonesia’s #1 tea drink and the country’s first producer of bottled tea, welcomed us with beverages straight from the refrigerator. The brands are Teh Botol Sosro, Fruit Tea Sosro, and S-Tee, and Tebs (my personal favourite, carbonated tea!). The company also produces bottled water, Air Mineral Prim-A.

A visit to one of Sosro’s facilities presented the entire beverage process, from water treatment to packaging. We saw the type of teas that are used, the production of PET bottles (form-fill-seal) and the cleaning and inspection of glass bottles, as well as the water treatment area. The company has a capacity of 3 million cases per month, with each case containing 24 bottles. About 10% is exported.

PT Sinar Sosro was the first to offer Indonesians tea beverages
in PET and glass bottles

Bottle inspection at PT Sinar Sosro

Food safety and hygiene

Food safety is an integral part of the food and beverage process. In recent years its role has been more emphasized in the food and beverage industry as continued incidences of food fraud and contamination at various stages of the production process or supply chain are discovered. While ensuring safety and hygiene in the production floor and everywhere else in the company will reduce incidences of contamination, the attack on product integrity due to counterfeiting remains a challenge for any establishment.  

The media in white gowns get to see the different laboratories
and equipment at Sucofindo

Sucofindo offers all tests and certifications required of
food and beverage manufacturers from farm to table

Companies like Sucofindo, Indonesia’s first inspection firm specializing in laboratory services are well equipped to help food and beverage as well as other industries ensure the safety and quality of their products. The firm is majority owned by the Indonesian government and partly by the SGS (Societe Generale de Surveillance Holding SA).

At Sucofindo, food and beverage suppliers and manufacturers can have their products inspected, certified and tested according to industry standards including HACCP (Hazard Analysis and Critical Control Points), the local standard, SNI (Standar Nasional Indonesia). The latest technology and equipment such as the Digital Droplet Polymerase Chain Reaction, porcine detection kit, and many others to help companies maintain food safety, hygiene and quality standards – from farm to table. Sucofindo also conducts training and consultation.

If there is one takeaway from all these company visits, it is clear to me: premium quality is at the centre of everything they do.

Very special thanks to the members of UBM Asia who personally organised and joined us in this trip and made it as educational and comfortable as possible for the press. 
Ms Rose Chitanuwat, Group Director - ASEAN
Ms Nureen Chantarawirod, Assistant Marketing Manager
Ms Maria Lioe, Event Director
Ms Anna Maria, Sales Manager
Ms Melissa Makmur, Marketing Executive