FMCG Outlook Indonesia 2023
FMCG Outlook Indonesia 2023
FMCG Outlook
Indonesia 2023
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Foreword
FOREWORD
FMCG Outlook Indonesia 2023: Changing consumer behaviour amidst the
pressures of inflation
Every year, Kantar Worldpanel Division releases a comprehensive report covering the FMCG industry and
sectors in it by showcasing the latest trends and consumers’ purchase behaviours. Some of the sectors
covered in this report include baby, home care, personal care, pantry essentials, snacking, and beverages.
Price inflation pressures mean that consumers have had to manage their expenditures and adjust their
spending. We have compiled some key trends in changing purchase behaviour and provided insights on
how brands need to adapt to find pockets of growth. We have also included the FMCG outlook for 2023 to
Venu Madhav give you an overview of the forecasted growth for the industry. We hope this report can help you to
Managing Director, Worldpanel navigate your strategy in the upcoming year to grow your customers.
Division, Kantar Indonesia
If you have any further queries, please do not hesitate to get in touch with your usual Kantar contact, or
you can fill in the form at the end of this report.
Best regards,
Venu Madhav
TUNE IN TO THE
DISCUSSION: Special
Podcast Episode
FMCG
Changing behavior in the face of inflation
Rationalisation in spending
With inflation climbing to its highest level in the With an average price index (API) of 80-90,
past six or seven years, consumer confidence some affordable brands are managing to gain
has recently taken a dip. As a result of this penetration and a high repeat rate above 60%
inflationary pressure, households are focusing by delivering efficacy at the right price. As a
more on necessities like transportation, utilities, result, they are a good alternative for
and education, and holding back on spending downtrading.
non-essentials, such as durable goods.
The forecasted trend is dynamic depending on the macroeconomic situation, our Expert
Solution team can help you to navigate firmly amidst this dynamic. Find out more
FMCG growth outlook for 2023
Currently, the global macroeconomic climate FMCG, including food as the main sector. But
has had limited impact on Indonesia, but this with better macroeconomic conditions, there
may change in the year ahead. Given the could be a more positive outlook.
change in shopping preferences and
behaviours, FMCG growth in the whole of 2023
is predicted to be lower than the previous year
at 6.5%. Slower growth is expected across
FMCG, including food as the main sector. But
What should be
the strategy for
2023?
#2 Deaggregate
Look beyond Java. Outer Java has more
potential with higher population growth
and FMCG spending #4 Understand media habits This chapter uses Kantar's panel FMCG data
With the acceleration of digital, it is per Oct 2022.
As digitalisation continues to accelerate, essential to understand shoppers’ media
secondary cities and rural areas are habits and the different media to engage Watch the webinar version for this chapter
gradually catching up with the right shoppers’ profiles here
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Care: Rationalising for Home Care and General Care categories have had to manage the
impact and response from consumers. As prices increase, shoppers
better value are looking for for better value to help them adjust their spending.
Back to basics in Home Care
After a stable performance last year, consumer spending on Home Care has increased by 4% due to inflationary
pressures. Necessities categories such as Detergent and Dishwash are the ones that stabilized while smaller
categories are challenged as shoppers save up for the essentials.
Consumers are managing rising purchases compared to last year as time to generalise. Each
prices by buying less in volume and the price increase, especially in demographic is responding
shopping less often and it happens Sumatra and Outer Islands. differently to the economic
across social economic class with However, both regions still situation, so demands different
upper and middle-class consumers managed to have stable volume approaches from brands too. As
are not cutting back as much as growth. well as segmenting different
lower-class consumers. consumer profiles to attract them,
But while this this sector is in brands need to identify each
Across regions, they are allocating growth, brands must not get category’s highlights and
more budget to Home Care complacent and now is not the performance.
purchases compared to last year as time to generalise. Each
Key winnings for brands in FOOD FOR THOUGHTS
dual functionality in their products,
attracting up to 6 million new
Overall the Personal Care sector growth this year due to price reprioritize General Care by seeking FOOD FOR THOUGHTS
experienced incremental value increases and inflation. The Beauty for smaller pack and lessen the While penetration is still the
growth this year due to price category is driving this growth, with purchase frequency. king in the equation of
consumers are still increasing their growth formula for brands,
cash outlay for Make Up and consumption is also a
Skincare through expensive determining factor as your
products and premiumization. brand needs loyal buyers to
General Care is starting to see signs strive and grow. Find out
of recovery this year following the more
pandemic, with consumers
reprioritize General Care by seeking
Key take-aways for brands in General than two channels. Brands must
ensure they are available across
This chapter uses Kantar's panel FMCG data per Oct 2022.
Watch the webinar version for this chapter here
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Baby
Stand out to win moms’ hearts
Baby Sector: stand out to win moms’
hearts
Baby categories have remained and diapers. The value growth is the sector, which suggests that
buoyant in recent years, with higher than the price increase, shoppers be might be trading down
overall growth of 5% in both 2021 indicating an opportunity to drive to value alternatives to help save
and 2022. Looking in more detail premiumisation in the category. money.
within the sector, nutrition has However, the price of diapers is
grown faster than personal care rising more rapidly than growth of
and diapers. The value growth is the sector, which suggests that
The majority of spend in the baby The basket size for personal care
sector goes on nutrition and across consumer groups varies How do you know if
diapers and is relatively consistent alongside the cash outlay. Upper- Minimarket and GT are still
across different groups of class shoppers who have higher the most relevant touchpoint
consumers. Upper-class shoppers disposable incomes shop in more for your brands? Or if you
seem to spend more on nutrition as categories, while the middle- and should seek opportunities in
they buy more premium/super lower-classes only maintains their other channel?
premium brands. Lower-class basket size. As such, the
shoppers tend to spend more on functionality may be more relevant Get in touch with our experts
diapers since they tend to purchase to middle- and lower-class to explore your opportunities
mostly in sachet packs with a shoppers, while some extended across channels.
higher price per unit compared to benefits may help to attract upper-
larger packs. class shoppers.
The favoured channel to purchase products varied across categories. Online stores are preferred when buying
personal care products, such as Telon Oil, while Diapers are more likely to be purchased in specialty stores.
Minimarket and GT remain the backbone for all categories, but as consumers adopt a more omnichannel
mindset, it’s important that brands tailor their route to market for each different category across the relevant
touchpoints.
The rise of affordable option without
neglecting their efficacy. As a
Brands can secure their spot in
shoppers’ baskets by not only
Food
Unlocking pockets of growth
Food: unlocking
pockets of
growth
Although food is the sector most impacted by
inflation, it remains resilient as consumers still
depend on this sector for their Pantry Essentials
and Snacks. Food offers opportunities for that
are unique to each segment and category. In
this sector, we’ll divide our insights into the two
sectors: Pantry Essentials and Snacks.
Pantry Essentials
Pantry Essentials categories grew by 12%, but are buying smaller volumes due to price
consumers are coping with rising inflation by increases. Additional Pantry Essentials such as
scaling down the volume of Cooking Aid Mayo, MSG, Canned Food and Frozen Food are
products they purchased and Reducing the more resilient and have been growing in terms
number of shopping trips. of volume.
Understanding the balance between the magic price and the right packsize is key for brands to grab
shopper’s attention and to secure a place in their shopping basket, despite changing behaviours.
Magic price refers to a specific price point Because of mobility returns, convenience FOOD FOR THOUGHTS
where shoppers are willing to pay for one packs in the Biscuit category are showing
unit of product. In General Trade, which a rebound for both In-Home and On- How much the consumers are willing to
accounts for 80% of Snacking value the-go occasion. For in-Home occasion, spend for each product in each trip?
share, the magic price has shifted from shoppers might be stocking up on Which consumers group contributes
Rp 1,000-1,500 price point to convenience packs, while sacrificing higher to the overall Snack's value
2,000-3,000 price point. family pack as they might have less growth? Talk to our experts
sharing moments.
#2 Innovate to extend recruitment #3 Seasonal occasions make a comeback
Flavours in snack is one of the key ways to After two years of restricted holiday seasons
attract buyers. This year, chocolate continues because of the pandemic, this year’s festive
to hold the top position in term of value, But season is bigger and this trend is expected
newly launched flavours, like Peach Yogurt, continue in future. Snack categories can benefit
Brown Sugar, and Cheesy Milky Corn, are able through seasonal packs that join in with the
to attract up to 1.5 million households each. festivities and meet consumers’ aspirations.
This shows that innovation is still relevant in
Snack categories and it’s important for brands
to extend their innovation strategies.
Beverages
Ride the momentum of mobility comeback
The comeback of the out-of-home market
In 2022, the out-of-home market has been in
recovery mode after getting hit during the
pandemic. Value growth of 6% in 2021
indicates a promising recovery for the
beverages market, with the out-of-home
contribution above 60%, double that of in-
home consumption. As a result, growth for the
total beverages market (in-home and out-of-
home) is 5%, driven by faster growth in out-of-
home. Greater mobility post-pandemic means
that school-age shoppers are again driving the
growth in out-of-home consumption, with
young children (<10yo) and teenagers
(11-20yo) becoming the fastest-growing
cohort. There is huge potential for the
beverages market to attract more young
shoppers to become the main contributor in
Indonesia.
Leverage different references
across shoppers’ profiles
Shoppers’ preferences are varied, and brands need to adjust their recruitment strategy based on the
core buyer profiles. For example, the growth drivers for the dairy and non-dairy segments are
different, with young children (below 10yo) driving the dairy segment and teenagers driving non-
dairy.
Younger shoppers prefer functional drinks, which deliver benefits for growing up, such as liquid milk.
While teenagers tend to be more experimental and look for more flavours as refreshments, such as Get in touch with us to identify your core
ready to drink (RTD) tea and juice. Meanwhile, older shoppers opt for healthier hydration as their buyers and build the effective strategies
main preference, such as mineral water, as well as flavoured refreshments. The fact that some to reach them.
categories are more prominent in certain age groups, it is important for brands to think about their
recruitment strategies by focusing on core buyers and also extending to the other cohorts.
Understand the
triggers for
purchasing
Beverage consumption may depend on specific
needs at specific times of the day. In the
morning, functional drinks, such as liquid milk
and mineral water, may be a preference for
breakfast consumption. Later in the afternoon,
the preference might be for refreshment, which
means some categories like RTD Tea are more
relevant for this occasion. Some categories like
RTD Juice and isotonic are preferred to unwind
later on. Understanding the time of purchase
(and consumption) will help brands target the
right occasion and trigger the purchase with a
relevant narrative. Daytime (11am to 5pm)
becomes the critical window of opportunity for
brands to tap into. Most purchases across the
categories are mid-morning to afternoon,
however, there are finer distinctions when it
comes to early morning and evening windows.
In addition to purchase occasions, taste is a key
factor in triggering purchases for beverage
categories. Some categories are managing to
attract new shoppers with acceptable flavours
in addition to its functionality. For brands,
thinking about the essentials of flavour,
function, and occasion will help trigger
purchases and grow the category.
Impulse purchase has grown continuously Kantar Indonesia’s Worldpanel Division invites
The landscape of the Consumers Health over the past three years, particularly in you to ponder over what to expect from 2022.
industry; focusing into curative and Sumatra. With first class insights, we serve you a
preventive segment. Recent improvements in shopper recruitment comprehensive outlook to help you establish
Shoppers profile based on their demography and growth have been seen in both RTD dairy the future-proof strategies for your brands.
and their priorities and non-dairy beverages.
Road to market strategy with tailored based The core buyers of RTD dairy are kids aged 10 READ MORE
approach upon different shopping missions and below while the older groups dominate
the non-dairy segment
READ MORE
READ MORE
Venu Madhav Managing Director, Worldpanel Andi Siswanto NBD and New Initiatives
LIST OF CONTRIBUTORS Division, Kantar Indonesia Director, Worldpanel Division, Kantar Indonesia
Helmy Herman Account Director, Worldpanel Delia Nugraheni Account Director, Worldpanel
Division, Kantar Indonesia Division, Kantar Indonesia
Nafira Meutia Account Director, Worldpanel Evita Nirmalasari NBD Director, Worldpanel
Division, Kantar Indonesia Division, Kantar Indonesia
Zahra Putri Account Executive, Worldpanel Rayhan Aditya Account Executive, Worldpanel
Division, Kantar Indonesia Division, Kantar Indonesia