MAP Boga Adiperkasa (MAPB IJ): The Es Kopi Wave

Mitra Adiperkasa (MAPI IJ) - Retail Therapy Is Alive and Well - On the Ground in J-Town

Mitra Adiperkasa (MAPI IJ): Digesting the New Structure

ASEAN Insight Provider

Jessica Irene

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

Indonesia Food, beverage and tobacco / Thematic (Sector/Industry)

In Nielsen's latest consumer survey, we find few data points and interesting consumer behaviors that we would like to share in this insight.As we may recall, 2019 is a political year with the general election being held in April. As the attention on political stability subsided, Nielsen's survey show that the top ongoing concern is on economic growth. With the GDP growth barely hanging above the 5% mark, the country needs a catalyst to move forward.President Jokowi is in his second term and is determined to turn Indonesia into a manufacturing hub. Labor law reform and tax cuts are among the top tasks to clear in order to attract foreign investments into the country. With the healthcare premium doubled next year, and the suggested cigarette retail prices up by more than 50%, FMCG growth rates are likely to remain muted. The latest Nielsen data continue to show a flattish volume growth rate for the top 58 FMCG categories. In terms of total value, the FMCG segment is shown to grow at 2-3% rate since 2017, about half of the national GDP growth rate. Worst performer is the coffee FMCG segment, down 6.5% YoY. Nielsen suspects that this is due to the competition from the exploding demand for quick serve iced coffee, as we have mentioned in our previous note <a href="https://www.smartkarma.com/insights/map-boga-adiperkasa-mapb-ij-the-es-kopi-wave" target="_blank" data-smartkarma-citation="insights:30774" rel="noopener">MAP Boga Adiperkasa (MAPB IJ): The Es Kopi Wave.</a>Among the modern retail format, the minimarkets continue to expand their market share. Nielsen recorded a 5.6% sales decline from the hypermarket and supermarket YTD July '19 while also noted an impressive 14.3% growth from the minimarkets. In conclusion, Nielsen saw a shift in consumer behavior as people adapt to the food online delivery system, which also indicatively affected certain categories in the FMCG. Given that inflation continue to remain soft, the staples growth rates will also likely continue to be muted. Shoppers are bargain hunting, citing that promotion and proximity are the two key reasons for shopping at a certain store and online.

In Nielsen's latest consumer survey, we find few data points and interesting consumer behaviors that we would like to share in this insight.As we may recall, 2019 is a political year with the general election being held in April. As the attention on political stability subsided, Nielsen's survey show that the top ongoing concern is on economic growth. With the GDP growth barely hanging above the 5% mark, the country needs a catalyst to move forward.President Jokowi is in his second term and is determined to turn Indonesia into a manufacturing hub. Labor law reform and tax cuts are among the top tasks to clear in order to attract foreign investments into the country. With the healthcare premium doubled next year, and the suggested cigarette retail prices up by more than 50%, FMCG growth rates are likely to remain muted. The latest Nielsen data continue to show a flattish volume growth rate for the top 58 FMCG categories. In terms of total value, the FMCG segment is shown to grow at 2-3% rate since 2017, about half of the national GDP growth rate. Worst performer is the coffee FMCG segment, down 6.5% YoY. Nielsen suspects that this is due to the competition from the exploding demand for quick serve iced coffee, as we have mentioned in our previous note MAP Boga Adiperkasa (MAPB IJ): The Es Kopi Wave.Among the modern retail format, the minimarkets continue to expand their market share. Nielsen recorded a 5.6% sales decline from the hypermarket and supermarket YTD July '19 while also noted an impressive 14.3% growth from the minimarkets. In conclusion, Nielsen saw a shift in consumer behavior as people adapt to the food online delivery system, which also indicatively affected certain categories in the FMCG. Given that inflation continue to remain soft, the staples growth rates will also likely continue to be muted. Shoppers are bargain hunting, citing that promotion and proximity are the two key reasons for shopping at a certain store and online.

Consumer Staples: Nielsen Survey