Indonesia is ASEAN’s most populated country with almost 250 million people, roughly 40% of the region’s total population. It also has the largest land area, contributing 43% to the total land size of Southeast Asia (ASEAN), while accounting for roughly 35% of the region’s economy (GDP).
Having said that, it also has the largest amount of rainforest and nature reserves covering more than 50% of its land area. With rapid economic development, much of these protected reserves were threatened by both legal and illegal miners and agricultural activities. This has resulted in growing awareness of Indonesians on sustainability and the urgency to reduce carbon footprint and minimise climate change.
Environmentally-friendly and healthy food and beverages are one of the major consideration by Indonesian consumers who promote sustainable lifestyles and practices.
FMCG Gurus Sustainability Survey done in late 2019, prior to the pandemic outbreak, on 1,000 consumers in Indonesia showed interesting findings. According to the survey, roughly 44% of Indonesian consumers were researching on how to lead a more environmentally friendly lifestyle.
Presently, there are many food and beverage products that adopt sustainability claims, however there is a considerable amount of distrust among Indonesian consumers on these claims. According to findings from FMCG Gurus, consumers have been subject to greenwashing in the past, where claims towards environmental commitments have later proved to be unfounded or misleading. Roughly 2 out of ten consumers said they did not trust environmental claims made by brands (see Chart 1.0). As such, it is now up to the various brand owners to reinforce and validate their claims to the consumers by providing scientific or material evidence of the claims on their products. In a related Blockchain Survey, it was also found that 59% of Indonesian consumers wanted these brands to also monitor the supply chain of their suppliers. This is to avoid the possibilities that the environmental claims made by brands could be undermined by the practices of their suppliers, of which they were not aware of.
The survey also found that two-third of consumers in Indonesia were changing their diets and eating habits in the past 2 years (2017 – 2019) in order to lead a more sustainable lifestyle. This has resulted in greater consumer attention to plant-based food products with growing number of Indonesians adopting a vegan or flexitarian diet. There is also a stronger focus on reducing food waste and reliance on locally-sourced food and beverage products. (see Chart 2.0)
Roughly an equal percentage of Indonesian consumers found the switch to a sustainable dietary lifestyle difficult (34%) as compared to easy (34%). There are barriers to leading an environmentally-friendly diet (see Chart 3.0). The main reason cited was that plant-based food was found to be ‘bland’ and ‘boring’ (52%). Indonesian consumers still felt that plant-based products are not perfect substitute to real meat or real dairy products in terms of taste and variety. Apparently, at the time of research until now, there could be some interesting developments for the plant-based meat category with latest innovations having some products almost close in taste, smell and appearance to the real meat, although ‘price’ might still be a barrier to entry. However, with rising disposable incomes, and as plant-based meat options grow in production scale, price will soon become more affordable to many middle-income Indonesian consumers. Plant-based meat producers should look at Indonesia as the next potential big market after China and Japan for the Asian region.
(Although the FMCG Gurus survey was completed in late 2019, it however continued to give a representative picture of the Indonesian consumer market. In fact, with the ongoing pandemic, the shift in favour of sustainability and environmentally-friendly food products has and should become even more intense.)
