According to latest report entitled Indonesia Dairy Food Industry by Ken Research, the Indonesian dairy industry is projected to experience robust growth with a CAGR of 5.4% from 2022 to 2027, and is expected to reach US$12.7 billion by 2027.
Ken Research attributed the growth to rising health awareness, a growing population with higher disposable incomes, and a sweet tooth for innovation. The following are the 4 major factors for growth:
* Health Takes Center Stage: Consumers are increasingly prioritizing their well-being, driving demand for fortified milk, yogurt with live cultures, and even dairy alternatives catering to specific dietary needs.
* Expanding Wallets: Rising disposable income allows consumers to explore diverse dairy options, indulge in premium choices, and embrace new flavor trends.
* Urbanization Cravings: Busy lifestyles in urban areas crave * convenient and readily available dairy products, fueling the rise of single-serve options, ready-to-drink milk, and innovative snacking solutions.
* Lactose Intolerance Not a Barrier: Growing awareness of lactose intolerance and veganism is leading to a surge in plant- based and lactose-free options, widening the consumer base.
The report emphasised that the Indonesian dairy market is not just growing but is also evolving. Exciting future trends to watch include rapid growth of functional dairy products i.e. milk infused with probiotics, vitamins, and minerals, or yogurts with added protein. These products cater to the rising number of health-conscious consumers seeking added benefits in their dairy choices.
In the future, there will also be increasing demand for personalisation and customisation not only in Indonesia but globally. Products can be tailor made to individual nutritional needs or taste preferences, all thanks to the rapid development of AI and other technologies.
Finally, demand for ‘sustainable’ products will grow as environmentally- conscious consumers drive the demand for eco-friendly packaging and sourcing in dairy products. Dairy manufacturers will respond with initiatives like using recycled materials or support sustainable farming practices. With higher disposable incomes in Indonesia, demand for these products which will be sold at a premium will eventually grow as well especially in the major urban cities like Jakarta, Medan and Surabaya.
