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Health and Wellness in Indonesia

Indonesia health and wellness market driven by increased health awareness amongst consumers in 2012

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2014-01-31 01:47:02 - Health and Wellness in Indonesia - a new market research report on

Growing health awareness leads to further robust performance. The year 2012 witnessed the continued increase in health awareness among Indonesian consumers, which led to a growing preference for health and wellness packaged food. Consumers, especially middle- to upper-income urban dwellers, became more exposed to health issues, which were frequently covered in the mass media and hence became more willing to pay higher prices for healthier products. The higher price increases of many health and wellness products in 2012 in comparison to 2011 as an anticipation of fuel price hikes, also did not damage volume demand for these products, as the target consumers are not price sensitive. In turn, in 2012 health and wellness enjoyed an increase of one percentage point



over 2011 to post 15% retail value growth.

Fortified/functional remains the runaway leader. Fortified/functional packaged food and beverages were the most popular categories of health and wellness products in Indonesia over the review period. Indonesian consumers typically perceive food and drinks fortified with healthy ingredients as being more beneficial and value-for-money than those with certain less healthy substances at cheaper prices. As such, fortified/functional had more appeal and registered much higher retail value sales than better for you products. Despite the already high retail value sales, fortified/functional packaged food and beverages continued to grow stronger in 2012, to drive the overall performance of health and wellness products. The promising growth was driven by increasing manufacturer activity in launching novel fortified/functional packaged food and beverages products and the government´s support in promoting the health benefits of fortified/functional products.

Manufacturers extend lead through value-added products. Going into 2012, several prominent manufacturers of health and wellness products attempted to extend their lead by launching value-added products, including packaged food and beverages incorporating healthy ingredients. Among the key players were subsidiaries of global players, such as Nestlé, with its calcium-fortified powder milk Dancow Calcium Plus, Danone Dairy´s launch of fortified flavoured milk drinks Milkuat Tiger and Heinz ABC, with ABC Gold 100% juice fortified with eight vitamins. Local players also did not lag behind, with many prominent companies launching various novel health and wellness products in 2012. They included Jakarana Tama, with Healtimie instant noodles, Kalbe Farma with Fitbar snack bars, Campina Ice Cream Industry with Campina Lu Ve Vitee ice cream and Sari Enesis Indah, with Proman Energenesis energy drinks. The various new product launches helped the leading players maintain their positions in health and wellness products in Indonesia and fuel the growth of these products in 2012.

Retailers expanding their health and wellness product offerings. Towards 2012, retailers, especially hypermarkets and supermarkets, began to use health and wellness products as part of their competitive strategy against other retailers. They expanded their selection of health and wellness products in an effort to increase customer traffic and sales. Some upscale supermarkets, such as Kemchicks, have an organic aisle dedicated to organic food and drink products. Furthermore, 2012 also witnessed more health and wellness retailers being established in major cities, such as Jakarta, Surabaya and Bandung. They included Anak Lima, which claims to be the first and most complete store offering organic products, B Healthy Food Store and Agatha Organic Rice Store.

Manufacturer and retailer activities to ensure strong growth. More Indonesians, especially middle- to upper-income urban consumers, are expected to become more exposed to health issues frequently covered in the mass media, which may lead to their increased health consciousness. More importantly, manufacturers are likely to continue heavily investing in new launches and promotional efforts for their health and wellness products, while modern retailers are set to continue to grow in significance and provide more shelf-space for health and wellness packaged food. Health and wellness products therefore have the potential to post a respectable constant value CAGR over the forecast period.

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