Breakfast Cereals in Indonesia

Euromonitor International
December 2020
BREAKFAST CEREALS IN INDONESIA Passport i

LIST OF CONTENTS AND TABLES

KEY DATA FINDINGS.................................................................................................................. 1
2020 IMPACT ............................................................................................................................... 1
Home schooling boosts demand for children’s breakfast cereals ............................................. 1
Households go family-sized as economy shrinks ..................................................................... 1
Hot cereals benefits from A healthy and nutritious image ......................................................... 1
RECOVERY AND OPPORTUNITIES .......................................................................................... 2
Key to success: Products that are good for your health and good for your pocket ................... 2
E-commerce set to benefit from COVID-19 .............................................................................. 2
Foodservice sales likely to be constrained by bleak economic forecast ................................... 2
CATEGORY DATA ....................................................................................................................... 2
Table 1 Sales of Breakfast Cereals by Category: Volume 2015-2020 ...................... 2
Table 2 Sales of Breakfast Cereals by Category: Value 2015-2020 ......................... 3
Table 3 Sales of Breakfast Cereals by Category: % Volume Growth 2015-
2020 ............................................................................................................. 3
Table 4 Sales of Breakfast Cereals by Category: % Value Growth 2015-2020 ......... 3
Table 5 NBO Company Shares of Breakfast Cereals: % Value 2016-2020 .............. 4
Table 6 LBN Brand Shares of Breakfast Cereals: % Value 2017-2020..................... 4
Table 7 Distribution of Breakfast Cereals by Format: % Value 2015-2020 ............... 4
Table 8 Forecast Sales of Breakfast Cereals by Category: Volume 2020-2025........ 5
Table 9 Forecast Sales of Breakfast Cereals by Category: Value 2020-2025 .......... 5
Table 10 Forecast Sales of Breakfast Cereals by Category: % Volume Growth
2020-2025 .................................................................................................... 6
Table 11 Forecast Sales of Breakfast Cereals by Category: % Value Growth
2020-2025 .................................................................................................... 6

© Euromonitor International
BREAKFAST CEREALS IN INDONESIA Passport 1

BREAKFAST CEREALS IN INDONESIA

KEY DATA FINDINGS
▪ Consumers working and studying from home boosts demand in 2020
▪ Sales are set to see current value growth of 7% and retail volume growth of 5% in 2020 to
reach IDR1,425.3 billion and 13,000 tonnes
▪ Hot cereals is the most dynamic category in 2020 with current value growth of 10%
▪ The average unit price of breakfast cereals is set to rise by 1% in 2020
▪ Nestlé Indonesia PT dominates with a value share of 52% in 2020
▪ Over the forecast period, breakfast cereals is projected to increase at an 8% current value
CAGR (6% 2020 constant value CAGR) to reach IDR2,091.4 billion in 2025

2020 IMPACT

Home schooling boosts demand for children’s breakfast cereals

As part of its efforts to contain the spread of COVID-19, the Indonesian government closed
educational facilities for part of 2020 with children forced to study at home. With children
spending more time at home this provided a boost to a range of breakfast cereals, especially
children’s breakfast cereals which many parents perceive to offer a nutritious start to the day.
Home schooling also boosted demand for children’s breakfast cereals as a convenient
afternoon snack, with these products served without milk for this purpose.

Households go family-sized as economy shrinks

In response to LSSR measures many households changed their shopping habits. In breakfast
cereals this included shifting from smaller packs to larger family-sized packs which not only buy
into the stockpiling trend, but which also offer better value. With household incomes coming
under mounting pressure priorities are changing with consumers becoming more price
conscious. For example, Nestlé’s Honey Stars has seen stronger demand for its 300g packs in
2020 than for its 20g single-portion packs in 2020. This has of course also been influenced by
the home seclusion resulting from COVID-19 with consumers have less need for on-the-go
products. Prior to COVID-19 there had been a trend towards smaller on-the-go packaging, such
as 20g packs, but these are not very economical with consumers paying more for the
convenience. With prevailing economic uncertainty, it is likely that family-sized packs will
continue to gain ground.

Hot cereals benefits from A healthy and nutritious image

Hot cereals has seen contrasting fortunes in the retail and foodservice channels. In retail
terms it has been the most dynamic category within breakfast cereals in 2020 with the dominant
Quaker Oats brand seeing strong gains. These products benefits from a healthy and nutritious
image and with people spending more time at home they have time to prepare hot cereals.
Furthermore, when COVID-19 first manifested itself in Indonesia there was a wave of charitable
giving with consumers buying groceries for more vulnerable members of society. This included
hot cereals which are commonly served to the homeless and less privileged children as a
warming and nutritious meal. On the other hand, foodservice sales have seen significantly
slower growth than in the previous year. Hot cereals are typically served by street vendors

© Euromonitor International
BREAKFAST CEREALS IN INDONESIA Passport 2

operating across the country, but social distancing and other LSSR measures have limited their
sales in 2020. Furthermore, with children and many adults studying and working from home
there has been less demand for on-the-go breakfast options.

RECOVERY AND OPPORTUNITIES

Key to success: Products that are good for your health and good for
your pocket
COVID-19 has helped to generate increased interest and awareness in health and wellness
with this likely to influence consumer purchasing decisions over the forecast period. In terms of
breakfast cereals this is likely to see increased demand for products with less sugar and fat, but
also potentially fortified products and products with healthy ingredients such as nuts and fruits.
Muesli and granola is a niche category in Indonesia, largely due to its high prices and limited
distribution, but its health claims could help bring these products into the mainstream over the
forecast period, although this would likely require significant investment in marketing. Key to
success for all producers of breakfast cereals will be communicating the benefits of their
products while remaining price competitive.

E-commerce set to benefit from COVID-19

Hypermarkets, supermarkets and convenience stores account for most sales of breakfast
cereals in Indonesia, with these products having a wider appeal among mid- and high-income
families who appreciate the convenience of a one-stop weekly shop. However, the LSSR
measures introduced to control the spread of COVID-19 have helped accelerate the growth of e-
commerce in Indonesia. For breakfast cereals, it is expected more products will become
available online over the forecast period. This will be partially supported by the rise of third-party
grocery delivery services such as Happy Fresh, Sayur Box, and Tani Hub, which are constantly
expanding the range of products they offer on their platforms. On the other hand, some brands
are also expected to make their products available officially via online marketplace such as
Bukalapak, Shopee, and Tokopedia, following in the footsteps of leading players such as Nestlé.

Foodservice sales likely to be constrained by bleak economic forecast

Foodservice sales are expected to continue growing at a steady pace over the forecast
period. As consumers and students start to return to their normal routines this should see a
turnaround in fortunes, with street vendors in particular benefiting from this passing trade.
Nevertheless, growth is not expected to return to pre-COVID-19 levels in the short term. Most
consumers have seen their household income impacted by COVID-19 and as such will likely be
forced to curb their spending, including on foodservice.

CATEGORY DATA
Table 1 Sales of Breakfast Cereals by Category: Volume 2015-2020

'000 tonnes
2015 2016 2017 2018 2019 2020

Hot Cereals 2.8 2.9 3.0 3.1 3.3 3.5

RTE Cereals 6.8 7.5 8.0 8.3 8.6 9.0
- Children's Breakfast 4.2 4.6 4.9 5.2 5.4 5.7

© Euromonitor International
BREAKFAST CEREALS IN INDONESIA Passport 3

Cereals
- Family Breakfast 2.6 2.9 3.0 3.1 3.2 3.4
Cereals
-- Flakes 2.6 2.9 3.0 3.1 3.2 3.4
-- Muesli and Granola - - - - - -
-- Other RTE Cereals - - - - - -
Breakfast Cereals 9.6 10.4 11.0 11.4 11.9 12.5
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 2 Sales of Breakfast Cereals by Category: Value 2015-2020

IDR billion
2015 2016 2017 2018 2019 2020

Hot Cereals 137.7 150.9 161.4 171.1 186.0 204.6

RTE Cereals 823.8 961.9 1,036.5 1,088.5 1,150.4 1,220.6
- Children's Breakfast 565.2 665.2 719.0 758.4 802.4 850.0
Cereals
- Family Breakfast 258.6 296.7 317.5 330.2 348.0 370.6
Cereals
-- Flakes 258.6 296.7 317.5 330.2 348.0 370.6
-- Muesli and Granola - - - - - -
-- Other RTE Cereals - - - - - -
Breakfast Cereals 961.5 1,112.8 1,197.9 1,259.6 1,336.4 1,425.3
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 3 Sales of Breakfast Cereals by Category: % Volume Growth 2015-2020

% volume growth
2019/20 2015-20 CAGR 2015/20 Total

Hot Cereals 7.0 4.4 24.3

RTE Cereals 4.4 5.8 32.8
- Children's Breakfast Cereals 4.7 6.2 35.3
- Family Breakfast Cereals 4.0 5.2 28.8
-- Flakes 4.0 5.2 28.8
-- Muesli and Granola - - -
-- Other RTE Cereals - - -
Breakfast Cereals 5.1 5.4 30.3
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 4 Sales of Breakfast Cereals by Category: % Value Growth 2015-2020

% current value growth

2019/20 2015-20 CAGR 2015/20 Total

Hot Cereals 10.0 8.2 48.6

RTE Cereals 6.1 8.2 48.2
- Children's Breakfast Cereals 5.9 8.5 50.4
- Family Breakfast Cereals 6.5 7.5 43.3
-- Flakes 6.5 7.5 43.3
-- Muesli and Granola - - -

© Euromonitor International
BREAKFAST CEREALS IN INDONESIA Passport 4

-- Other RTE Cereals - - -

Breakfast Cereals 6.6 8.2 48.2
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 5 NBO Company Shares of Breakfast Cereals: % Value 2016-2020

% retail value rsp

Company 2016 2017 2018 2019 2020

Nestlé Indonesia PT 52.3 52.4 52.4 52.1 51.9

Simba Indosnack Makmur PT 20.1 20.2 20.3 20.3 20.2
PepsiCo Inc 10.8 10.8 10.9 11.2 11.6
Kellogg Co 5.0 5.0 4.9 4.8 4.8
Mayora Indah Tbk PT 0.7 0.7 0.7 0.7 0.7
ConAgra Brands Inc 0.2 0.2 0.2 0.2 0.2
Ralcorp Holdings Inc - - - - -
ConAgra Foods Inc - - - - -
Others 10.9 10.8 10.7 10.7 10.7
Total 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 6 LBN Brand Shares of Breakfast Cereals: % Value 2017-2020

% retail value rsp

Brand (GBO) Company (NBO) 2017 2018 2019 2020

Koko Krunch (Cereal Nestlé Indonesia PT 29.6 29.7 29.7 29.6

Partners Worldwide
SA)
Simba Simba Indosnack Makmur PT 20.2 20.3 20.3 20.2
Nestlé Cornflakes Nestlé Indonesia PT 16.6 16.5 16.3 16.3
(Cereal Partners
Worldwide SA)
Quaker Oats PepsiCo Inc 10.8 10.9 11.2 11.6
Milo (Cereal Nestlé Indonesia PT 5.6 5.6 5.6 5.5
Partners Worldwide
SA)
Kellogg's Corn Flakes Kellogg Co 2.6 2.6 2.5 2.5
Kellogg's Coco Pops Kellogg Co 1.2 1.2 1.1 1.1
Energen Mayora Indah Tbk PT 0.7 0.7 0.7 0.7
Kellogg's Krispies Kellogg Co 0.6 0.6 0.6 0.6
Kellogg's Frosties Kellogg Co 0.6 0.6 0.6 0.6
Honey Stars (Cereal Nestlé Indonesia PT 0.5 0.5 0.5 0.5
Partners Worldwide
SA)
Others Others 11.0 10.9 10.9 10.9
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 7 Distribution of Breakfast Cereals by Format: % Value 2015-2020

% retail value rsp

© Euromonitor International
BREAKFAST CEREALS IN INDONESIA Passport 5

2015 2016 2017 2018 2019 2020

Store-Based Retailing 99.9 99.9 99.9 99.9 99.8 99.7

- Grocery Retailers 99.9 99.9 99.9 99.9 99.8 99.7
-- Modern Grocery 96.6 96.7 96.6 96.8 96.7 96.9
Retailers
--- Convenience Stores 18.4 18.6 18.7 19.0 19.0 19.1
--- Discounters - - - - - -
--- Forecourt Retailers - - - - - -
--- Hypermarkets 37.0 37.0 36.9 37.0 37.1 37.1
--- Supermarkets 41.2 41.1 40.9 40.8 40.6 40.7
-- Traditional Grocery 3.4 3.3 3.4 3.1 3.1 2.8
Retailers
--- Food/drink/tobacco - - - - - -
specialists
--- Independent Small 3.4 3.3 3.4 3.1 3.1 2.8
Grocers
--- Other Grocery - - - - - -
Retailers
- Non-Grocery Specialists - - - - - -
-- Health and Beauty - - - - - -
Specialist Retailers
-- Other Foods Non- - - - - - -
Grocery Specialists
- Mixed Retailers - - - - - -
Non-Store Retailing 0.1 0.1 0.1 0.1 0.2 0.3
- Vending - - - - - -
- Homeshopping - - - - - -
- E-Commerce 0.1 0.1 0.1 0.1 0.2 0.3
- Direct Selling - - - - - -
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources

Table 8 Forecast Sales of Breakfast Cereals by Category: Volume 2020-2025

'000 tonnes
2020 2021 2022 2023 2024 2025

Hot Cereals 3.5 3.8 4.0 4.3 4.6 5.0

RTE Cereals 9.0 9.4 9.9 10.3 10.8 11.4
- Children's Breakfast 5.7 5.9 6.2 6.5 6.9 7.2
Cereals
- Family Breakfast 3.4 3.5 3.7 3.8 4.0 4.2
Cereals
-- Flakes 3.4 3.5 3.7 3.8 4.0 4.2
-- Muesli and Granola - - - - - -
-- Other RTE Cereals - - - - - -
Breakfast Cereals 12.5 13.2 13.9 14.7 15.5 16.4
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 9 Forecast Sales of Breakfast Cereals by Category: Value 2020-2025

IDR billion
2020 2021 2022 2023 2024 2025

© Euromonitor International
BREAKFAST CEREALS IN INDONESIA Passport 6

Hot Cereals 204.6 217.9 232.3 247.9 264.7 283.0

RTE Cereals 1,220.6 1,254.2 1,290.0 1,328.1 1,368.6 1,411.8
- Children's Breakfast 850.0 872.1 895.7 920.8 947.5 975.9
Cereals
- Family Breakfast 370.6 382.1 394.3 407.3 421.2 435.9
Cereals
-- Flakes 370.6 382.1 394.3 407.3 421.2 435.9
-- Muesli and Granola - - - - - -
-- Other RTE Cereals - - - - - -
Breakfast Cereals 1,425.3 1,472.2 1,522.3 1,576.0 1,633.4 1,694.8
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 10 Forecast Sales of Breakfast Cereals by Category: % Volume Growth 2020-2025

% volume growth
2020/21 2020-25 CAGR 2020/25 Total

Hot Cereals 7.1 7.3 42.2

RTE Cereals 4.5 4.7 26.1
- Children's Breakfast Cereals 4.8 5.0 27.6
- Family Breakfast Cereals 4.1 4.3 23.4
-- Flakes 4.1 4.3 23.4
-- Muesli and Granola - - -
-- Other RTE Cereals - - -
Breakfast Cereals 5.3 5.5 30.6
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 11 Forecast Sales of Breakfast Cereals by Category: % Value Growth 2020-2025

% constant value growth

2020/2021 2020-25 CAGR 2020/25 Total

Hot Cereals 6.5 6.7 38.3

RTE Cereals 2.8 3.0 15.7
- Children's Breakfast Cereals 2.6 2.8 14.8
- Family Breakfast Cereals 3.1 3.3 17.6
-- Flakes 3.1 3.3 17.6
-- Muesli and Granola - - -
-- Other RTE Cereals - - -
Breakfast Cereals 3.3 3.5 18.9
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

© Euromonitor International