Retail volume sales of hot drinks in Indonesia saw healthy growth in 2023, in contrast to the decline seen in the previous year. This was attributable to a gradual improvement in consumer purchasing power, thanks to better economic conditions, including a decline in the core rate of inflation, as well as an increase in the number of family gatherings, especially during key homecoming periods, such as Eid al-Fitr.
Coffee experienced a turnaround to become the key driver of growth in retail volume terms in 2023 following a decline in the previous year. This was due mainly to improving economic conditions and the gradual restoration of consumer confidence.
Santos Jaya Abadi PT remained the largest player in hot drinks in retail value terms, followed by Mayora Indah Tbk and Nestlé Indonesia. These players continue to benefit from extensive distribution networks in Indonesia, with their products widely available across a variety of both traditional and modern retail channels.
Small local grocers and convenience stores remained the go-to channels for hot drinks in 2023. The convenience store channel, in particular, was notable for expanding its share of retail value sales during the review period, thanks to its ever-widening range of outlets located close to consumers’ homes, schools and offices, and broad variety of competitively priced products.
Retail continued to account for an unusually high proportion of total hot drinks volume sales. While foodservice outlets experienced stronger growth compared to off-trade channel in 2023, thanks to the increased mobility of Indonesian consumers after the pandemic, demand is not expected to exceed pre-COVID-19 levels until 2026.
After successfully recovered to pre-pandemic levels in 2023, volume sales of hot drinks are expected to continue to grow positively over the forecast period, albeit at a steadily decreasing rate. This will be mainly due to the growing maturity of the Indonesian coffee market, as consumption becomes an integral part of everyday lifestyles.
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Hot Drinks
This report originates from Passport, our Hot Drinks research and analysis database.
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