Indonesia as the largest food markets in Asia Pacific with a total market value of USD194.4 billion in 2020. As the country’s burgeoning food service market is expecting to see a 7.06% growth between 2021 and 2026. Therefore, a part of this growth is the archipelago’s rising bakery industry, driving to a shift in national diet, growing disposable income, and developing online food delivery services.
Bakery products is rising in Southeast Asia with a market value of USD13.5 billion in 2020. Regionally, the market is expecting to grow by 7.67% by 2026. The global cake market specifically is also looking at a positive forecast with a growth of 3.5% globally. In result, artisanal cake in particular is seeing a boom replacing branded cake products.
Baked Goods Has Become the Food of the People
The same goes for Indonesia, where bread and cakes consumption rose by around 60% between 2016 and 2019. Interestingly, there is a shift in consumers’ perception in the country where baked goods were previously seen as premium products. Mini Markets have seen sharp increases in bread sales every year, marking the adoption of bread consumption by the masses. Retail giant Indomaret records a 25-30% increase in bread sales annually.
Furthermore, a diverse group of players makes up the country’s growing food service market from high-end hotels, bakeries, street-side restaurants, and home industries. Today, industrial bakeries only produce 19% of the country’s baked goods supply. In a word, that over two-thirds production of baked goods by SMEs and further 11% come from small boutique bakeries.
The growing artisan bakery sector is evident as it assumes 49% of the total bakery market share. As a result, artisan bakery is a promising investment in the country. Rising Indonesian artisan bakery BEAU recently received funding from SEAF, turning a new page for the country’s bakery industry.
Boosted by Growing Online Food Delivery
Growing online food delivery sector plays a big part in the rise of home bakery. Therefore, easy delivery makes it easier for artisan bakers to deliver higher quality and more variety of offerings to the market. In 2020, the revenue in the Online Food Delivery segment reached USD1.14 billion with forecasted annual growth of 9.33% until 2026.
The Indonesian baked goods market remains wide open for experimentation in terms of flavours. Consumers are looking for unique offerings, from the fulfillment of halal requirements to authentic flavours that are uniquely Indonesian. It is clear that the baked goods industry in Indonesia will only continue to grow moving forward. As more players, big and small, enter the market, there is a bright future for this growing sector.
