W.IPG.2103 - Fresh Beef Market Drivers

Summary

Indonesia had a population of 265 million people in 2018. The high population in Indonesia and the increasing economic capacity of the Indonesian people have made the level of meat consumption in Indonesia increase. The growth of demand for beef in Indonesia is quite promising, with a positive growth of around 2% CAGR ('16 - '20). However, the increase in beef consumption is not in line with the availability of local beef production. The source of local beef is still far from self-sufficient for national beef consumption, which is only fulfilled around 61%.

The largest beef market contribution in the distribution chain is the wet market. It is almost two times compared to modern trade in Indonesia, primarily from household consumption and SMEs. Player and Distributor sell beef and IBM, where IBM is almost 30% - 40%, penetrating the wet market with lower price considerations than beef. Even though a viable cold chain did not support the wet market, IBM's demand was still very high. From the consumer side, Jakarta, with the largest market in Indonesia, tends to buy beef at the wet market and seek fresh beef (hot carcass / hot meat is considered fresh meat), in contrast to Medan, which looks for fresh meat in the modern trade distribution chain. Despite these considerations, the main driver remains price.