Rising Demand for Sustainability in Indonesian Food and Beverage Market: Opportunities and Challenges

Sustainability and environmental concerns are becoming increasingly popular among food and beverage consumers. In Indonesia, these concerns are becoming more pressing for consumers, with sustainability now taking precedence over other factors when making purchasing decisions. According to Food Ingredients Asia, a major food and beverage platform in the ASEAN region, in the last two years, when choosing foods and beverages, consumers increasingly place value on sustainability claims, even as they prioritize immediate product attributes like taste, convenience, price, and health benefits. As a result, according to a survey conducted by FMCG Gurus, a market research company specialising in consumer research, idea generation, and product development, 63% of consumers are concerned about deforestation, 62% are concerned about food waste, and 58% are concerned about the ethical treatment of farmers.

Figure 1:Indonesian Consumer Concerns

Customers are beginning to believe that environmental harm is irreversible, which will affect their own and future generations' quality of life. Consequently, customers expect brands to be more proactive when it comes to their sustainability commitments, particularly regarding matters like recycling. Additionally, they want brands to be more open about their environmental commitments, something that previous instances of greenwashing have contributed to. Growing awareness among consumers about how environmental degradation may affect both their quality of life and the lives of future generations has led to the expectation that companies and individuals will jointly act to safeguard the environment. A sizable majority (80%) look into the environmental pledges made by manufacturers and brands, and nearly half (49%) think that manufacturers of food, beverages, and supplements ought to be doing more to protect the environment. Similarly, 48% support retailers' increased efforts to protect the environment. According to FMCG Gurus, 24% of consumers do not trust the environmental claims made by food brands.

Figure 2:Proportion of Consumers Who Say They do not Trust Environmental Claims Made by the Following Types of Brands

Nevertheless, consumers are aware that safeguarding the environment is a team effort that includes each individual as well as large corporations. As a result, customers are seeking to alter their diets and way of life in order to act in a more ecologically friendly way. This has led to consumers learning more about environmental issues and taking action, like cutting back on water use and not wasting food. Additionally, they are changing their diets, aiming to switch to plant-based diets and exclusively using produce that grows locally. Though consumers acknowledge that they sometimes find it difficult to live a more sustainable lifestyle, this begs the question of how long-lasting these behaviors will be.

Food and beverage suppliers hoping to enter the Indonesian market should prioritize ecologically friendly operations due to the growing awareness and concern for environmental sustainability among Indonesian consumers. This involves making certain that their products are made sustainably, with an emphasis on reducing the negative effects of production on the environment at every stage of the process.

Attracting Indonesian customers also requires appealing packaging, since eco-friendly packaging has a big impact on what people decide to buy. Customers in Indonesia are likely to respond favorably to packaging that makes sustainability initiatives and ecologically friendly features obvious. Moreover, companies that manufacture sustainable goods, like plant-based foods or upcycled foods, stand to gain a lot from Indonesia's growing market for these goods. Suppliers may effectively tap into this expanding market sector and build a strong presence in Indonesia by providing new and sustainable food solutions that meet the demands of environmentally concerned consumers.

In conclusion, suppliers face both possibilities and problems as a result of the growing demand for sustainability in the Indonesian food and beverage business. Brands have a strong incentive to pursue sustainability initiatives, from production methods to packaging, since environmental issues are currently at the top of customer considerations. However, since customers are growing more skeptical of greenwashing techniques, this transition towards sustainability also necessitates a sincere commitment from brands. Suppliers can survive in the market and help create a more ecologically conscious food and beverage sector by adopting sustainable practices and satisfying the changing needs of Indonesian customers.