Yuyuh Sukmana, regional manager – South-East Asia for Vanguard International joined several produce industry professionals for a look at Indonesia’s road to recovery. Below is a look at that article from Liam O’Callaghan, which you can also view online in full at Asiafruit Magazine.
Through the first half of 2022, Indonesian fresh fruit imports surpassed pre-Covid levels, a sign the market is well on its way to recovery.
Although the trade is still managing the effects of the pandemic – with some suppliers and categories facing ongoing challenges – there is an overall sense that the market is on track to meet its potential as one of Asia’s most exciting opportunities for growth.
In the first five months of 2022, Indonesia imported 276,667 tonnes of fruit, a 70 per cent increase on the same period in 2020 (the first year of the pandemic) and a 32 per cent increase from pre-pandemic levels (2019).
The recovery has been led by a jump in apple and citrus exports, driven by increased supply from China. China accounts for around 80 per cent of Indonesia’s apple imports and 60 per cent of citrus imports. Other suppliers have maintained or reduced supply.
Other notable trends include the decline in table grape imports from Australia, dropping from 21,184 tonnes to 16,849 tonnes in 2022 following a poor season. China and Peru increased their volumes by around 2,000 tonnes and 1,000 tonnes respectively.
Stonefruit imports also struggled. Plum imports totalled 292 tonnes in 2022, down from 1,157 tonnes in 2019.
Smaller, high-value categories such as cherries and berries are making progress from small bases.
NOT QUITE NORMAL
Indonesian importers are finding the road to normal is not smooth, even though the country’s travel restrictions and Covid regulations have relaxed.
Ricky Liong of Indonesian importer Laris Manis Utama (LMU) says consumers are making the most of their new-found freedom, which isn’t necessarily a positive for the fruit market.
“Things are back to normal again in 2022. Most people are spending a lot of money on vacations in 2022 especially during the long holiday from May until July. So buying power for imported fresh fruits was very slow at that time,” explains Liong.
Yuyuh Sukmana, regional manager – South-East Asia for Vanguard International, expresses the same sentiment, noting inflation is also contributing to the reduction in demand. He says ongoing logistical constraints are also affecting the ability of exporters to supply the market.
“We all know timing is crucial in the fresh fruit business as demonstrated during Ramadan this year. Many shipments scheduled to arrive before or during Ramadan arrived after the Eid Al-Fitr festival when the market had slowed down,” says Sukmana.
“Ramadan this year resulted in the lowest holiday sales in the last ten years, which typically is Indonesia’s strongest selling period of the year.”
ROOM FOR GROWTH
Despite the difficulties of an evolving post-peak pandemic environment, there is still optimism about the long-term prospects of the Indonesian fruit import market.
“The import fruit market will return to or surpass pre-Covid levels provided importers can get the right quality fruits at the right time,” says Sukmana. “This year, supply chain disruptions have been one of the greatest challenges we have ever experienced. If the supply chain clears, we should see the expected market recovery and hopefully quickly.”
He says consumers have become more health conscious since the onset of the pandemic, which will drive continued demand for fresh and healthy products.
Varietal innovation also has the potential to drive the growth of the imported fruit market but Sukmana says suppliers will be reliant on the necessary import permits.
“Categories that have the potential to grow, in terms of dollar value, will very much depend on market demand vs permits (quota) availability during the season,” notes Sukmana. “In terms of volume growth, produce such as mandarins and grapes have better opportunities, due to the extension of China’s mandarin season and more seedless varieties of grapes being introduced to consumers.”
Liong believes there is room for growth at both ends of the market with consumers always eager for a bargain.
“Products like longan from Thailand and grapes from China have high potential to grow in volume because these products are suitable for the Indonesian market and are value for money,” he notes.
In a welcome change for exporters trying to introduce their products to new consumers, the relaxation of Covid-19 restrictions has allowed the return of in-store sampling, albeit in a different form. Mulia Raya’s head of division (savoury and seasoning) and fruit sourcing specialist Bella Lie says individual samples are being cut and sealed in containers.
“We believe that Indonesian shoppers still love the traditional sampling and one-on-one sales. Online promotions and advertisements are very important too. It’s about balance between above the line and below the line marketing,” says Lie. In the online space, Sukmana says some of the buying behaviour that took hold during the pandemic looks set to continue.
“Online purchasing will keep growing with more players involved in the market,” says Sukmana. “Community group buying via social media, mainly WhatsApp and Instagram, is another trend that emerged during the pandemic that is likely to endure.”