Indonesia’s bakery industry is expected to witness unparalleled growth in the next few years as middle-class professionals embrace a more Western, urban lifestyle

BAKERIES FLOURISH AS MIDDLE CLASSES ADOPT NEW LIFESTYLE

Nurfika Osman, The Jakarta Post, Jakarta | Business | Mon, July 01 2013, 11:57 AM

Indonesia’s bakery industry is expected to witness unparalleled growth in the next few years as middle-class professionals embrace a more Western, urban lifestyle.

Young professionals are gradually changing their eating habits by including in their menus wheat-based products, such as bread, croissants, donuts, brioches, pies, quiches, muffins and cupcakes.According to Indonesian Bakery Association (APEBI) chairman Chris Hardijaya, the increased consumption of freshly baked products was apparent not only by the higher demand for wheat flour in the country but also by the arrival of new players in the business during the past five years.

“Both new local and international players are trying to benefit from this promising business, as middle-class consumers are eating more [bakery] products. Each year, new [bakeries] open in the country, particularly in shopping malls and department stores in major cities,” Chris told The Jakarta Post, adding that the sales of bread and pastries had risen by 12 percent to Rp 30 trillion (US$3.03 billion) in 2012.

Pane Del Giorno, BreadLife, Parish Cake and Le Soho are among new domestic bakeries offering a variety of products. These outlets, which are also known as fashion bakeries, are currently strengthening their footholds in the industry.

In the international segment, brands like Tous Les Jours, BreadTalk, Roppan, Chewy Junior and Beard Papa are also expanding their operations in the country.

Chris said Indonesia expected to see between 12 to 15 percent growth in bakery sales by the end of 2013, despite the fuel-price increase, because fashion bakeries had become a new trend and were gaining popularity among the masses.

Contacted separately, Pane Del Giorno CEO Mozes Latuihamallo said the firm, which launched operations in 2010, aimed to operate 60 stores by the end of this year due to increasing customer demand.

“On average, demand is rising by some 7 percent annually across every store. Most of the demand comes from our women customers who love eating sweet breads and other pastries,” he told the Post.

Mozes said the firm was focusing its expansion on Greater Jakarta, particularly Bogor, Bekasi and BSD City.

Currently, Pane Del Giorno — an Italian phrase meaning “bread of the day” — runs 22 outlets in strategic office buildings and residential areas in the capital city.

Regarding demand, Mozes said he was optimistic the firm’s business would grow by 12 to 14 percent
annually in the near future.

In addition, BreadTalk Indonesia, a boutique, franchise bakery from Singapore, recently opened several new stores in the eastern half of Indonesia due to the high market potential in the region.

BreadTalk Indonesia’s public relations manager, Mellyana Dewi, said the company had recently launched outlets in Ambon, Maluku; Gorontalo, northern Sulawesi, and Jayapura, Papua. “It is in line with our mission to get closer to our customers across the nation,” she said.

Another franchise that wants to capture part of this flourishing business in Indonesia is South Korean Tous Les Jours, a French-concept, sophisticated bakery that also sells beverages.

Tous Les Jours’ store manager at Senayan City shopping mall in Central Jakarta, Indra Permana, said since the outlet opened in December 2011, the response from customers had been positive.

He added that the store offered monthly special products, such as mango mousse, mini cashew pies and choco soft rolls.

Besides Senayan City, Tous Les Jours have several outlets in major malls and department stores across Jakarta including Kota Kasablanka, Gandaria City, Pondok Indah Mall, Central Park and Mal Kelapa Gading.

Moreover, the huge potential of the bakery industry in the country can be seen from the size of bakery-related exhibitions, which are growing larger from year to year.

According to Indonesian Exhibition Companies Association (Asperapi) chairman Effi Setiabudi, the Food Ingredients Indonesia and Bakery Indonesia Expo used more space at the Jakarta International Expo, Kemayoran, every year, plus the number of exhibitors and visitors kept increasing.