Investment Opportunity on The F&B Industry Surabaya

Surabaya, the second-largest city in Indonesia, is rapidly emerging as a hub for the food and beverage (F&B) industry. With a population of over 3 million and a strategic location that connects East Java to the rest of Indonesia and the world, Surabaya offers a wealth of opportunities for F&B investors. 

From its rich culinary heritage to its vibrant food scene, Surabaya is a city teeming with potential for those looking to invest in the food and beverage (F&B) industry. This article will examine why Surabaya is an ideal destination for F&B investment, highlighting its diverse culinary offerings, favorable investment climate, and expanding consumer market. 

Why Choose Surabaya for F&B Investment?

Surabaya has achieved the second-largest investment realization among all cities and districts in Indonesia, totaling around IDR 29.22 trillion. The Ministry of Investment and the Indonesia Investment Coordinating Board (BKPM) awarded the city for this achievement, with 90% of the investment coming from domestic sources. 

The award was given to the Mayor of Surabaya, Eri Cahyadi, who expressed his gratitude for the achievement and stated that the investment would help to create jobs and reduce unemployment and poverty in Surabaya. 

The investment is expected to stimulate economic growth and support local small and medium-sized enterprises (UMKM).

Read more: The Growing Potential of Property Investment in Surabaya

Opening F&B Business in Surabaya

Opening an F&B business in Surabaya requires careful consideration and planning. 

Entrepreneurs must navigate various legal and regulatory requirements, such as obtaining business and restaurant licenses, securing a suitable location, and complying with tax obligations. 

Additionally, they must keep up with the latest trends in Surabaya’s food and beverage industry, prioritizing healthy and sustainable food choices, utilizing local ingredients, and leveraging technology to enhance the customer experience. 

With the right strategies in place and a commitment to delivering exceptional quality and service, opening an F&B business in Surabaya can be rewarding.

The Rising Trend on F&B Industry in Surabaya

Surabaya has seen a rapid rise in the F&B industry and continues to welcome such growth. For example, the national electronic commerce company Blibli has partnered with the Indonesian Cafe and Restaurant Entrepreneurs Association (Apkrindo) in East Java to support the growth of cafes and restaurants in Surabaya. 

According to Apkrindo’s data, this collaboration is based on the food and beverage industry’s annual growth of 20% in Surabaya. Blibli aims to strengthen its integrated omnichannel commerce ecosystem by adding the best cafes and restaurants, offering attractive deals for Surabaya customers. 

This collaboration is also part of Blibli’s strategy to increase local sellers in Surabaya. The company aims to add more than 250 food and beverage options, guaranteed to be satisfying, affordable, and easily accessible for customers in Surabaya. 

With this collaboration, Apkrindo aims to support local F&B businesses following the official lifting of PPKM. The partnership also offers a unique opportunity for customers to enjoy the best culinary experiences at the best prices, with discounts and rewards.

The Growing Number of Foreign Investors in Surabaya

Reports have shown a growing interest in foreign investors in Surabaya. Several countries, including Singapore, the Netherlands, China, Japan, and Malaysia, have invested in Surabaya, with Singapore leading the way with an investment value of IDR 1.311 trillion. 

Surabaya’s economic growth has also increased, with a 7.17% growth rate in the third quarter of 2022, higher than the 5.58% growth rate of the entire East Java province during the same period. 

Surabaya’s potential for economic growth is attracting the attention of foreign investors, which could further enhance its economic development in the future.

Major F&B Sectors in Surabaya: The Latest Trends

Many food and beverage businesses in Jawa Timur are gearing up for the upcoming Ramadan and Lebaran seasons in 2023 and are devising strategies to optimize their revenue. 

Moreover, several food and beverage establishments are reopening after enduring the pandemic’s impact, with some even inaugurating new branches during the early part of the year.

One of the growing trends in Surabaya’s food and beverage industry is the emergence of bars and lounges, which offer a different dining experience. 

These establishments aim to provide a relaxed and comfortable atmosphere where patrons can unwind, enjoy music, and indulge in delectable drinks and finger foods. 

The rising popularity of these bars and lounges is evident in the increasing number of establishments in Surabaya catering to a diverse clientele.

Another noteworthy trend in Surabaya’s food and beverage industry is the use of locally sourced ingredients and the promotion of traditional Indonesian cuisine. 

Many restaurants are showcasing the diversity of Indonesian cuisine by offering dishes that feature ingredients native to the region, which adds an authentic touch to the dining experience.

Furthermore, as businesses seek to maximize their earnings during crucial holiday periods like Ramadan and Lebaran, they turn to consultants for assistance in improving their tax management and implementing effective revenue optimization strategies. 

By doing so, they hope to attract more customers and enhance their profitability.

How to Start F&B Business in Surabaya

1. Forming a Company

When forming a company, it is essential to determine the type of legal entity that the company will be. 

One possible course of action is establishing a domestic Limited Liability Company (“Local PT”) wholly owned by local entities. However, the appointment of foreign directors is permissible for managing the company’s operations.

Another type of company is a foreign investment company (“PT PMA”). It includes foreign ownership; some business fields are even permitted to have complete foreign ownership. 

Registering a PT PMA enables businesses to receive investment opportunities from foreign entities that are otherwise limited in registering a Local PT.

2. License and Certification

To start a restaurant business in Indonesia, obtaining the necessary licenses and certifications in compliance with the country’s regulations is essential. These include a business license to validate the commercial activities of the restaurant.

A restaurant license issued by the Ministry of Culture and Tourism, a working visa for foreign individuals who will work in the restaurant, an alcoholic beverage trading license to regulate the sale of alcohol, and permits from recording labels to play music without infringing copyright laws. It’s worth noting that even food trucks must obtain a restaurant license to operate within the bounds of the law.

Why You Should Register Your Business?

By obtaining these licenses and certifications, restaurant owners can ensure that their business complies with the law and avoid any legal issues in the future. In summary, Surabaya, like Jakarta, is undergoing rapid evolution.

The sector that has been of particular interest to investors is the food and beverage sector. 
However, to set up such an enterprise, several key considerations must be taken into account, including the business’s form and licensing requirements. InCorp Indonesia (An Ascentium Company) provides company registration services for those looking to exploit such an opportunity.