Health Awareness Amongst Indonesian Consumers
As we move into the third wave of the global pandemic, consumers in Indonesia have started transitioning to a more ‘health and hygiene’ centric lifestyle. Mainly due to the pandemic, hygiene and health-related activities are evident by the drastic increase in handwashing, water consumption, eating fruits and vegetables, and vitamin consumption.
A key focus of consumers across Southeast Asia is improving their health and fitness through diet and exercise. One report from PwC shows that after the Covid-19 outbreak, the highest spending increase of Indonesian consumers is in health products, with a spike of over 77%.
Another report by Mondelez even says that 92% of Indonesians rank health as an essential factor when choosing snacks. As most Indonesians use snacks to connect with others, the expectation of snacks in the next five years is for it to be more convenient and more suited to their on-the-go lifestyle due to their increasing mobility.
Looking at preferences for future snacks, which are primarily emotional and mental well-being, there is ample room for healthy yet indulgent snacks that foreign investors can provide.
How The Covid-19 Pandemic Pushed Indonesian Consumer Towards Organic and Healthier Products
Deloitte observes that amidst the economic uncertainty resulting from the pandemic, consumers are now seen to act more judiciously regarding purchasing decisions. A survey indicated that 83% of the respondents have stopped making impulsive purchases. The most overwhelming consideration of this continues to be price, then followed by quality.
An interesting take from the survey is the overall shift that is seen from consumers when considering food category purchases. Taste, healthiness, and nutritional value come right after price, showing the deliberate health-conscious adjustments that consumers have made due to the pandemic. Combine this with lifestyle changes such as working from home, allowing consumers to control their diet. Another trend is the decrease in planned expenditures for canned foods, which points to an increase in health-conscious behaviors amongst Indonesians.
For consumers earning a higher income specifically, even more emphasis is placed on contactless delivery and health & wellness, among others. This preference reflects the focus on convenience, safety, and assurance rather than a more monetary-oriented focus.
Organic Certification Indonesia: Understanding General Requirements
All over the world, organic products have sustained an ever-increasing hype due to their nutritional value and promotion of more humane & natural practices. In Indonesia, before a product can be sold to the public with the label ‘organic,’ it must first obtain an Organic Certificate before even the distribution license.
The Definition of Organic Products
The term ‘organic’ may be used for any product such as clothing and personal care products; however, it is mostly used for food products. In layman’s terms, organic products are produced without using any man-made/synthetic chemicals that go through the standard organic processes using organic agriculture. In Indonesia, there are several accredited Organic Certification centers like CERES, BIOCert, and ICERT, among others, who can provide an Organic logo to be put on products to sell within the country.
Organic Food Products
The most famous use of organic agriculture is to produce organic food products. There are different regulations from different countries to produce organic food products. Some common ones include the use of non-human-made fertilizers, naturally controlled herbicides, humane living conditions, and a healthy diet for livestock.
How to Obtain Organic Certificate for Food Product in Indonesia
For foreign investors to obtain organic certification from the country, several rigorous steps must take place before a distributor can even get a business license.
The certification process follows these steps:
An application form and company documentation are needed, including all required legal documents. This process could take up to 6 months, and it is essential to ensure all sorts of documents are valid much longer than that time frame. It is also required for the company to provide proof of Organic Agricultural processes before applying.
2. Review and Verification
The required parties will review all documents to ensure that everything is set in place. Any companies that have been declined a certification before must show supporting documents on why they did not receive a certificate. During this process is when an inspection can be planned.
3. Field Inspection
After all documents have been submitted and reviewed, the certification center will recommend a document verification process and set up a field inspection to ensure that all standards are met. This includes conformity and ability of the company looking to get verified and compliance to technical regulations. This is then followed by an interview.
4. Technical Review
The final step before issuing an Organic Certificate is a technical review by the certification center, which includes an interview with the company and operators of the business. All the information from the process will then be compiled to form a report on whether the business is liable for an Organic Certificate and can use the Organic Logo. The center will have to issue a certificate complete with the business details such as name, activities, license number, etc. This will be available to use for three years.
With local farmers not being able to meet the high demand for organic products in Indonesia, especially in the food industry, there is potential for foreign investors to take advantage of this opportunity. By setting up a representative office and importing products to Indonesia, foreign investors can further supply the increasing demand for this apparent need.