Oct. 11 - Coffee consumption in Indonesia is projected to expand at a compound annual growth rate of 4.1% over the next four years, more than double the 1.8% compounded growth rate over the past six years, according to a recent study by global market research company Euromonitor International.
Factors such as strong economic growth, an increasingly urban and wealthy consumer base and wider product ranges are likely to boost consumption in the world's fourth most populous nation, with nearly 250 million people, said the report.
Indonesia's domestic coffee consumption is expected to reach around 150,000 metric tons this calendar year. The country is Asia's second largest producer of robusta coffee, with an expected output of around 380,000 tons in the 2006-07 crop year ended Sept. 30.
The retail value of coffee products in Indonesia is expected to surge 31% to reach around $310 million in 2011, from an estimated market value of $237 million this year.
"This increased growth in value is expected to come from improved volume growth rather than price increases," said the study.
This is because intense competition among coffee market participants is likely to cap any price increases below the inflation level, according to Euromonitor.
"Coffee companies will play an important role in boosting consumption over the forecast period through promotional and marketing activities," said the report.
"In 2006, a flurry of new instant coffee launches by leading companies such as Nestle and Santos helped stimulate demand for instant coffee, especially among younger consumer groups."
Indonesia's projected coffee consumption growth rate over the next four years just exceeds the projected Asia Pacific growth rate of 4% per annum, and is above the global compound annual growth rate of 1.7% until 2011.