Indonesia Cheese Market Outlook to 2030

Indonesia Cheese Market Overview

• The Indonesia cheese market, valued at USD 691.82 million, has grown steadily over the past five years. This growth is primarily driven by an increasing demand for western cuisines and the rising penetration of cheese-based products in the country's foodservice and retail sectors. Urbanization and the shift toward modern eating habits have led to a surge in cheese consumption, particularly in urban areas where middle-class consumers are more exposed to international cuisines. Additionally, Indonesia's growing dairy industry is fostering local production, which has bolstered market expansion.
• The cities of Jakarta, Bali, and Surabaya dominate the cheese market in Indonesia due to their higher levels of income, urbanization, and vibrant foodservice industries. Jakarta, being the nation's capital, leads the way with the highest concentration of restaurants, cafes, and modern retail stores, all of which significantly contribute to cheese sales. Bali, with its robust tourism industry, also sees high demand for cheese as international tourists seek familiar dairy-based food options. Meanwhile, Surabaya, Indonesia's second-largest city, has seen a surge in demand due to the expansion of modern retail channels and increasing awareness about western food habits.
• In August 2023, production of the first ever locally-produced organic cheese was celebrated in Indonesia as a result of an international dairy development project. The project, bringing together Danish agricultural expertise with local Indonesian partners, aims to improve the Indonesian dairy sector and showcase the opportunities within organic dairy farming.

Indonesia Cheese Market Segmentation

By Cheese Type: Indonesia's cheese market is segmented by cheese type into natural cheese, processed cheese, flavored cheese, organic cheese, and vegan cheese. Processed cheese held the dominant market share. This is primarily due to its versatility and long shelf life, making it a popular choice among consumers and foodservice operators alike. Processed cheese is widely used in fast food, snacks, and ready-to-eat meals, which have gained popularity as the urban lifestyle becomes more fast-paced. The availability of affordable processed cheese brands and its incorporation into traditional Indonesian dishes further fuel its growth.

By Distribution Channel: The cheese market in Indonesia is also segmented by distribution channel into supermarkets/hypermarkets, specialty stores, online retail, and traditional retail. Supermarkets and hypermarkets hold the largest market share in the market. This dominance can be attributed to their widespread presence in urban areas and their ability to offer a wide variety of cheese products, catering to both local and international tastes. Additionally, the modern retail format provides better refrigeration facilities, ensuring product freshness, which is crucial for dairy items like cheese. The growing trend of modern shopping experiences and promotional activities by large retail chains also contribute to the popularity of this distribution channel.

Indonesia Cheese Market Competitive Landscape

The Indonesia cheese market is characterized by both domestic and international players. A few major players have a stronghold due to their established distribution networks, product innovation, and brand recognition. The competitive landscape in Indonesia's cheese market is led by large global players such as Kraft Heinz and FrieslandCampina, alongside local companies like PT Mulia Boga Raya Tbk, which has capitalized on its local production and distribution channels.

Indonesia Cheese Market Analysis

Growth Drivers

• Rising Western Food Preferences (Cheese Consumption Patterns): Indonesia's cheese consumption is growing due to the increasing popularity of Western food, particularly in urban areas. With over 18,000 foreign restaurants operating in the country, demand for cheese in fast food and casual dining has surged. Cities like Jakarta and Bali are seeing higher consumption of cheese in pizzas, burgers, and snacks, driven by urban middle-class consumers, currently numbering 60 million. The rising trend in Western food preferences is expanding cheese consumption across the country.
• Increasing Disposable Income (Per Capita Income): Indonesias per capita income reached USD 4,580 in 2023, significantly increasing consumer purchasing power. This rise in income is enabling more middle-class households to afford premium dairy products like cheese. With household incomes rising by an average of 2.5% annually and GDP growth at 5.0%, cheese consumption in urban areas has increased as consumers shift towards higher-quality, Western-style foods. The growing spending power in cities is a critical factor driving the cheese market forward.
• Expanding Food Service Industry (Restaurants & Cafes): Indonesias food service industry is booming, with about 70,000 restaurants and cafes operating in 2024. This rapid growth, particularly in quick-service restaurants and casual dining chains, has led to increased demand for cheese-based dishes. Tourism, with 17 million international tourists in 2023, and a dining-out culture among millennials are further boosting the need for cheese varieties like mozzarella, parmesan, and cream cheese. Cheese is now a key ingredient in both international and local menus.

Market Challenges

• Limited Cold Chain Infrastructure: Indonesia faces a shortage of cold chain infrastructure, with only about 30% of logistics equipped for refrigeration. This lack of cold storage limits the distribution of cheese, especially in rural areas, where spoilage and quality degradation are significant issues. Major cities like Jakarta and Surabaya have better cold storage facilities, but the insufficient infrastructure remains a challenge for nationwide cheese distribution, slowing market expansion.
• High Import Dependency (Import vs. Domestic Production): Indonesia imports over 80% of its cheese, primarily from New Zealand, Australia, and the United States, with total cheese imports at 75,000 metric tons in 2023. This heavy reliance on imports makes the market vulnerable to global price fluctuations and trade restrictions. Although domestic cheese production is growing, it still only covers less than 20% of national demand, leaving Indonesia dependent on imports and exposed to international market conditions.

Indonesia Cheese Market Future Outlook

The Indonesia cheese market is expected to experience substantial growth over the next five years, driven by increasing urbanization, the rise of the middle class, and the growing demand for western-style food products. The country's expanding foodservice sector, particularly fast food and casual dining, is also expected to fuel the demand for processed and flavored cheese. Additionally, consumer awareness regarding the nutritional benefits of cheese and its protein content is likely to boost consumption across various demographics.

Market Opportunities

• Growth in Cheese-based Products (Innovation in Cheese Products): There is increasing demand for innovative cheese products such as cheese-flavored snacks, cheese spreads, and fusion dishes. This trend is especially strong among Indonesias youth, with 67 million people under the age of 35 driving interest in modern food products. Cheese is being incorporated into local street foods, pastries, and snacks, offering significant growth potential as manufacturers introduce new cheese-infused products tailored to Indonesian tastes.
• Growing Modern Retail Formats (Cheese Availability in Supermarkets): The growth of modern retail formats, including supermarkets and hypermarkets, is improving cheese accessibility. With over 4,500 supermarkets operating across the country in 2024, cheese products are more readily available in urban areas. Retail chains like Carrefour and Hypermart are stocking a variety of cheeses, from imported to locally produced options, while e-commerce is extending cheese availability to more remote regions. This expanding retail network supports the increased consumption of cheese.