Indonesia Chocolate Market Outlook to 2030

Indonesia Chocolate Market Overview

• Indonesia Chocolate Market, valued at USD 850 million, is driven by increasing consumer demand for indulgent confectionery products and rising disposable incomes across urban areas. A five-year historical analysis indicates that the consumption of chocolate has been fueled by the growing middle class, urbanization, and the expansion of retail channels. Consumers are also becoming more inclined towards premium and artisanal chocolate varieties, which are enhancing the overall market value. Additionally, the growing preference for chocolate as a gift during festive occasions is propelling market demand.

• Key cities that dominate the Indonesian chocolate market include Jakarta, Surabaya, and Bandung. Jakartas dominance stems from its large population, affluent consumer base, and high concentration of modern retail outlets such as supermarkets and hypermarkets. Meanwhile, Surabaya and Bandung are strong players due to their rapidly expanding retail infrastructures and growing middle-class populations. These cities contribute significantly to the market's growth by driving sales in both mass-market and premium chocolate segments.
• Indonesia imposes import tariffs on cocoa products ranging from 5% to 10%, depending on the type of product. These tariffs are part of the governments strategy to protect the local cocoa industry and encourage domestic production. However, the reliance on imported cocoa beans has made these tariffs a double-edged sword for chocolate manufacturers, who face higher production costs. In 2024, Indonesia imported over 40,000 metric tons of cocoa, indicating the ongoing challenge for domestic producers.

Indonesia Chocolate Market Segmentation

By Product Type: The Indonesia chocolate market is segmented by product type into milk chocolate, dark chocolate, white chocolate, compound chocolate, and cocoa powder. Recently, milk chocolate holds the dominant market share in Indonesia under the product type segmentation, as it is widely popular among a diverse demographic. Its sweeter flavor appeals to a broad spectrum of consumers, especially children and young adults, who prefer its taste over the bitterness of dark chocolate.

By Distribution Channel: Indonesia's chocolate market is also segmented by distribution channels into supermarkets & hypermarkets, convenience stores, online retail, and specialty stores. Supermarkets and hypermarkets dominate this segment due to the wide availability and variety of chocolate products offered, making them a one-stop-shop for consumers. Retail giants like Indomaret and Alfamart provide consumers with easy access to international and local chocolate brands, contributing to the higher market share of this segment.

Indonesia Chocolate Market Competitive Landscape

The Indonesia chocolate market is dominated by a combination of local and international players, with a few major companies holding substantial influence. Local brands such as PT Mayora Indah Tbk and PT Kaldu Sari Nabati have made significant inroads, leveraging their local distribution networks and brand loyalty. Meanwhile, global players like Mondelez and Ferrero benefit from strong brand recognition and the appeal of premium products.

Indonesia Chocolate Market Analysis

Growth Drivers

• Increasing Disposable Income: In 2024, Indonesias per capita income stands at USD 5,218 according to the World Bank, reflecting a steady rise from USD 4,941 in 2023. This increase in disposable income enables consumers to allocate more resources towards non-essential goods like chocolate. The purchasing power of the middle class has been growing due to wage growth, supporting the trend of higher chocolate consumption.
• Urbanization and Lifestyle Changes: Urbanization in Indonesia has reached 58% of the total population in 2024, significantly impacting lifestyle choices. As more Indonesians move to urban areas, exposure to Western habits, including chocolate consumption, has increased. Urban consumers prefer convenience products, and chocolate, being easily accessible, fits well into this trend.
• Expansion of Organized Retail: Indonesias retail sector has grown steadily, with over 28,000 supermarkets and hypermarkets operating in 2024. The expansion of organized retail provides consumers with easy access to a wide variety of chocolate products, from mass-market brands to premium selections. Supermarkets and hypermarkets, particularly in urban centers, account for a significant portion of chocolate sales, creating a conducive environment for brands to tap into the rising demand for convenience-driven shopping experiences.

Challenges

• Fluctuating Cocoa Prices: Cocoa prices have shown considerable volatility, with recent reports indicating prices fluctuating between USD 8,000 to USD 10,000 per metric ton as of mid-2024. Indonesia, being a significant importer of cocoa due to insufficient local production, is particularly vulnerable to global price swings. These price fluctuations, influenced by factors such as climate change and supply chain disruptions have raised production costs for local chocolate manufacturers, affecting profitability and pricing strategies.

• Limited Local Cocoa Production: Indonesia's cocoa production has steadily declined, with output dropping to approximately 220,000 metric tons in 2024, down from 275,000 tons a decade earlier. This has increased the countrys reliance on imported cocoa beans to meet domestic chocolate manufacturing demands. The lack of sufficient local production stems from aging plantations and inadequate farming techniques, which have hindered productivity growth.

Indonesia Chocolate Future Market Outlook

Over the next five years, the Indonesia chocolate market is expected to witness robust growth driven by increasing demand for premium chocolates, growing online retail channels, and heightened consumer awareness about sustainable sourcing. The rise in health-conscious consumers has also created opportunities for manufacturers to develop healthier chocolate options such as dark chocolate and low-sugar alternatives. Moreover, the increasing popularity of e-commerce platforms is expected to enhance the market reach, particularly among younger and tech-savvy consumers.

Market Opportunities

• Health-Conscious Consumer Trends: Dark chocolate, perceived as a healthier alternative due to its high antioxidant content, has seen growing demand in Indonesia. The rise of organic and sugar-free options also presents a significant opportunity for manufacturers to cater to this growing demographic. With the global wellness industry booming, the trend towards healthier indulgence is expected to create room for product innovations such as functional chocolates infused with vitamins and minerals.
• Expansion of E-commerce: The chocolate market has benefited from this boom, as more consumers turn to online platforms to purchase premium and imported chocolates. Major e-commerce players like Tokopedia, Shopee, and Lazada have expanded their product offerings to include a wide range of chocolates, making it easier for brands to reach consumers in remote areas. This trend is expected to continue as internet penetration increases and logistics infrastructure improves.