Indonesia Wine Market Outlook to 2030

Indonesia Wine Market Overview

• The Indonesia wine market is valued at USD 980 million, showing a stable but gradual recovery following several years of contraction. This recovery is driven by a combination of factors, including the rise of tourism, increasing local acceptance of wine culture, and the emergence of wine in urban social gatherings.

• Bali and Jakarta are the dominant cities in Indonesia's wine market, primarily due to their status as tourist hotspots and their affluent expatriate populations. Bali, in particular, sees a high demand for wine, both from international tourists and a burgeoning local hospitality industry.
• The Indonesian government has launched several tourism campaigns aimed at attracting high-spending tourists from countries with strong wine cultures, including Australia, Europe, and the U.S. By 2024, government programs are expected to attract over 20 million international tourists, particularly in Bali and other resort areas, fueling demand for premium wines.

Indonesia Wine Market Segmentation

By Product Type: The market is segmented by product type into still wine, sparkling wine, fortified wine, and non-grape wine. Recently, still wine has dominated the market, driven by its popularity among locals and expatriates. Still wine's affordability and wide range of options, from local to imported varieties, make it a favorite for both casual consumption and formal gatherings.

By Distribution Channel: The market is also segmented by distribution channels into on-trade (restaurants, hotels, bars), off-trade (supermarkets, hypermarkets, and specialty stores), and e-commerce. On-trade dominates the distribution, especially in tourist-heavy areas like Bali, where wine is a key offering in high-end restaurants and resorts. Off-trade, while less dominant, has grown steadily due to wine retailing in urban supermarkets.

Indonesia Wine Market Competitive Landscape

The market is characterized by a blend of local and international players. Local brands such as Hatten Wines have a strong presence in the domestic market, especially in regions like Bali, leveraging local production and cultural integration.

Indonesia Wine Market Analysis

Market Growth Drivers

• Increasing Middle-Class Population and Wine Consumption Indonesias growing middle-class population, expected to reach over 70 million by 2024, is driving the demand for premium beverages, including wine. This shift towards premium lifestyle choices has resulted in a steady rise in wine imports. By 2024, imports of alcoholic beverages, including wine, are expected to grow by over 1.5 million liters annually, with increased preferences for imported wine brands as local wine production remains limited.
• Growth of Tourism and Hospitality Industry Indonesias tourism industry is projected to see growth by 2024, with expectations of over 18 million international arrivals, particularly in Bali, Jakarta, and other key tourist destinations. This influx boosts demand for premium alcoholic beverages like wine in hotels, resorts, and fine dining establishments.
• Cultural Acceptance of Alcohol in Specific Areas While Indonesia has a predominantly Muslim population, regions like Bali and parts of Jakarta are seeing an increasing cultural acceptance of wine consumption, especially in restaurants, bars, and social gatherings. The hospitality sector is witnessing a growing preference for wine over traditional alcoholic beverages in these areas, where annual sales of wine have increased by over 150,000 bottles.

Market Challenges

• Cultural and Religious Restrictions: The Muslim-majority population in Indonesia has historically limited the consumption of alcoholic beverages, including wine. In certain provinces and regions, the sale of alcohol is restricted or prohibited. By 2024, it is projected that wine consumption will remain limited to select urban areas and tourist hubs, where restrictions are more lenient.
• Limited Wine Production Capacity: Indonesias tropical climate is not conducive to wine grape cultivation, and local wine production remains minimal. The country produces less than 10,000 bottles of wine annually, primarily from grapes imported from neighboring countries like Australia. This limited capacity makes the country heavily reliant on imports, which face high tariffs and logistical challenges.

Indonesia Wine Market Future Outlook

Over the next five years, the Indonesia wine industry is expected to witness growth driven by tourism recovery, increasing consumer interest in premium and organic wines, and rising adoption of wine in urban social settings.

Future Market Opportunities

• Growing Demand for Premium and Imported Wines In the next five years, Indonesias demand for premium and imported wines is projected to rise, with imports expected to surpass 2.5 million bottles by 2028. This growth will be driven by high-end consumers in urban centers and an increasing number of affluent expatriates, particularly in Jakarta and Bali.
• Expansion of Wine Retail and E-commerce Over the next five years, the Indonesian wine market will see a shift toward online wine sales. E-commerce platforms specializing in alcoholic beverages are expected to see wine sales increase by over 300,000 bottles by 2028, as consumers seek convenience and access to a broader range of international wines.