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USA-Indonesia Food Packaging

Packaging manufacturers are keeping an eye on growth opportunities in developing markets.

Pw 6479 0825 Usindo
One area of interest for this group should be the development of retailing in emerging markets. Indonesia's retailing landscape is appealing as modern retailing has emerged. Although the retailing landscape in Indonesia is still strongly dominated by traditional-style retail outlets like street-side kiosks, since the late 1990s, in both cities and smaller towns, there has been rapid development of more modern retail outlets (such as hypermarkets and convenience stores). This has benefited the packaged foods industry immensely as these modern retail outlets offer more packaged food versus the fresh, unpackaged food sold at traditional outlets.

Total food packaging in Indonesia is forecasted to grow by 34.2% from 2007 to 2012 resulting in a compound annual growth rate of 6.1%, while in the U.S., the growth rates are projected at 4.7% and 0.9%, respectively. Furthermore, total volume growth in units during this forecast period is 15.3 billion units for Indonesia versus a unit volume growth of 9.5 billion units for the U.S. Dried processed foods (forecasted rate of 30%; growth of 5.2 billion units) and confectionary (forecasted rate of 43.1%; growth of 3.7 billion units) are two of the categories leading the growth in Indonesian food packaging. Meanwhile, frozen and chilled processed foods are increasingly entering into modern retail outlets.

Better storage facilities at modern retail outlets allows for more diversity in the product mix as well as greater variety in the packaging types and sizes. While flexible packaging remains the most predominant packaging type (comprising approximately 80% of total food packaging), other types such as rigid plastics and paper-based containers are projected to grow favourably. Various sizes, from individual to multipacks are now more widely available to Indonesian consumers. The modernization of retailing in developing countries is certainly a trend worth paying close attention to for packaging manufacturers. 

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