Instant noodles are an important food product in Indonesia as they are highly popular among the giant population. Indomie, an instant noodle brand produced by Indofood Sukses Makmur, is the most famous one. In fact, it is the most popular brand in Indonesia (not only of all instant noodle brands, but of all brands in Indonesia). Indofood Sukses Makmur said its Indomie sales rose ahead of Idul Fitri (the celebrations that mark the end of the Ramadan month), both domestic sales and export orders.
Stefanus Indrayana, General Manager Corporate Communication at Indofood Sukses Makmur, said foreign demand for Indomie noodles particularly originates from countries on the African continent and the Middle East. Smaller volumes of Indomie are shipped to Australia, Papua New Guinea, Hong Kong, Timor Leste, the United States (USA), New Zealand, and the European Union (EU).
However, domestic sales continue to dominate the company's total instant noodle sales. Roughly, 90 percent of total production is sold on the domestic market, while the remainder is shipped abroad.
In the first quarter of 2017, Indofood sold IDR 6.12 trillion (approx. USD $460 million) worth of instant noodles, manufactured at its 16 plants that have a combined capacity of 15 billion instant noodles packages per year. These instant noodles sales contribute nearly 65 percent to the company's total sales.
Meanwhile, data from Indonesia's Statistics Agency (BPS) show Indonesia exported USD $84.8 million worth of instant noodles in the first five months of 2017, up 4.43 percent (y/y) from instant noodle exports in the same period one year earlier, indicating foreign demand is rising. Sribugo Suratmo, Chairman of the Association of Bread, Biscuit and Instant Noodle Producers (Arobim), said rising demand from the Middle East is particularly promising and therefore total instant noodle exports of Indonesia could rise in the range of 10 - 15 percent (y/y) in 2017.
The World Instant Noodles Association (WINA) said worldwide demand for instant noodles reached 97.46 billion packages in full-year 2016, down slightly from 97.65 billion instant noodle packages in the preceding year. China remained the biggest consumer of instant noodles, eating some 38.52 billion packages in 2016, followed by Indonesia (13 billion instant noodles packages).
Biggest Global Instant Noodle Consumers:
in billion packages
Source: World Instant Noodle Association (WINA)
The table above shows that both in China and Indonesia consumption of instant noodles have actually been declining since 2013. However, sales of Indofood have not been affected, meaning it has been expanding its market share at home. Indomie's biggest rival is Mie Sedaap, produced by the Wings Group. However, the gap between both is rather huge (in terms of market share) as Indofood can rely on a strong brand and loyal customers. Meanwhile, industry players expect instant noodle consumption in Indonesia to rebound this year.
What explains the popularity of instant noodles in Indonesia?
• Available at the modern & traditional retailers across the Indonesian archipelago
• Affordable (also by the poorer segments of the population)
• Offers a wide range of flavors (often new flavors come on the market: innovation)
• It is a practical meal (quick and easy to make)
• Brand awareness through aggressive advertising campaigning (especially television)
So far this year, shares of Indofood Sukses Makmur that are listed on the Indonesia Stock Exchange have risen 13.55 percent to IDR 8,750 a piece (for the same price you can buy a couple of Indomie packages):
Stock Quote Indofood Sukses Makmur- INDF: