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F&B industry slashes growth target to 5 percent
A business association now expects sales growth in the sector to slow to 5 percent this year, far below its previous projection of 7-9 percent.
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A customer picks a bottled beverage from a refrigerated display at a supermarket in South Tangerang, Banten, on July 5, 2024. (Antara/Sulthony Hasanuddin)
T
he food and beverage industry has slashed its growth forecast for 2024, citing economic headwinds and a consumer spending squeeze.
The Indonesian Food and Beverage Producers Association (Gapmmi) now expects sales growth in the industry to slow to 5 percent this year, far below its previous projection of 7-9 percent.
Gapmmi chairman Adhi S. Lukman said on Monday that, while the industry expected a 5.5 percent year-on-year (yoy) growth spurt in the third quarter, the overall performance for the year was likely to be weaker.
“My estimate is around just 5 percent by the end of the year. Hopefully, this will be achieved,” he said, as quoted by Kontan.
Read also: Investment growth on track in first quarter, jump in F&B sector
Economic woes have eroded consumer purchasing power, particularly among lower-middle income households, leaving only higher-income groups able to afford price increases, according to Adhi.
Weakening household spending has begun to show up in various economic indicators including the consumer price index (CPI), which measures inflation. According to Statistics Indonesia (BPS), consumer prices decreased in three consecutive months, as the CPI dropped 0.03 percent in May, 0.08 percent in June and 0.18 percent in July.
