INDONESIA January 2019
Indonesia to continue to remain as one of Fonterra's key markets in Asia
Fonterra has been in Indonesia for more than 37 years and it has successfully built strong presence in this country with a manufacturing site in Cikarang.
Fonterra supplies dairy ingredients and solutions to Indonesia's top food and beverage manufacturers under the brand of NZMP. In 2017, Indonesia was one of the top 15 countries globally that it exported its dairy ingredients to, as such, according to Ms Karena Chia, Regional Insights and Activation Manager, Fonterra (SEA) Pte Ltd, "We see huge potential in the dairy industry here in Indonesia and we are continuously investing to ensure we can capture this growth."

NZMP Broad Positioning in Indonesian Market
As Indonesia is a huge consumer market, Fonterra adopts a broad positioning in this market and is committed to providing high quality dairy nutrition to Indonesian consumers across all life stages and incomes. Karena added, "Our dairy ingredients can be found in a variety of adults and kids milk drinks, milk powders, yogurt, processed cheese, high protein drinks and ready-to-mix powders, condensed and evaporated milk and even in food products such as muesli bars and pizzas."
New Product Concepts – Health & Nutrition, Affordability are key issues
At Fi Asia 2018, Fonterra showcased a wide range of new product concepts utilising NZMP dairy ingredients for customers (manufacturers) ranging from green tea flavored whey protein water, medical beverage to chocolate brownie as well as ready-to-mix protein powders.
Karena observed a growing trend towards health and nutrition, with protein-fortified food and beverage concepts gaining traction both in Indonesia and ASEAN. Modern consumers are becoming more health conscious and aspire to more active lifestyles and seek specific nutritional benefits in foods. Karena said, "Affordability remains an important factor in our region (ASEAN) including Indonesia and concepts which deliver a strong value-for-money proposition are seen as appealing."
To ensure success of new product concepts, NZMP forms partnership through close collaboration with its Asian customers, and not just supplying ingredients but working with them to create solutions from providing technical expertise to offering supply chain solutions. NZMP is focused on developing innovative new dairy solutions to meet the rapidly changing needs of its consumers across the region. Karena claimed that Fonterra (NZMP) is one of the largest investors in dairy innovation globally, having invested more than NZ$1 billion (US$682 million) in the past 10 years.

NZMP invests in Consumer Research
Recently, NZMP has also invested heavily in market research to understand consumer perspectives with regards to milk powder which indirectly could give NZMP valuable insights prior to developing new product concepts.
NZMP latest consumer research in Indonesia has shown that 4 in 10 consumers are very interested in products that contain high protein. This is notably higher among consumers in the age range of 18 to 34 years old. In addition, the research found that Indonesians ranked protein as 2nd most important compared to other nutrients in food.
Indonesia is also the 3rd largest Sports Protein Market in Southeast Asia with a market value of US$13.8 million, just behind Singapore (US$73.8 million) and Thailand (US$15.9 million), according to latest report by Euromonitor Plc.
(See Chart 1.0 and 2.0 for latest findings from the consumer research done by NZMP in Indonesia)
Growing demand for high-protein nutrition
There is a growing demand for high-protein nutrition in ASEAN. NZMP partners with leading food and beverage manufacturers to co-develop products that meet consumers’ emerging needs. For example, in 2015 it worked with CP-Meiji, the leading pasteurised milk producer in Thailand, to launch its first high protein milk product using one of NZMP’s SureProtein™ ingredients. NZMP SureProtein™ ingredients can double the protein content in certain product formats. Since then, CP-Meji has launched 6 new flavours with its latest, a zero added-sugar high protein pasteurised milk.
There is also a growing global need for protein-fortified nutritional solutions for the ageing population that allow them to enjoy nutritious foods in their later years. Asia Pacific is currently home to 60% of the world’s elderly population aged 60 years and above, and this number is expected to more than double from 547 million to nearly 1.3 billion by 2050.
NZMP’s Medical Nutrition division is also developing specialised, science-based solutions to help treat sick and vulnerable consumers who are suffering from issues such malnutrition, cancer and other diseases, as well as to help people age in good health. Karena added, "For example, our new high protein medical beverage delivers protein to muscles quickly, which is important if someone has just undergone surgery or chemotherapy."

NZMP existing customers
NZMP has more than 90 customers across South and South East Asia markets, with its regional team of 45 people based across Singapore, Thailand, Vietnam and Philippines.
Karena highlighted that NZMP customer base ranges from multinational companies to local/regional food and beverage manufacturers and even start-ups.

Animal Protein vs Plant Protein
Presently, there is a growing global trend in favour of plant protein against animal sources. Despite this growing movement, consumption of protein from animal sources will continue to remain strong. Karena concluded, "Dairy proteins are 'complete proteins' which are high quality proteins that provide all of the essential amino acids at the levels required by the body. In addition, dairy proteins provide a higher percentage of indispensable amino acids than other protein sources such as soy or peas." (See Chart 3.0)



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