Ride the momentum of mobility comeback
In 2022, the out-of-home market has been in recovery mode after getting hit during the pandemic. Value growth of 6% in 2021 indicates a promising recovery for the beverages market, with the out-of-home contribution above 60%, double that of in-home consumption. As a result, growth for the total beverages market (in-home and out-of-home) is 5%, driven by faster growth in out-of-home. Greater mobility post-pandemic means that school-age shoppers are again driving the growth in out-of-home consumption, with young children (<10yo) and teenagers (11-20yo) becoming the fastest-growing cohort. There is huge potential for the beverages market to attract more young shoppers to become the main contributor in Indonesia.
Shoppers’ preferences are varied, and brands need to adjust their recruitment strategy based on the core buyer profiles. For example, the growth drivers for the dairy and non-dairy segments are different, with young children (below 10yo) driving the dairy segment and teenagers driving non-dairy.
Younger shoppers prefer functional drinks, which deliver benefits for growing up, such as liquid milk. While teenagers tend to be more experimental and look for more flavours as refreshments, such as ready to drink (RTD) tea and juice. Meanwhile, older shoppers opt for healthier hydration as their main preference, such as mineral water, as well as flavoured refreshments. The fact that some categories are more prominent in certain age groups, it is important for brands to think about their recruitment strategies by focusing on core buyers and also extending to the other cohorts.
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Beverage consumption may depend on specific needs at specific times of the day. In the morning, functional drinks, such as liquid milk and mineral water, may be a preference for breakfast consumption. Later in the afternoon, the preference might be for refreshment, which means some categories like RTD Tea are more relevant for this occasion. Some categories like RTD Juice and isotonic are preferred to unwind later on. Understanding the time of purchase (and consumption) will help brands target the right occasion and trigger the purchase with a relevant narrative. Daytime (11am to 5pm) becomes the critical window of opportunity for brands to tap into. Most purchases across the categories are mid-morning to afternoon, however, there are finer distinctions when it comes to early morning and evening windows.
In addition to purchase occasions, taste is a key factor in triggering purchases for beverage categories. Some categories are managing to attract new shoppers with acceptable flavours in addition to its functionality. For brands, thinking about the essentials of flavour, function, and occasion will help trigger purchases and grow the category.
Time of purchase and consuming are essential to Beverage sector. Our team can help you to seek which occasion that you can tap in and how you can make the most out of it. Find out more
Shopper recruitment for out-of-home occasions should focus on proximity to help drive impulse purchases. General Trade (GT) is the backbone in terms of availability. In GT, most consumers buy in cash, so the pricing strategy will need to align with the denomination of money, suggesting an optimum price of IDR 3k, 5k, 10k, for dairy categories, and IDR 1k, 3k, 5k rupiahs for non-dairy categories.
Meanwhile, in modern trade, spending may be higher than in general trade, hence the optimum price point is higher. In summary, recruiting shoppers in both GT and MT requires a relevant price point to serve different cash outlays.
Modern Trade Magic PriceDairy 3K, 5K, 10KNon-Dairy 3K, 5K
General Trade Magic PriceDairy 3K, 5K, 10KNon-Dairy 1K, 3K, 5K
Brand growth rules are based key measurements, including growing the shopper base (penetration), driving purchase levels up (frequency), and setting different key price points across channels as this contributes to value growth. So, how brands can win more shoppers?
#1 Enlarging buyer base• Focus on recruiting core buyers and younger consumers to help drive recovery, including young children in dairy, and teens in non-dairy • Serve the different needs across age groups, from functional nutrition to healthy refreshment
#2 Driving purchase levels up• Offering memorable tastes. This is a key factor in driving purchases, even for functional beverages • Leverage different times of the day within categories to drive various purchase occasions and extend beyond traditional times
#3 Offering an optimum price • Optimise the price in each channel as winning shoppers in both GT and MT requires a relevant price point to serve different cash outlays.
This chapter uses Kantar's panel FMCG data per Oct 2022.
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