Indonesia is going to consume 99,000 tons of chocolate this year, establishing a domestic market worth USD 1.13 billion. Originally a raw cocoa exporter, the development of the cocoa processing industry and increasing domestic consumption are turning Indonesia into a net importer of cocoa and products thereof.
Indonesia is the third largest cocoa producer in the world, after the Ivory Coast and Ghana. However, as the government’s efforts to encourage local cocoa processing increasingly pay off, local production is not sufficient anymore, which turns the country into a net importer. In order to meet the growing demand, the government dropped the 5 percent import duty on cocoa beans in 2014.
As one of the biggest cocoa producers, Indonesians enjoy the lowest chocolate prices in Asia. This in combination with the increasing number of middle and upper income class consumers, leads to chocolate not being considered as a luxurious product anymore. As a result the market for chocolate is growing. In 2016, Indonesians consumed 94,000 tons of chocolate, more than double compared to 2007. The market value in 2016 reached USD 1.13 billion, from just USD 300 million in 2007 and the trend is expected to continue. Mintel, a global research company, estimates that the country's market will grow by 12 percent on average annually reaching more than USD 1.6 billion in 2020.
The drivers of this growth are the shifting lifestyles and demand of the young and urban population. Next to seasonal demand such as during Valentine’s Day, Christmas or Idul Fitri, the regular purchases of chocolate reflect the shift from chocolate as a luxurious to a regular product. For example, Mintel found that 46 percent of Indonesian consumers in urban areas, aged between 18 and 24, have chocolate biscuits at least once a week. About 28 percent of them buy chocolate on impulse, while 17 percent on intention.