Indonesia
catering market has surged owing to the growing
number of international tourists, domestic air travelers, wedding ceremonies
being held in the country, higher catering demand from industrial clients
(hospitals, mining sites, manufacturing plants, oil & gas sites and
educational institutes requiring catering services) and the positively
inclining number of MICE/corporate/private events being hosted in various
event-halls across the country. The market witnessed a robust CAGR of ~% during
the review period (2012-2017) due to the combined effect of these factors. The
market is currently placed in medium growth stage with strong possibility for
further growth at a faster pace.
Profitability
associated with catering is highly correlated with multiple factors such as
maintaining records of profit/loss statements during various individual events
& its effective interpretation, cost reduction related to transportation of
raw materials, minimization of wastage, sustaining & expanding client relationships,
having multiple event halls with different capacities, quality of food being
served, efficient & effective service provided amongst various others.
Estimated profitability range for event and pure-play caterers has been
analyzed to be ~% in 2017. Highest profit margins per person have been charged
in the hospitality catering sector by star-hotels.
Hospitality
sector constituting of hotels & wedding halls have contributed ~% to the
total revenue generated through catering in 2017. Price charged per person is
as high as IDR ~ per person in 5-star hotels for weddings and ~ per person for
corporate events. On an average, more than ~ weddings & more than ~
corporate events are being organized in 5-star hotels per month across
Indonesia. In-flight catering sector has acquired ~% revenue share of total
Indonesia catering market in 2017. In-flight caterers have particularly been
benefitted by the continuous growth in tourism sector of the country. CAS Group
(Food) and Aero food have dominate the in-flight catering market in terms of
clientele. This sector accounts for the third highest contribution with ~%
revenue share in the overall market. There are about ~ industrial caterers
present in the country. Market players offering catering services to
educational institutions such as schools and universities in the country
accounted for ~% to the overall revenue generated in 2017
With large brand name, exceptional venue and menu options provided, more
number of event rooms, higher capacity in terms of space and equipment’s
required to host multiple weddings and corporate events at the same time
exceptional supplementary services extended and top-quality services given to
wealthy end user segments, 5-star hotels have dominated the revenue generated
from hospitality catering services in 2017. These 5-star hotels collectively
generated USD ~ million from their food and event catering services during the
same year. The hotel also consists of more than 4 meeting rooms for organizing
MICE events within the premises. Wedding/event halls held second highest market
share in the hospitality segment with ~% of the market owing to increased
number of marriages in the country
Wedding halls do not consist of a grand ballroom; rather such entities
have limited number of function rooms, ranging between ~ for hosting weddings
and corporate events of up to ~ people. 4 star hotels on the other hand
accounted for the third largest share, adding USD ~ million to the market
revenues in 2017
A 4 star hotel has a small size ballroom, which is generally divided
into two rooms for hosting different events with an accommodation capacity of
about ~ people. The average number of meeting and function rooms in 4 star
hotel ranges from ~, where corporate events take place. 3 star hotels focus on hosting all types of
events at very reasonable prices, which limits their revenues in comparison to
other players operating in the space. Such entities contributed USD ~ million
to the market revenues in 2017.
Major airline
companies in Indonesia consist of two food related departments running in
parallel. These are airline’s catering department and F&B department.
Catering division could be a pure service extended by the parent airline.
However, from the business perspective, since catering is not really a core
competency of the airline, caterers are able to supply to multiple airlines and
leverage revenues from where ever possible. Two major parts of the catering
division sub-sectors include Meal Design and Meal Planning. The entire catering
procedure involves various processes and sub-processes starting from menu
standardization of different flights. The airline company then provides
quotations, provides the caterer with meal presentation requirements, set up
their meal policy, run material requirement plan and estimate monthly
consumption, generation of production schedule and then enters flight catering
order. There are certain challenges faced by the in-flight caterers in
Indonesia. The overall cost is comprised of ~% logistics cost, whereas ~% adds
up to the cooking and catering expenses. This is due to the heavy cost of
refrigeration, cooling, transporting and others. It is highly important to
focus on maintenance of temperature so that the food remains in fresh
conditions even after few hours. The caterers have to make sure that the food
doesn’t contain too-much of fat content, which is difficult to digest by the
passengers during the flight.
Currently, PT
Reska Multi Usaha caters to the food requirements in Indonesian Railways. This
daughter company was established in 2003. It is a subsidy of PT Kereta Api
Indonesia, working in various segments for parent company. These include
catering, restaurants, parking, cleaning service and general trading. The
company has been undergoing changes, modifications and up gradation since 67
years of its establishment. Every train usually has a catering car located in
the central area of the train. The Company has ~ central kitchens in Bandung,
Jogja and Manggarai Indonesia railway catering market size has been estimated
to be approximately IDR ~ billion in 2017.
Per Day: PT Reska Multi Usaha generates IDR ~ million daily through food
catering in Indonesian in 2017. ~ Meals served per day in 6 regions through
train catering. Jakarta & Surabaya comprise of ~% share of the total meals
supplied in 2017.
Event
planning or event management consists of organizing large scale festivals,
wedding ceremonies, private ceremonies, conferences, concerts and business
conventions on behalf of end-users by directly dealing with major hotels,
weddings halls and event halls. Different events have their own peculiar
requirements hence, event planners deal
with budgeting, scheduling, site selection, acquiring necessary permits,
coordinating transportation and parking, arranging for speakers or
entertainers, arranging decor, event security, catering, coordinating with
third party vendors, and making emergency plans differently for varied
occasions. Meeting tight deadlines, fitting event finances in tight budget,
high client prospect and organizational stakes, temperamental clients, managing
dependencies, language barriers, technological glitches and converting event
plans on paper into a reality are the various issues faced by event planners in
Indonesia.
There has
been an increase in the number of destination weddings in Indonesia by the end
of 2017. Growing popularity of the serene beauty of Indonesian landscape, low
price in comparison to resident country and trend-popularity have been the
major reasons for this growth. The venues for destination events are majorly
located in remote areas such as small islands, cliffs and other exotic places
hence, this concept is usually popular for destination weddings in comparison
to MICE events.
Some of the
very famous venues for destination wedding include, Infinity Chapel, Conrad
Bali, Prambanan Temple, Central Java, Pine Forest Camp, Bandung, Mirage Wedding
Chapel Bali, Batavia Marina, Jakarta, The White Dove, Banyan Tree Ungasan Bali
and Jeeva Klui, Lombok. Approximately, a specialized hotel for destination
wedding organizes around ~ weddings per month. Average attendance per wedding
is less than ~ People
On the other
hand, average price per person for destination weddings is more than IDR ~ per
person. Remote islands near Bali form clusters for such types of weddings in
Indonesia.
For
destination weddings people mostly come from Australia and various European
countries.
The overall
competition stage of the industry has been a mix of fragmented and concentrated
scenarios depending on major sectors of the market. For instance, hospitality
sector and the market for pure play caterers is highly fragmented whereas,
in-flight & industrial catering sectors have been marked with highly
concentrated competition scenarios. There were approximately ~ food catering
entities operating in 2017 providing food catering services along with
providing supplementary facilities such as flower decoration, parking
facilities, seating arrangement, cutlery and others. Few of the major players
include Sasana Kriya, Hilton Garden Inn, Conrad Bali, The Royal Santrian, Hard
Rock Hotel Bali, Holiday Inn Jakarta, Holiday Inn Express Jakarta Thamrin, PT
Indocater, CAS Group, Aerofood and others. The pre-requisite of heavy
investment into setting up a full-fledged production facility and establishing
a large distribution network has prevented stakeholders to scale their
businesses over a certain geographic limit. This also proves to be barrier in
the entry of new players. Presence & expertise of major players, large
geographical out-reach (especially to remote sites), diversity in menus, larger
capacity of event halls, well established & exclusive clientele has helped
these major players to assemble higher revenue share in the market during the
review period.
In the
short-run, the market has been anticipated to grow to USD ~ million by the end
of 2020 registering a three year robust CAGR of ~% during 2017 to 2020. In long
run, it has been analyzed that Indonesia catering market would register a
steady five year CAGR of ~% during 2017-2022 and hence attain a market size of
USD ~ million by 2022 from USD ~ million in 2017. Indonesia would become a hub
for hosting successful MICE and destination events in the coming future.
Increase in the number of wedding/event halls, construction of new hotels with
more number of ballrooms and meeting rooms, expected increase in the number of
foreign tourists, rise in the number of healthcare centers with more number of
in-patients and expanding industrial units demanding catering services would
help facilitate the growth in the market size.
Rising number of private and MICE events is expected to be the major reason
behind the dominant share of hospitality sector in the revenues of overall
catering market on Indonesia by 2022. Hospitality sector is expected to
contribute ~% to the overall revenues generated by catering companies in
Indonesia in 2022.
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