Strong economic recovery buoyed by the easing of COVID-19 restrictions, and the full-scale reopening of clubs and bars are expected to boost the volume sales of spirits in Indonesia in 2022. As a result, the Indonesian spirits market is projected to grow from IDR4,171.6bn ($290.8m) in 2021 to IDR7,491.5bn ($495.1m) in 2026, at a compound annual growth rate (CAGR) of 12.4% during 2021-2026, forecasts GlobalData, a leading data and analytics company.

GlobalData’s report, ‘Indonesia Spirits Market Size by Categories, Distribution Channel, Market Share and Forecast, 2021-2026’, indicates that low inflation levels, and improving employment rates will encourage consumers to purchase premium brands. The market growth will be primarily driven by the rum category, which is set to register the fastest value CAGR of 14.4% over 2021-2026. The category will be followed by vodka and liqueurs, which will record a CAGR of 14% and 12.4%, respectively, over the forecast period.

Anush Shaw, Consumer Analyst at GlobalData, says: “In Indonesia, the sales of spirits are mainly driven by on-trade channel sales, with on-trade transactions accounting for 60.5% of the sector value, and 30.4% volume share in 2021. However, as the hospitality sector continued to be stifled by COVID-19 restrictions, ‘on-premise’ sales were subdued in 2021.

“In line with the improving vaccination rates, and the increasing influx of foreign tourists, nightclubs, clubs, bars and pubs will record a steady increase in guest visits, which will boost ‘on-premise’ sales volumes.”

‘Food & drinks’ specialists was the leading distribution channel in the Indonesian spirits market in 2021, followed by ‘hypermarkets & supermarkets’.

The per capita expenditure of spirits in Indonesia decreased from $1.8 in 2016 to $1.5 in 2021, far lower than both the regional average ($138.7) and the global average ($150.7). However, the PCE on spirits is expected to recover and reach $2.6 in 2026 as the Indonesian economy recovers and public life normalizes.

Sumer Sari Mekar Perkasa Pt, Diageo plc, and Perindustrian Bapak Djenggot PT were the top three companies in the Indonesian spirits’ sector in 2020.

Shaw concludes: “Even as the COVID-19 conditions fade, at-home consumption of alcoholic spirits will remain stable, driven by the resumption in social gatherings and celebrations. E-retailers will continue to benefit from this interest in ‘home premise’ consumption and mixology. At the same time, ‘on-premise’ sales of alcoholic drinks will recover as consumers gain more confidence to dine out-of-home, and participate in mass events and festivities.”