Indonesian Packaging Industry
Challenges on the horizon for bottled and packaging sector Among its many resources, Indonesia has an abundant supply of water catchments. It has more than enough water to supply its 250 million population, but due to problems with distribution and lack of safe drinking water, demand is surging for bottled beverages. But other challenges are looming for the packaging sector such as the impending excise tax on plastic packaging that may slowdown growth of the bottled and packaged food and beverage industry, says Angelica Buan in this report.
Lack of clean, safe drinking water What is plaguing the country’s ability to quench the water needs of its people is the uneven distribution, poor management and lack of infrastructure, which have left parts of the country with insufficient access to water. For the most part, 35% of the country’s households have water sourced from wells and public taps; while the rest satiate their requirements from water bodies, rain water, refilling water stations and others. Nonetheless, potability and safety of water are matters of concern. Pollution and other contaminants are depriving Indonesians access to safe water supply. For example, most industrial and domestic waste is discharged into rivers, which is a source for many households that do not have access to piped water. In a recent report by TechSci Research, researchbased global management consulting firm, it says that water degradation is an outgrowth of the increasing population and industrial development, especially in the western region of the country. “Domestic and industrial wastes spoil the drinking water sources, and small scale mining activities near the rivers also contribute to the cumulating mercury level in river water,” it says.
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SEPTEMBER 2016
To make water safe, water treatment, mostly by boiling, has been employed in 70% of households across the country, according to the country’s Demographic and Health Survey 2012. But rural households are resorting to water treatment far more than urban households, since the latter prefer bottled or refilled water. The TechSci report on Indonesia’s water purifiers market supports this finding. It says that the water degradation situation in many areas of the country is a reason for reliance on either bottled or boiled water. Alternatively, households invest in water purifiers.
Many households in Indonesia prefer to use bottled or refill water for drinking
Need for safe drinking water globally Globally, the bottled water market, which consists of the retail sale of sparkling flavoured water, sparkling unflavoured water, still flavoured water and still unflavoured water, is witnessing gains. In addition to unsafe water supplies, a growing awareness to consume less sugar is also pushing the global bottled water demand. US-based GrandView Research projects growth in this sector, on account of shifting consumer preference from high calorie carbonated soft drinks (CSDs) to healthier alternatives that are fortified with vitamins and flavouring agents. Asia is one of the largest markets for bottled water. Population growth and rising awareness towards vitamin-enriched water in China, India, Thailand, Malaysia and Indonesia is expected to be an important factor to fuel bottled water demand. Indonesia’s bottled water industry is a fast growing sector and is significantly contributing to the economy, India-headquartered Mordor Intelligence says in a report, adding that growth in the domestic market also segues to introducing improvements to water facilities.