Prepared-Drinking Challenges and Opportunities Post Pandemic Covid-19

Prepared-Drinking Challenges and Opportunities Post Pandemic Covid-19

This sector covers various beverage categories such as Bottled Drinking Water (RTD- bottled and cup), ready-to-serve tea, juice and fruit juice drinks, carbonated drinks, coffee drinks, beverages sport and isotonic as well as milk-based drinks, and all of this is solely to answer the diverse needs of Indonesian consumers, both in terms of beverage product preferences, product needs, habits and of course the ability to shop for ready-to-drink beverage products. These categories are quite dynamic in the future because consumer preferences and abilities will continue to evolve.

One thing that can be proud of is that ready-to-eat beverage products produced in Indonesia have relatively become the host in their own country. It can be seen how the beverage products offered by domestic producers, whether local brands or foreign producers that issue local variant products, are available in various minimarkets, supermarkets, hypermarkets as well as in stalls and grocery stores.

It can be said that the ready-to-serve beverage industry has a fairly democratic character where business actors from various backgrounds and abilities can compete in order to gain market or consumer acceptance. Data from the Central Statistics Agency (BPS) in 2015 stated that there were more than 47000 small and micro-scale business actors in the beverage industry sector. Meanwhile, medium and large companies are in the range of 300 companies.

Challenges of the Beverage

Industry The ready-to-serve beverage industry relies heavily on the existence of hotels, restaurants, catering, and community gathering activities, as potential markets for its products.  The Covid-19 pandemic has hit the ready-to-serve beverage industry suddenly since March 2020, so that the foundations of the ready-to-drink industry are in ruins. In general, there are two major impacts felt by the ready-to-serve beverage industry due to the Covid-19 pandemic. First is the marketing channel (market channel) of ready-to-serve beverage products and the second is the product category and ready-to-drink product portfolio.

Historically, traditional channels or public sales such as stalls and grocery stores have always dominated the marketing channels for ready-to-serve beverage products in Indonesia. This is because the existence of stalls and grocery stores is very massive and spread out, so it is natural that the sales contribution of ready-to-drink products through this channel can reach 60-70 percent of the total sales volume.

The sales growth of ready-to-serve beverage products through modern market channels such as minimarkets, convenience stores, supermarkets, hypermarkets, and others has indeed grown quite rapidly in recent years. Based on Nielsen's data for 2019, sales growth of ready-to-serve drinks in the modern market reached approximately 6%, while growth in traditional channels was negative at around 2-3%.

However, the Covid-19 pandemic changed the existing order. With restrictions on human movement and concerns about health and issues hygiene, consumers are turning away. Channels of commercial trade (e-commerce), which previously has not been play a big role, this time a lot of the choice of consumers to for shop needs their daily also needs food and drink ready.

Even though in the early of days the pandemic, modern channels such as minimarkets experienced a decline in sales, but over time, consumers started shopping again at minimarkets, mainly due to the proximity to the location of residence and the level of trust that was applied as well as the health protocol in the minimarket. The biggest challenge is traditional canals such as grocery stores, which have experienced a significant decline in turnover.

Reduced foot traffic and concerns about implementing the Health protocol are big issues for stalls and grocery stores. It is not surprising that there are several initiatives carried out by fast moving consumer goods (FCMG) and / or ready-to-drink beverage businesses aimed at supporting grocery stores to be able to implement good health protocols and of course with the hope that these grocery stores can again experience growth.

The impact of the Covid-19 pandemic is not only felt in the side of community activities that have decreased significantly, but also how people or consumers shop both in terms of what they buy and also why they shop for these products. With more time spent at home, consumers of ready-to-drink beverage products also experience changes in patterns consumption.

Opportunity for the Industry Beverage

Ready-to-serve drinks are in not principle a primary product, so that when consumers are faced with a condition where they have to choose, ready-to-serve beverage products can easily be abandoned and replaced with other beverage products. This was seen in the early days of the pandemic when ready-to-serve single serve beverage products decreased. While on the other hand, ready-to-serve beverage products with multi serve packaging are encouraged by sales in the hope that they can be consumed together by the family while having activities at home. This is an example of the ways in which ready-to-eat beverage industry entrepreneurs ensure that the products offered are still relevant to changing consumer consumption patterns.

Another thing that can be observed in relation to changes in consumption patterns is the category of ready-to-drink products selected by consumers. In general, all categories of ready-to-serve beverage products experienced a significant contraction in sales during this pandemic. But the level of contraction per category has a difference.

Consumer concern related to the issue of body resistance to fight the potential spread of COVID-19 has more or less affected consumption patterns of ready-to-drink beverage products. Products that are believed to have functional benefits to maintain and increase body endurance are now an option and it can also be seen how strong communication is made by manufacturers to show these functional benefits.

Although the ready-to-serve beverage industry experienced a very significant impact due to this pandemic, on the other hand, it can be seen that the resilience or resistance of the beverage industry business actors to get out of the existing conditions. Sharing efforts and creativity are taken to ensure the industry continues to operate and can grow back soon. On the other hand, the main lesson is how these changes in consumption patterns and consumer preferences have an impact in the medium and long term, even after the Covid-19 pandemic ends.

It is believed that the option of remote working patterns will continue to exist and could become part of new work patterns in the future. Likewise, activities that are generally mass-gathering in the near future may not take place. This means that producers must be able to get closer to the product to consumers, not only in a distributional manner but also from the "reason to purchase" side.

At times like this, the support of all parties, including the government, is expected to be able to help the ready-to-serve beverage industry rise from difficult conditions and even grow back. Support is mainly related to two aspects that are not all under the control of business actors, namely how to maintain consumer purchasing power and how to reduce the burden on the industry in terms mass of certainty of raw material supply and costs. Like a playing strategy, a strong "defense" in this case maintains consumer purchasing power and reduces the burden on producers will provide an opportunity for "offense" to advance and seize opportunities to rise and grow. This is the synergy that is expected to be realized so that the ready-to-serve beverage industry can continue to host in its own country. Rise up and live the fast-food industry in Indonesia.