Development and Challenges in the

Fruit Beverage Industries Farchad Poeradisastra

Chair of ASRIM

(The Association of Indonesian Soft drink Manufacturers)

Practitioner experience in running and developing entrepreneurship in the fruit beverage industry, as well as challenges faced and the problem-solving efforts

HISTORY OF FRUIT JUICE INDUSTRY IN INDONESIA In Indonesia, fruit juice industry starting

in early of 1960-ies. Mostly small medium entreprises. Starting with CV Karya Kita, passionfruit juice processor with brand Bintang Dunia and Bola Dunia in 1962, in Makassar, South Sulawesi.

This company still exist in the second generation, Mr. Philip Rumondor Karundeng. He develop the business from his father. In 1965 he founding fruit juice processor association, APSARI.

In Large scale juice business, in early eighties, there is three company running chilled juices, such as Sunfresh, Sunripe and Diamond.

For kids juice there is Caprisonne, ABC and Buavita with 250 ml size pack.

Mostly their main market is modern market (retail outlet), except Sunfresh more focus in Horeca market (Hotel-Restaurant-Catering and Cafe.

SunfreshJuiceIndustry

CV KARYA KITA

Fruit Juice = High Nutrition Content,Healthy in Body, and Fresh in Mind

FRUIT JUICE Fruit juice is the unfermented but

fermentable liquid obtained from the edible part of sound, appropriately mature and fresh fruit or of fruit maintained in sound condition by suitable means including post harvest surface treatments applied in accordance with the applicable provisions of the Codex Alimentarius Commission.

Some juices may be processed with pips, seeds and peel, which are not usually incorporated in the juice, but some parts or components of pips, seeds and peel, which cannot be removed by Good Manufacturing Practices (GMP) will be acceptable.

The juice is prepared by suitable processes, which maintain the essential physical, chemical, organoleptical and nutritional characteristics of the juices of the fruit from which it comes. The juice may be cloudy or clear and may have restored1 aromatic substances and volatile flavour components, all of which must be obtained by suitable physical means, and all of which must be recovered from the same kind of fruit. Pulp and cells2 obtained by suitable physical means from the same kind of fruit may be added.

A single juice is obtained from one kind of fruit. A mixed juice is obtained by blending two or more juices or juices and purées, from different kinds of fruit.

HOW TO MAKE A JUICE?

1. Fruit juice directly expressed by mechanical extraction processes.

2. Fruit juice from concentrate by reconstituting concentrated fruit juice defined in Section 2.1.2 with potable water that meets the criteria described in Section 3.1.1(c).

2.1.2 CONCENTRATED FRUIT JUICE Concentrated fruit juice is the product that complies

with the definition given in Section 2.1.1 above, except water has been physically removed in an amount sufficient to increase the Brix level to a value at least 50% greater than the Brix value established for reconstituted juice from the same fruit, as indicated in the Annex. In the production of juice that is to be concentrated, suitable processes are used and may be combined with simultaneous diffusion of the pulp cells or fruit pulp by water, provided that the water extracted soluble fruit solids are added in-line to the primary juice, before the concentration procedure. Fruit juice concentrates may have restored1 aromatic substances and volatile flavour components, all of which must be obtained by suitable physical means, and all of which must be recovered from the same kind of fruit. Pulp and cells² obtained by suitable physical means from the same kind of fruit may be added.

2.1.3 WATER EXTRACTED FRUIT JUICE Water Extracted Fruit Juice is the product

obtained by diffusion with water of: - Pulpy whole fruit whose juice cannot be

extracted by any physical means, or - Dehydrated whole fruit. Such products may be concentrated and

reconstituted. The solids content of the finished product

shall meet the minimum Brix level for reconstituted juice specified in the Annex.

2.1.3 WATER EXTRACTED FRUIT JUICE Water Extracted Fruit Juice is the

product obtained by diffusion with water of: Pulpy whole fruit whose juice cannot be

extracted by any physical means, or Dehydrated whole fruit.

Such products may be concentrated and reconstituted.

The solids content of the finished product shall meet the minimum Brix level for reconstituted juice specified in the Annex.

ASRIM – THE ASSOCIATION OF INDONESIAN SOFT DRINK MANUFACTURERS

Soft Drinks Beverages Non Alcohol is, both carbonated and non carbonated. Soft drinks (soft drinks) is a beverage prepared in powder or liquid containing food material and / or other additional materials whether natural or synthetic that is packed in containers ready for consumption.

Classification of Soft Drinks consist of: Juice drinks Carbonated Drinks Drinks Bottled Drinking Water (drinking water) Ready to Drink Tea Beverage Coffee & Milk Ready to Drink Isotonic Drinks/Energy/Supplements

TYPE OF SOFTDRINK-1

Fruit Juice Buavita Country Choice Heinz ABC Minute Maid Berri Diamond & Jungle Love Juice Sunkist Sunfresh Sunripe + Sunrise Caprisonne

Carbonated Softdrink Cocacola, Fanta, Sprite Pepsi Cola, Shandy RC Cola Big Cola 100 Plus others

SOFTDRINK 2

AMDK (Still Water)

AQUA/VITPRIM-APURE LIFEEQUILOASISADESPURENCEO2PERRIER

Isotonik

MIZONE VITAZONE POCARI

SWEAT FATIGON

HIDRO

SOFT DRINK-3 RTD Coffee &

Milk RTD Tea

SOFT DRINK GROWTH TREND IN INDONESIA

Health and nutrition in Indonesia, the current soft drinks in terms of volume is dominated by drink bottled drinking water which reaches 84% market share of total fast food market.

Carbonated Soft Drinks tend to stagnate, either because of the many other beverage options, as well as rumors overwritten health problems. Until now, carbonated beverages have a market share of 3.6%.

While the significant growth of other beverages outside of Bottled Drinking Water is: Isotonic Drinks, Fruit Juice Drinks and other beverages flavored fruit.

If the 2010 is still the same volume with carbonated beverages, in 2011 and beyond in market share would go beyond it.

Soft Drink Tea still has a very strong market share of 8.9% in 2010. While the trend is still very strong for the developing world, let alone come drink tea with various variants such as carbonated tea, tea contain fruit juice, and other antioxidants, such as Tebs, Fruitea, Frestea, Nu Tea, Tea Chrystinum ABC, Fruit Flavor “Teh Kotak” (Tea Box), Pokka Green Tea, Teh Gelas (Tea Glasses), Tea Flower etc.

45

28

17

22

33

18

23

16

I buy packed food ratherthan unpacked because Ithink it is safer (Strongly

Agree)

I try to think what is good forthe environment when I

choose a product package(Strongly Agree)

I worry about how safe thefood I buy is (Agree

Completely)

I am often concerned aboutwhether refrigerated

beverages have beenproperly stored before I buythem (Agree Completely)

INDONESIA Global Total

Attitudes to Food Safety and Environment(% Strongly/completely agreeing with each statement)

60

21

62

46

58

52

40

47

16

49

33

47

49

51

54

51

50

36

I read labels carefully to find out about ingredients, fatcontent and /or calories

I am interested in food and drink products with addedingredients that have proven medical/health benefits

I am cautious about food and drink products that claim tohave new health benefits

I really enjoy eating and drinking even if I eat and drink toomuch on some occasions

I will not give up taste for fewer calories (Strongly Agree)*

INDONESIA Global Total

Health-related Attitudes to Food & Beverages(% Agreeing with each statement)

TREND PERTUMBUHAN MINUMAN RINGAN

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

RTD Tea

995.2

1046 1110 1218 1327 1439 1554 1672 1792 1914 2047.98

2191.338

6

RTD Carbonates

571.7

588.6

546.7

587.1

611.3

625.7

634.8

642.1

647.9

652.5

698.175000000001

747.047249999998

RTD Water

9897.29999999998

10879.2

11462.8

12073

12837.2

13717.3

14735.18

6

15901.84432

17237.6576383997

18769.504555008

20086.565101609

21496.203313802

Others

264.8

322.2

330.5

440.9

506.5

560 607.014

644.0556

8

679.4423616

711.99544499

2

758.63989839104

808.166036197963

Total NARTD

11729

12836

13450

14319

15282

16342

17531

18860

20357

22048

23591.36

25242.7552

2500.0

7500.0

12500.0

17500.0

22500.0

27500.0

Pertumbuhan Minuman Ringan Siap Saji

Juta L

ite

r

Asumsi tingkat pertumbuhan minimal tanpa mempertimbangkan tingkat inovasi baik dalam jenis, kemasan, merek maupun harga. Sumber Euromonitor diolah oleh ASRIM.

WHAT INDONESIA IS DRINKING SHARE OF THROAT

Almost 38% are hot beverages, such as Hot Tea, Hot Coffee, and Hot Chocolate,

Tea Drinks iced 12% and 50% were ready to eat packaged beverages.

Unfortunately this analysis does not take into account drinking water (either in containers or the results of the household), which is very large (more than 80%) as illustrated in the right graph.

Of the 240 million population of Indonesia at this time, the level of consumption of soft drinks we are the lowest, compared to other Asean countries whose population is far below us. Carbonated drink 33 liters per capita,

53 liters of drinking water per capita, and other beverages even lower. Opportunities are still open for the beverage industry because of the low per capita consumption of soft drinks in Indonesia.

Whereas in Thailand currently has 89 liters per capita,

In Singapore 141 liters per capita, In the Philippines 122 liters per capita.

In 2015 we set a target of 100 liters per capita to rata2 soft drinks. Or in other words, if the growth of Indonesia's population in 2015 has reached 250 million people more, then the target of industrial producers is the consumption of soft drinks per year that can be marketed as much as 25,250 million liters.

But the biggest opportunity for growth in soft drinks (ready to eat) in Untapped Market is the total population of Adolescent and Young Children are great. The population of adolescents and young child is a productive population and potentially have an increased level of disposible income.

BEVERAGE CONSUMPTION LEVEL

OPPORTUNITY As an agrarian country on the equator,

Indonesia is rich in tropical fruits that have a selling value in the global market.

Indonesia ready to compete with other tropical countries that are now highly developed, such as India, Thailand, Malaysia, Philippines and Vietnam?

How is Government policy to encourage fruit processing industry in Indonesia?

What is the role the business community and what obstacles / challenges facing the fruit processing industry of global climate change?

INDONESIAN FRUITS HAVE HIGH ECONOMIC VALUE

Yard Tree

• Sirsak (Soursop)• Delima (Pomegranate)• Nangka (Jackfruit)• Lengkeng (Longan)• Leci (Lychee)• Terong Belanda

(Tamarillo)• Manggis (Mangosteen)• Mengkudu (Noni -

Morinda citrifolia)• Asam Jawa (Tamarind)

Plantation Tree

• Nanas (Pineapple)• Jambu Biji (Guava)• Mangga (Mango)• Markisa

(Passionfruit)• Pisang (Pisang)• Rambutan

(Rambutan)• Jeruk (Tangerine)• Kakao (Cocoa)• Kelapa (Coconut)• Pepaya (Papaya)

TROPICAL EXOTIC FRUITS

EXOTIC FRUITS

Pineapple, Passionfruit, Mango, Banana,Pomegranate, Soursop,

BARRIERS IN FRUIT PROCUREMENT FOR INDUSTRIAL RAW MATERIAL

For Large Manufacture

Only Large capacity equipment available, so that is not possible in small scale production

Supply of fruit can not be outsourced because there are no farmers' land large enough

The opening of a long and expensive land, in addition to the difficulties in getting land because the area North Sumantera many lands that can not be traded

Global Climate Change cause land productivity declines, so the availability of the fruit into very low

SHORTAGE IN FRUIT SUPPLY For Small &

Medium Entreprises

The suitable size of machineries not available

The size and ripeness of fruit not match due supply by small vendor that purchase from farmer

Limited cultivation technique farmer / GAP

Low productivity and limited means of transportation.

Lack of means of cooling units for storage / transportation of fruit

The absence of Partners in each region who can encourage SMEs

TIPE DIPERSAL The pattern of relationships between the

actors and business one another do not have formal ties strong. No association characterized the functional organization among all levels of agriculture upstream and downstream.

Agribusiness network is only bound to the market mechanism, while the perpetrators are between indirect and impersonal. So every actor agribusiness thinking only their own interests

HAMBATAN USAHA KECIL INDUSTRI PENGOLAHAN BUAH

Establish Business Partnership between Small and Medium / Large

•Appropriate Use of Equipment & Simplified Technology•Not to apply GMP & HACCP

•Limited Capital, Heavy Manwork•Less Law Protection•Limited Market accessAbsorb the product by

Large Entreprises

•Wide Open Market Access, •Domestic and Global•Mastering the Legal Aspects of Business•Incorporated in similar Industry Association & Chamber of Trade & Commerce

•Sophisticated Equipment & Modern Technology•Food Safety, •Application of GMP, HACCP, ISO 9001,• Functional Food Fortification

Dipersal type; The pattern of relationships between

the actors and business one another do not have formal ties strong. No association characterized the functional organization among all levels of agriculture upstream and downstream.

Agribusiness network is only bound to the market mechanism, while the perpetrators are between indirect and impersonal. So every actor agri business thinking only their own interests.

SYNERGIC TYPE AND MUTUAL BENEFIT

This type of awareness based on mutual need and support each other on each side that partner. Basisnyanya is a step in the development and advancement of all parties.

In order to strengthen the synergy of each party formed a governing agency cooperation, tasks, responsibilities and rights of each. Also in it arranged a mechanism of mutual protection and benefit of each party.

Inviting the private sector to engage in the empowerment of SMEs is also another way. Often the private sector businesses have the means to empower SMEs.

Able to make SMEs as business partners (not just the beneficiaries), for example, started through a collaboration with SMEs who support or have a business relationship. Of course, such cooperation should provide benefits and opportunities for SMEs and the big business players to further develop itself.

Factors to be challenges in the Development of Processing juice Industry

1. Business climate conditions that have not supported such as:

2. smuggling, legal certainty, a high cost economy, the tax system, customs system

3. Security conditions are relatively stable, yet able to guarantee certainty is a big enough challenge for investment in the industrial sector.

4. Competition among the nations in the world increasingly stringent

5. Economic integration and regionalization of global economy that hit the world at this very affecting world economic order

6. The existence of the world trade organization (WTO), trade and investment liberalization in APEC and the CEPT scheme in AFTA, ASEAN is increasingly dynamic movement of world trade and rapid

1. Fruit Potential mapping program

2. Creation of Superior Clones

3. Improved farming techniquesFacilities and Infrastructure Improvement

4. Sorting fruit tailored to the needs of manufacturing industryProcurement and optimization of cooling unit

5. Partnership program between the farmers with fruit-processing industry

6. Development and application of product standards, GMP and ISO

7. Improving human resources capabilities

8. Program to improve the business climate fruit industry

9. Fruit processing industry development program

10. Improved market access through trade promotion Foreign Affairs

11. Diversifying products and improving product quality in accordance with market demand

12. Reduction of the domestic market distribution chain

13. Provision of low interest venture capital for SMEs

Programs that should be implementedGovernment and Businessin Integrated

Indonesian horticultural sub-sector has a significant contribution to food security for this country.

Production of fruits and vegetables showed an increasing trend; Post-harvest management systems for horticultural products in Indonesia is still not sufficient.

Post-harvest facilities is still very limited, making the constraints on horticultural crops julep. This gives a consequence it takes a lot of equipment appropriate facilities for post-harvest handling. Post-harvest management is also needed by the trained capacity.

The increased contribution of horticulture processing for national economic development will require infrastructure improvements, development of farmer groups and partnerships. Application of appropriate technology, increased awareness of food quality and food safety issues, improving access to credit and the application of GAP, GHP, GMP and HACCP.

There is the right technology at the center of production as demanded by horticulture farmers also needed. Knowledge and expertise on post-harvest control must be developed.

Investment and joint venture program on the processing of agro products and related matters is needed in order to stimulate the development of agro-processing in Indonesia. Foreign investment is lured by the current government policy.

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