Case Study – Australian jams the condiment of choice in luxury Indonesian hotels: Beerenberg
Identify a niche market
Beerenberg’s entry into Indonesia was through its miniature jars of jam sold to five-star hotels. It was already exporting to Singapore, Japan and Hong Kong when it struck an agreement with Jakarta food distributor Masuya Graha Trikencana.
Managing director Anthony Paech says Indonesia was chosen with a specific market in mind: holidaying Australians in Bali.
For the small, family owned business, niche exports make more sense than mass-market brand building. By earmarking Australians in the popular Indonesian resort destination, the Beerenberg brand was already on familiar ground.
“We were looking for [export markets] that would work well for us. Australian tourists want a local product they are familiar with. They love that taste of home, and the hotels welcome being able to offer their guests premium exported products,” Paech says.
Invest in building relationships
Paech insists the longstanding relationship with Masuya – he met the company’s owners at a food industry trade show in Singapore – has been critical to Beerenberg’s success in Indonesia.
“Having people you can trust and work with is absolutely vital. If you’ve got a solid relationship of trust you’re halfway there,” he says. His advice to Australian companies wanting to do business in Indonesia: once you find that local partner, listen.
“If you’re not trusting what they’re telling you, you can waste a lot of money trying to get things right.”
Understand local regulations and government requirements
Paech says Masuya has been invaluable in helping Beerenberg to navigate government bureaucracy.
On one occasion the Indonesian government unexpectedly launched a crackdown on food labelling, enforcing largely dormant laws requiring foreign food labels to conform to local language and product specification requirements.
Until then Beerenberg was using its Australian labels.
“That would have been a big issue for us if we had to firstly understand the government requirements and then to comply with them. It made all the difference having our distributor on the ground. And it wasn’t just the labels. It was also customs rules and what’s printed on the cartons,” Paech says.
“I’ve been lucky to have been shielded from some of the more difficult discussions with government.”
Tailor products to the tastes of Indonesia’s expanding middle classes
Beerenberg is planning on further inroads into Indonesia. The surging Indonesian economy and a boom in foreign tourism means more hotels and resorts to buy Beerenberg’s jams, honey and sauces.
Indonesia’s expanding middle class also has an appetite for premium food products and Beerenberg products are now available in Jakarta supermarkets. Paech visits Jakarta twice a year to meet with his distributor, get to know sales staff and keep himself abreast of consumer tastes.
“It’s about maintaining the relationships and about staying relevant. For us to have products that Indonesian consumers want to buy we have to visit the market and really understand its consumers,” he says.
“If you can get a foothold in Indonesia, it’s really worth it.”
Beerenberg has annual revenue of $19 million. Exports account for 15 per cent of sales.
Extracted from the Asialink Business Indonesia Country Starter Pack, part of a new suite of practical and comprehensive Asia business guides.
Asialink Business is Australia’s National Centre for Asia Capability and works to build an Asia capable Australian workforce by supporting businesses in all sectors to develop the critical skills, knowledge and networks needed to better understand and engage with Asia.