Consumption data is drawn from the Household Food Expenditure and Consumption Surveys reported in national socio-economic household survey (SUSENAS) conducted by the Bureau of Statistics (BPS). BPS conduct surveys of large numbers of households nationwide (75,000 in 2011) and reports on household expenditures and quantities both in and out of home on a weekly basis.

Household total protein intake increased with national economic recovery from 1999 to 2002 (Figure 5). Intake from fish and eggs/milk increased over the 2000s while intake from cereals decreased. Protein intake from beef also grew from 1999 to 2002, but stagnated thereafter, including in 2012. This appears to be due to increases in the price of beef (see Figure 7). As a reflection of this, expenditures on meat increased from Rp7,100 per month per capita in 2008 to Rp10,370 in 2010, Rp11,000 in 2011 and Rp13,100 in 2012 (DGLAHS, various years).

Figure 5. Household protein intake by selected food groups in Indonesia, 1999 and 2002-2012

Source: SUSENAS, BPS reported in DGLAHS (various years)

Figure 6 breaks down the composition of the meat group through a snapshot of meat consumption in 2012. The data disaggregates between four major meat types: “preserved meat”; “offal and bone”; “meals”; and “fresh meat”. The data also further disaggregates within these meat types.

Figure 6. Annual per capita consumption of meat products in Indonesia, 2012 (kgs)

Source: SUSENAS, BPS reported in DGLAHS (2013)

The greatest proportion of meat purchased by households is called “fresh” (which actually means meat that is fresh, chilled or frozen, but not transformed) and cooked at home. Poultry is by far the most consumed meat, followed by beef at a distant second. Fresh beef accounts for just 0.4kg per capita per year and levels declined from 0.57kg in 2002 and 0.42kg in 2007.

Reported figures of fresh meat consumption do not represent absolute beef consumption in Indonesia for several reasons. First, SUSENAS surveys may under-estimate consumption for methodological reasons (respondent recall and knowledge) (Subakti, 1995). Second, a large proportion of beef is consumed in the form of meals and falls into the meat “meals” category (e.g. soups, soto, gule, rawon, sate, tonseng, goreng, bakso). If beef accounts for (say) one half of the meat used in meat “meals” (Figure 6), then meat consumption increases to 1.3kg/person/year. This figure resembles the “per capita availability” of beef of 1.4kg in 2010 that is calculated by DGLAHS annually (based on FAO Food Balance methods).

With this background in mind, questions arise about the determinants of beef demand into the future. Consumption studies provide some insights, including Hutasuhut et al. (2001) that draw on SUSENAS data. Drivers of beef demand include:

• Population growth of 1% per year, though based on figures above this would increase beef consumption by just 3,500 tonnes per year.
• An urbanisation rate of 1.7% per year, which is significant given findings of Hutasuhut et al. (2001) that expenditure elasticities for beef are higher in urban areas than in rural areas.
• Growth in per capita incomes, which is significant given findings of Hutasuhut et al. (2001) that expenditure elasticities for beef are positive (but lower than chicken).
• The high price of beef in Indonesia constrains consumption. Hutasuhut et al. (2001) find that own-price elasticities for beef are negative (but inelastic compared to chicken, suggesting that beef has fewer close substitutes).
• Positive cross-price elasticities suggest that chicken is a substitute for beef (i.e. if the price of the chicken increases the quantity of beef demanded will increase).

There are three major types of retail channels: wet markets, supermarkets and butcher shops. While the outlets retail and purchase beef differently, there are not always implications for upstream demand and actors, especially back to cattle production level. Wet markets account for the vast bulk of beef sales.

Stallholders in wet markets are specialised in selling beef, and often different types of beef products. Stallholders get supply from butchers, through close working relationships and often family and community relationships. Of the beef buyers at wet markets, perhaps 60% are household consumers, 30% are meatball and soup stallholders/peddlers (in Java where meatballs are popular) and 10% are restaurants and supermarkets (Hadi et al., 2002). For a recent account of retail and slaughter structures in EJ see Mahendri et al. (2012).

Beef sold through “modern” channels accounts for small proportion of overall beef sales (3% for Indonesia as a whole in the early 2000s, Hadi, 2002). Supermarkets are thought to be increasing their market share (Sullivan and Diwyanto, 2007; Morey, 2011) but little data is available to quantify volumes. The Modern Retailer Association (APRINDO, cited in Morey, 2010) estimates that ‘modern’ retailers sell just 12,700 tonnes of beef per year, of which hypermarkets and supermarkets account for about 50% each. Volumes are much lower in EI, as supermarkets are only prevalent in big developed cities.
The impact of growth in the supermarket sector on upstream activity or actors is often and easily exaggerated. Most (not “high end”) supermarkets buy beef from wet markets, or slaughter channels that are exactly the same as beef that is supplied (by wholesalers) into wet markets and don’t apply distinct demands or standards beyond cut differentiation. Supermarkets further butcher, trim, package, label and present beef in cabinets, and can refrigerate beef, and mark up prices for the services they provide. However, as they don’t purchase through distinct channels with different price-grade structures, there are few implications for chain structure or upstream, especially back to primary production level. However, supermarkets derive beef from legal, certified slaughter houses, and sell hygienic beef. Several high-end abattoirs have established formal supply channels with supermarkets and food wholesalers, which is significant.

There are dedicated meat shops in most provincial capital cities and some district capital cities. In regional cities where there are no supermarkets, butcher shops are the outlet for more hygienic and better presented beef. The full range of beef and beef products are sold at prices similar to those at supermarkets to household customers. The share of beef sold through meat shops in a given city is small, perhaps similar to supermarkets.