Author: Mei Ling Tan

Andrew Bell, director of Mountain Blue Farms in northern New South Wales, says the successful family-owned blueberry operation had been looking for export opportunities to expand beyond the domestic market, and eventually settled on Indonesia.

The country has a population of more than 255 million, making it a potentially important market.

“Indonesia has a significant population, right on our doorstep,” says Bell, whose company also runs its own breeding operation. “They also have a rapidly growing middle class who are a food and health conscious, and there happened to be existing protocols for getting blueberries into Indonesia.”

He says the typical agribusiness approach into Indonesia had either been about bulk supply (wheat, sugar), or it had entailed lower grade fruit and vegetables for specific markets.

“We saw a different market,” says Bell. “We wanted to be in the quality supermarkets that are being built for the middle classes. We have a premium product and that’s what we wanted to sell in Indonesia. We didn’t want to compromise on what we do.”

The company representatives spent a week in Indonesia in early 2017, meeting supermarket operators, wholesalers and distributors.

“They all dealt with Australian food imports, and their view of our produce was the clean and green image. It’s our image up there and that’s what the Indonesian operators are selling to consumers.”

Health benefits

It turns out that blueberries are a middle class food because of the number of health benefits associated with them. And with the Indonesian middle class already estimated at 50 million – and growing – that represented a market worth being involved in.

The key, he says, was finding the right partners, which came in the form of a food distribution outfit in Java that was prepared to make specific recommendations about the Indonesian palate.

“Blueberries come in many shapes and sizes,” says Bell. “The Indonesian palate goes for a large, crunchy, sweet blueberry.”

Blue Mountain Farms has a breeding operation in Tabulam – on the Clarence River – and they set about breeding the Indonesian blueberry.

Those samples are being fed into Indonesian supermarkets next month but the early feedback from the distributors has been positive.

“It’s a very large market, for a product we can perfect and grow in regional Australia. We employ around a thousand people in the season and a core of between 60 and 70 staff, and we have a network of growers around the country who we use.”

Bell says the chance to secure a foreign market is good for agribusiness employers and the towns they operate from. He also says that Indonesian business people are easy to deal with.

“They know what they want and they know what works,” says Bell. “That makes it so much easier for us.”

New tastes

AsiaLink Business CEO Mukund Narayanamurti, says the example of Mountain Blue Farms is not an isolated one in Indonesia, as the health-conscious and food safety-aware middle classes of Indonesia develop new tastes for food.

“The main food trade out of Australia into Indonesia is wheat, sugar, live cattle and boxed beef,” says Narayanamurti. “But this is large-scale or commodity trade. When the middle classes are growing – as they are very aggressively in Indonesia – you see rising demand for value-add premium foods, and for fresh fruit and vegetables.”

He says Australia has a reputation in south-east Asia for its agricultural output, plus the Australian image for processed and value-add foods is one of quality.

The demand from Indonesia is not only because middle class people have more disposable income, and higher standards for what they feed themselves and their children, says Narayanamurti. He says there are also new supermarket chains being built through urban Indonesia, where the value-add and premium foods are being sold.

“In the Indonesian supermarkets there are Australian cherries, broccoli, avocados, Brussels sprouts, citrus fruits and kale.”

He says Indonesia’s rising wealth and expectations is dramatic and the country is estimated to have a size of middle class in the world Top 10 by 2020. With the rising wealth comes the rising consumption of quality protein – Australian meat and dairy – and a focus on eating healthy and eating safe.

Export opportunities

Narayanamurti says one of the main reasons for Australian agribusiness operators to keep an eye on Indonesia is the export market itself.

Australia’s involvement in the NZ-Australia-ASEAN zone gives exporters access to reducing-to-zero tariffs on beef, wheat and cheese and other trade goods that will be reducing.

“The bigger picture is that this trade area covers 600 million people and a market of $US2 trillion ($2.6 trillion),” says Narayanamurti. “There is a trade liberalisation program meaning you’ll be able to land goods in one country and find it much easier to distribute them to other countries.

“It’s early days in the south-east Asian market, but Australian agribusiness operators should be developing products and services that have cross border application, as the Australian breeding services and feedlot operators are already doing in the livestock sector.”