The Indonesian soft drink industry has called for coordinated policy measures to maintain sectoral stability in 2025, as early signs of an economic slowdown and weakening consumer demand pose significant challenges to the food and beverage sector.

During a media briefing on Tuesday, the Indonesian Soft Drink Industry Association (ASRIM) and the Center of Reform on Economics (CORE) Indonesia presented recent performance data, economic forecasts, and pressing concerns faced by beverage producers.

According to CORE Indonesia’s Executive Director, Mohammad Faisal, national GDP growth in 2025 is expected to slow to a range between 4.8 percent and 5.0 percent, or potentially as low as 4.6 percent in a downside scenario, below the 5.2 percent target set in the state budget (APBN).

Data from Statistics Indonesia (BPS) revealed Q1 2025 growth of 4.87 percent year-on-year, with a quarterly contraction of 0.98 percent.

Faisal warned that the combination of weaker domestic demand and rising production costs threatens to weigh heavily on consumer-oriented sectors. “These data points signal economic headwinds that we must collectively anticipate. For food and beverage producers, reduced consumption and cost pressures will be a key challenge,” he said.

The Producer Price Index (PPI) for accommodation and food services rose 0.56 percent from the previous quarter and 2.84 percent year-on-year, potentially affecting retail prices and industry margins.

Faisal emphasized the need for prudent fiscal policy. “Preserving purchasing power should be a priority. The introduction of new fiscal instruments must be approached carefully to avoid disrupting recovery momentum,” he added.

Chairman of ASRIM, Triyono Prijosoesilo, confirmed that a downturn in soft drink consumption began in 2023, with early 2025 showing further signs of contraction.

NielsenIQ data for March 2025 showed that non-bottled drinking water (non-AMDK) categories declined by approximately 4.4 percent, a trend that Triyono described as “a strong signal for the need of supportive policy.”

Despite rising prices and economic uncertainty, the ready-to-drink segment remains a key driver in Indonesia’s fast-moving consumer goods (FMCG) sector. Consumers still consider it essential, according to NielsenIQ, but inflation and declining incomes are causing a shift in spending priorities.

CORE Indonesia also noted that the traditionally strong Ramadan and Idul Fitri period failed to lift consumption this year. Real Sales Index (IPR) for food, beverages, and tobacco grew only 1.3 percent in Q1 2025, down sharply from 7.5 percent in the same period last year.

Triyono stressed the importance of open dialogue between the industry and government.

“ASRIM is committed to being a constructive partner. Sound, data-driven policymaking is needed to balance public health goals with industry sustainability, job creation, and the broader FMCG ecosystem that includes many MSMEs (Micro, Small and Medium Enterprises),” he said.

Director of Beverage and Tobacco Industry at the Ministry of Industry, Merrijantij Punguan Pintaria, reaffirmed the government’s commitment. “We continue to support a conducive business climate through both fiscal and non-fiscal measures. Our approach is adaptive and inclusive, ensuring that policy transitions are carefully evaluated and aligned with industrial competitiveness,” she said.

ASRIM concluded that sustainable growth for the soft drink industry in 2025 depends on collaborative governance, with evidence-based policies that address both economic and public health objectives.