Nutrient labeling system holds potential to transform Indonesia's F&B industry - GlobalData

Indonesia is set to introduce a nutrition grading system akin to Singapore’s Nutri-Grade to deliver more detailed information to consumers concerning the nutritional values present in food and drink products. A survey corroborates this trend, where 84% of Indonesian respondents stated that their product purchasing decisions are either extremely or quite influenced by the ability to access ingredients and nutritional information via a quick response (QR) code on the packaging*. As such, Indonesia’s proposed labeling system, Nutri-Level, holds potential to play a pivotal role in transforming its domestic food and beverage (F&B) industry, says GlobalData, a leading data and analytics company.

Mani Bhushan Shukla, Consumer Analyst at GlobalData, comments: “The purpose of nutrition labeling systems, including daily intake guidelines, warning indicators, traffic light systems, star ratings, and nutrition scores, is to facilitate informed consumer choices and encourage a shift towards healthier food selections. These systems classify food and beverages by assessing their sugar, fat, sodium, and energy levels in their compositions.

“The use of standardized grading systems featuring colors, symbols, and vectors enhances readability for consumers, offering a clearer understanding than the detailed ingredient lists on product packaging. In addition, as these gradings/rankings are defined, they are more straightforward than the myriad of health and natural claims that food manufacturers often use. Some of these claims can be deceptive; for instance, a product labeled as ‘no-added sugar’ may still contain ingredients high in natural sugars like fructose.”

Deepak Nautiyal, Consumer and Retail Commercial Director, Asia-Pacific and Middle East, GlobalData, adds: “The prevalence of diet-related diseases, particularly diabetes and hypertension, is notably high in Indonesia, which underscores the potential benefits of the Nutri-Level system for public health. The 2018 Basic Health Research (Riskesdas) reveals that diabetes prevalence stands at 10.9%, while hypertension affects 34.1% of the population. Nutri-Level in Indonesia will implement a rating label that evaluates sugar, saturated fat, and various nutritional components. The finalization of the draft regulation is anticipated to occur by the end of 2024.”

Shukla notes: “By encouraging manufacturers to innovate and craft healthier products that do not sacrifice flavor, it can effectively respond to the rising consumer preference for nutritious choices. This transition towards healthier alternatives can significantly benefit public health and bolster the industry’s reputation and market share.”

Nautiyal continues: “Despite the promising outlook of the Nutri-Level system, the Indonesian population may encounter various obstacles. Resistance from the F&B industry poses a notable obstacle to the implementation of this regulation. Large manufacturers may perceive the regulation as a threat, especially since many of their products are high in sugar and saturated fats, which could lead to negative ratings. Thus, it is imperative for the government and industry to collaborate in order to reach a solution that serves both interests.

“An additional challenge lies in educating and socializing the public regarding this rating system. A large portion of the population may still be unfamiliar with it. Consequently, it is essential for the government to effectively promote Nutri-Level, ensuring that the public comprehends and can utilize the information from this nutrition label to make healthier choices.

“The successful implementation of Nutri-Level relies heavily on collaboration among the government, industry, and community. The government has a role in providing effective regulations and education, the industry must adapt and innovate accordingly, and the community needs to accept and utilize the system to create a substantial positive effect on public health. In Singapore, the Nutri-Grade nutrient labeling system is in place, while both Malaysia and Thailand have implemented a voluntary Guideline Daily Amount (GDA) label along with the Healthier Choice Logo. Conversely, the Philippines has chosen to adopt only the voluntary GDA system.”

Shukla concludes: “Efforts are underway by authorities to rectify the shortcomings in the rating systems, especially regarding the complexities involved in comparing different product categories across each system. The F&B industry may push back against these measures, as the presence of multiple nutrient labeling systems across borders will likely lead to increased expenditures in procurement, research and development, and production. Standardizing regulations across the Asia-Pacific region will drive F&B manufacturers to optimize their operations, allowing them to offset higher costs through economies of scale.”

*GlobalData Q4 2023 Consumer Survey­ – Indonesia, published in December 2023, with 531 respondents