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Abstract
The food and beverage industry has an important role to play in the Indonesian economy. This industry's contribution to the GDP of the non-oil and gas industry reaches almost 34 percent and absorbs a lot of labor. The purpose of this paper is to analyze the strategy of strengthening the food and beverage industry which can improve the performance and competitiveness of Indonesia's food and beverage industry sector. The approach used is a descriptive approach. The results of the analysis show that for some food commodities have a low competitiveness, while the beverage industry which is dominated by soft drinks and alcoholic beverages, Spirits drinks and Beer has an increasing trend. To improve the competitiveness and performance of Indonesian food and beverage products, the government has carried out several policies, but not yet optimal. The strengthening effort that must be made by the Government is to increase exports to non-optimal markets (Untapped Market Countries). In addition, for the development of small and medium industries, the industrial sector also needs fiscal incentives as well as increased industrial technology capabilities.
Highlights
The food and beverage industry currently has a significant contribution to the Indonesian economy
While the Machinery and Equipment Industry sector grew by 7.49 percent, as well as the Chemical, Pharmaceutical and Traditional Medicine sectors, which grew by 7.36 percent (Statistics Indonesia, 2018)
The food and beverage industry sector currently has an important contribution to the Gross Domestic Product, especially the non-oil and gas industry sector
Summary
The food and beverage industry currently has a significant contribution to the Indonesian economy. In 2016 the food industry experienced growth of 6.95 percent, and contributed, 4.73 percent to GDP. The growth of the food and beverage industry was largely due to the realization of new investments, an increase in people's purchasing power, and the growth of Indonesia's population with an average of 1.49 percent per year in the last 10 years (Statistics Indonesia, 2018). Going forward, the challenges and obstacles of the Indonesian food and beverage industry will continue to increase. With the entry into force of the free market of the Asean Economic Community (AEC), the competition of the food and beverage industry among ASEAN countries has become tighter. Indonesia's food and beverage industry needs to strengthen competitiveness so as to create a healthy business climate
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