Indonesia’s Evolving F&B Industry: Amidst the pandemic, the F&B industry emerged as one of the most resilient sectors through digitalization

Vertex SEA | 14 Jun 2022

By Dyota Marsudi, Senior Executive Director | Khushbu Topandasani, Investment Associate | Selina Koharjo, Investment Analyst

(This is an updated version, the first was published on 28 April 2021)

“What should I eat today?” That is a daily question we ask ourselves and for many, the answer is the highlight of our day. For most Indonesians, it is normal to hitch a ride to a restaurant and enjoy a meal. As the foodie scene evolves, we noticed F&B spending has taken up about 30 to 40 percent wallet share in Indonesia1. Moreover, based on a Mondelez2 research report, 1 in every 3 Indonesians have a habit of snacking more than 3 times a day.

2020 was definitely a tough year for most of us. However, looking on the bright side, we were lucky to enjoy the perks of working from home -- such as tantalising our taste buds with new flavours in Indonesia. In a blink of an eye, the year-long pandemic has redefined dining trends in the F&B industry. For Indonesians, spending more time at home during the pandemic meant ordering more food deliveries. According to a study by Momentum Works, Indonesia’s food delivery services saw strong growth in 2021, posting a growth rate of 24.3% with the gross merchandise value (GMV) increasing to USD$4.6 billion from US$3.7 billion in 2020. Given these changes, we are excited to explore this dynamic industry.

Indonesia’s growing F&B market

With approximately 203 million internet users and a 16% growth from last year4, the Internet has provided Indonesians access to different services. One of the beneficiaries is the F&B industry. The consumer food service industry in Indonesia is estimated to be at USD 42B5 with strong growth in online channels. In the last four years, online channels have been growing at least 5x more than offline channels6. With the accelerated usage of delivery services coupled with high social media engagement, we began developing a conviction towards this sector.

ImgSource: <a href="" target = "_blank" rel=”noopener noreferrer”>Euromonitor. 2021, Consumer Foodservice in Indonesia, Goldman Sachs. 2020, Indonesia Internet: The Fight to Unite the Verticals

Establishment of food delivery platforms

One of the changes within the F&B industry includes the establishment of food delivery platforms. Users today have an option to purchase meals via platforms such as <a href="" target="_blank" rel=”noopener noreferrer”>GrabFood or <a href="" target="_blank" rel=”noopener noreferrer”>GoFood. This in turn has changed the way consumers are being exposed to food brands.

For starters, in 2019, consumers opening GrabFood or GoFood would typically search for food brands by typing into the search bar. Today, we scroll. Food merchants are recognizing these changes and through integration with food delivery platforms, they are opening new pathways for consumers to discover their food brands.

In addition, we believe the establishment of food delivery platforms has intensified the competitive landscape and created more opportunities for SME players. Food delivery services have widened access to F&B brands and allowed these brands to achieve scalability. Small players with few outlets can now achieve greater accessibility and target a wider audience. As availability to customer is key, consumers are satisfied with the ample food and beverage choices today.

GoFood was first launched in March 2015 and GrabFood subsequently in May 2016. Since then, the two food delivery platforms have gone a long way. In the past, merchants did not integrate their systems with delivery platforms. As a result, riders would manually place an order and wait for the food upon reaching the merchant’s store. With the growing adoption of delivery platforms and digital payments, more merchants are willing to integrate their systems with these apps allowing orders to be sent directly to a restaurant and meals being prepared before the rider arrives. This resulted in a quicker turnaround time.

Based on Gojek’s internal statistics, Indonesians have quickly adapted to food delivery. From 2018 to 2020, Gojek has more than doubled the number of GoFood users7 while achieving a CAGR of almost 30% for the number of merchants onboarded8. Both Grab and Gojek have highlighted the industry’s lucrativeness, hence it is no surprise e-commerce giants, <a href="" target="_blank" rel=”noopener noreferrer”>Shopee and <a href="" target="_blank" rel=”noopener noreferrer”>Tokopedia, have joined the race. With Shopee Food launched this year, it will be exciting to watch the competition of food delivery platforms opening more opportunities in the F&B industry.


Source: <a href="" target="_blank" rel=”noopener noreferrer”>, 11 Feb 2020 and <a href="" target="_blank" rel=”noopener noreferrer”>, 15 Sept 2020

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Modernization of Indonesian taste

Due to consumers’ easy access to food delivery platforms, a growing number of new F&B players are challenging existing players and filling existing gaps in the market. Although many Indonesians’ comfort meals are rice dishes, majority are unable to name any local food brand. In fact, most Indonesians will eat unbranded local dishes wrapped in brown paper and sold at street stalls called wartegs. With about 40,000 wartegs alone in the Greater Jakarta area9, it is no surprise that wartegs is one of the most popular local food options.

ImgSource: Wahoo

Despite the popularity of wartegs, the younger generation are becoming more selective and prefer higher quality food choices. As a result, we notice new F&B brands are specializing in local Indonesian cuisine today. These upcoming brands are affordable, appeal to the masses, and readily available on delivery platforms while maintaining food hygiene. More than that, the modern Indonesian F&B brands use refined ingredients and create an attractive packaging. Gone are the days where meals wrapped in brown paper are the norm. Today, Indonesian meals are replaced with eye-catching designs and easily delivered to consumers. Unlike established players, modern Indonesian F&B brands aim to revitalize the taste of Indonesian cuisine.

Evolution of the F&B industry

Existing and new players are adapting to the prevalence of food delivery platforms. Accelerated by the pandemic, we discovered two emerging trends:

ImgSource: Vertex Ventures SEA & India Internal Analysis

Trend 1: Cloud Kitchens

Riding on the growth of food delivery platforms, cloud kitchens have become a viable solution for F&B merchants to scale. Cloud kitchens are commercial kitchen spaces that focuses on delivery meals and are integrated with food delivery platforms. Despite this definition, different types of cloud kitchens exist.

  • Food court model: This segment’s providers rent commercial area and offer shared kitchen spaces. As this is a pure real estate play, the providers are typically brand agnostic. In Indonesia, the food court model has been embraced by Super Apps – Grab and Gojek. For brands that are in either Grab’s or Gojek’s cloud kitchen, they can only be integrated in either platforms.

  • Kitchen operator model: This segment’s providers do not offer any commercial area or equipment. Instead, companies will handle marketing and cooking operations. Merchants will only provide its’ pre-cooked meals to these providers that handles the end-to-end process.

  • Hybrid cloud kitchen model: This segment’s providers will offer kitchen area for rental, and also launch their own in-house brands. As the cuisines of these in-house brands may conflict with prospectus brands, these providers may be more selective in offering rental services to certain players.

Cloud kitchen models stimulate novice F&B players to start their entrepreneurship journey with minimized risk. An insider source from Grab Kitchen mentioned about 75% of F&B brands using their services are SMEs.

Trend 2: Online Branded Restaurants

Beyond establishing cloud kitchen models, we notice an emerging trend in new F&B players marketing primarily via online channels.  This brand building model leverages cloud kitchens to launch new F&B brands and experiment on new recipes. Most entrepreneurs can easily discover their product-market fit by simply launching and testing their food products.

Traditionally, opening an outlet can cost USD 75,000 up to USD 450,000 with an average pay back period of above 12 months. This high-risk investment has resulted in entrepreneurs being more cautious with trying something new. However, by using cloud kitchens, the F&B brands can collect demographic information without sticking to a fixed location. Instead, these brands have the flexibility to change locations and alter menus to better target audience’s preferences. As a returning consumer, we are more than happy to try out new brands that are readily accessible and available online.

Since the pandemic, our Vertex Ventures SEA & India team have been watching this space.

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1. Neurosensum. Emerging Consumer Trends in Indonesia, 6 Sept. 2018.

2. Independent Observer. Mondelez Internationals Studies on Snacking Habits and Trends in Indonesia. 13 Dec. 2019

3. Eloksari, Eisya A. “Food Deliveries, Online Game Purchases up as People Stay at Home during COVID-19 Pandemic.” The Jakarta Post, 20 Mar. 2020

4. Herman. “Indonesia Has 197 Million Internet Users in 2020, APJII Survey Shows.” Jakarta Globe, 9 Nov. 2020,

5. Euromonitor. 2021, Consumer Foodservice in Indonesia

6. Goldman Sachs. 2020, Indonesia Internet: The Fight to Unite the Verticals.

7. Jatmiko, Bambang Priyo. “Tahun 2019, Jumlah Pelanggan GoFood Naik Dua Kali Lipat Halaman All.”, Kompas, 11 Feb. 2020

8. Jatmiko, Bambang P. “Sejak Diluncurkan, Jumlah Pengguna GoBiz Untuk Mitra UMKM Gojek Meningkat Lebih Dari 500.000.”,, 15 Sept. 2020

9. Patnistik, Egidius. “Jumlah Warung Tegal Di Jakarta Berkurang Sejak 2019.” Kompas, 12 Nov. 2020

10. Colpaart, Ashley. “Everything You Need to Know About Cloud Kitchens (Aka. Ghost Kitchens) in 2020.” The Food Corridor, 6 Dec. 2019

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