Market Overview

The Indonesia alcoholic drinks market is expected to experience steady growth between 2025 and 2033, driven by increasing disposable incomes, growing urbanization, and a rising demand for both local and international alcoholic beverages. Valued at approximately USD 2.1 billion in 2024, the market is forecast to grow at a CAGR of 7.2%, reaching around USD 4.0 billion by 2033. This growth is primarily attributed to the rise in domestic consumption, the growing influence of international brands, and the expansion of the tourism sector, which significantly boosts alcohol consumption in key regions.

Indonesia, as Southeast Asia's largest economy, offers a diverse market with varying regional preferences and cultural attitudes toward alcohol. While alcohol consumption is restricted in certain provinces due to religious and cultural factors, the market continues to thrive in areas like Bali, Jakarta, and Surabaya, where demand for alcoholic beverages, especially beer, spirits, and wine, remains robust.

Key Market Drivers

Economic Growth and Rising Disposable Incomes

The ongoing economic growth in Indonesia, with its rising middle class and increased disposable incomes, is a major driver of alcohol consumption. The country’s GDP growth is projected at around 5.1% annually during the forecast period, which will fuel the purchasing power of Indonesian consumers. The increasing number of urban consumers, particularly in Jakarta, Bali, and other major cities, is expected to increase demand for higher-quality alcoholic products, including premium spirits, craft beer, and international wines.

In 2025, it is projected that Indonesia’s urban population will account for approximately 55% of total consumption, representing a shift in demand toward more premium and diverse alcohol products. This urban shift is expected to contribute significantly to the market’s projected value of USD 2.5 billion in 2025.

Influence of the Tourism Sector

Tourism plays an essential role in the Indonesian alcoholic drinks market. With millions of tourists visiting Indonesia annually, particularly in Bali, Jakarta, and Yogyakarta, alcohol consumption is heavily linked to the hospitality sector. In 2024, Indonesia welcomed over 15 million international tourists, a figure that is expected to grow by 6% per year, further driving alcohol sales in hotels, restaurants, bars, and clubs.

The growth of the tourism industry directly impacts both on-trade sales (alcohol consumed in public venues like bars and restaurants) and duty-free sales in airports and high-end tourist areas. In 2025, the on-trade sector is projected to account for about 45% of the total market, contributing approximately USD 1.1 billion to the market’s revenue. As more international visitors flock to Indonesia, particularly to popular destinations such as Bali, the demand for imported alcoholic beverages like spirits, wine, and beer will continue to rise.

Cultural Acceptance and Regional Preferences

Indonesia's market for alcoholic drinks is influenced by cultural and religious factors. As the world’s largest Muslim-majority country, alcohol consumption is prohibited in many regions, particularly in Aceh and other parts of Sumatra and Java, where the market is more conservative. However, in regions such as Bali, Jakarta, and Surabaya, which have more liberal drinking cultures, alcohol consumption remains a significant part of social life, particularly among tourists and the urban population.

Bali has emerged as the focal point for alcohol consumption in Indonesia due to its status as a global tourist destination. In 2024, Bali alone accounted for about 15-18% of Indonesia's total alcohol sales, and this share is expected to increase as the island attracts more international tourists seeking diverse dining and nightlife experiences.

Premiumization of Alcohol

There is a growing trend toward the premiumization of alcohol in Indonesia, particularly in urban areas where consumers have a higher disposable income. As middle-class consumption rises, there is a greater preference for premium spirits, craft beer, and high-quality wines. The demand for premium whiskey, gin, and vodka is increasing, especially among young, affluent consumers who are more willing to pay a premium for international brands and unique flavors.

In 2025, the premium alcohol segment is projected to contribute around USD 800 million, or approximately 32% of the total alcohol market, with a significant portion driven by urban, young, and professional consumers. This shift toward premium alcoholic products is expected to continue through 2033, contributing to the market’s projected growth.

E-Commerce and Changing Retail Landscape

The rapid adoption of e-commerce in Indonesia is transforming how alcohol is sold. As more consumers turn to online shopping for convenience, online retail platforms like Tokopedia, Lazada, and Shopee are seeing increased sales in alcoholic beverages. This is particularly important for reaching consumers in regions where alcohol consumption may be more restricted in physical stores.

E-commerce’s influence on the market is expected to increase as more alcohol brands leverage online platforms to engage with consumers. By 2025, e-commerce is expected to account for 10-12% of the total alcohol market, contributing about USD 250 million in revenue. This trend is likely to continue as the convenience of online shopping, along with the growing popularity of home delivery services, drives further market penetration.

Health-Conscious and Low-Alcohol Trends

There is a growing demand for low-alcohol and non-alcoholic beverages as part of a broader health-conscious trend in Indonesia. Younger consumers, especially in urban centers, are becoming more focused on wellness and healthy living, which has led to increased interest in beverages that offer lower alcohol content or functional benefits, such as lower calories or added vitamins.

In 2025, the non-alcoholic beverage segment is expected to account for approximately 4% of total alcohol sales, which is projected to grow to 7% by 2033. This shift toward health-conscious drinking will also include the rising popularity of low-calorie beer, non-alcoholic wine, and functional spirits.

Market Segmentation

By Product Type:

• Beer:  The largest product category in the Indonesian alcoholic drinks market, with both local brands like Bintang and imported brands like Heineken and Budweiser. Craft beer is gaining popularity in urban areas and among tourists.
• Spirits:  Whiskey, vodka, rum, and gin are the primary spirits consumed in Indonesia, with a growing demand for premium spirits and international brands.
• Wine:  Wine consumption is relatively low compared to beer and spirits but is steadily growing, particularly in urban centers and among expatriates.
• Ready-to-Drink (RTD) Beverages: Pre-mixed cocktails and canned alcoholic beverages are gaining popularity, particularly among younger consumers who seek convenience.

By Distribution Channel:

• On-Trade:  The on-trade sector remains a crucial part of the market, driven by the hospitality and tourism industries. Hotels, bars, restaurants, and nightclubs play a key role in alcohol sales, especially in tourist-heavy regions.
• Off-Trade:  Sales through supermarkets, convenience stores, and e-commerce platforms are becoming increasingly important, with online retail expected to grow in the coming years.

By Consumer Demographics:

• Tourists: International visitors, especially from Asia and Australia, are significant contributors to alcohol consumption in the on-trade sector.
• Expatriates: The expatriate population in Indonesia is a key demographic for both local and international alcoholic drinks, particularly in urban and tourist areas.
• Local Consumers: The growing middle class in Indonesia is driving demand for premium alcoholic beverages, particularly in metropolitan areas like Jakarta and Surabaya.

Competitive Landscape

The Indonesian alcoholic drinks market is competitive, with a mix of local and international players:

• Bintang (Local beer brand) 
• Heineken (Global beer brand) 
• Carlsberg Group
• Diageo 
• Pernod Ricard 

Future Outlook

The Indonesia alcoholic drinks market is expected to continue growing steadily from 2025 to 2033, with key factors driving this growth including:

• Economic development and urbanization leading to increased alcohol consumption, especially in premium and international categories.
• Tourism growth and hospitality expansion driving on-trade alcohol consumption, particularly in tourist-centric regions like Bali and Jakarta.
• Health-conscious trends resulting in growth for low-alcohol and non-alcoholic beverages.
• The continued premiumization of alcoholic products, particularly spirits and craft beer.

By 2033, the market is projected to reach USD 4.0 billion, with a CAGR of 7.2%. The rise of e-commerce, expanding middle-class consumer demand, and increasing tourism will be key drivers of growth, while regulatory challenges and regional consumption differences may pose hurdles for businesses entering or expanding in the market.

Conclusion

Indonesia’s alcoholic drinks market presents significant opportunities for growth, driven by increasing urbanization, a rising middle class, a growing tourism sector, and evolving consumer preferences. While challenges exist due to regional cultural differences and strict regulations, brands that can navigate these complexities, focus on premium offerings, and tap into the growing e-commerce trend will be well-positioned to succeed in this expanding market.