The situation of a large population and low per caput consumption of fish products (Table 18) might suggest a considerable potential to expand aquaculture production for the domestic market since in many sectors the dominant capture fishery is widely recognized as fully exploited.
That brackishwater and freshwater aquaculture have failed to expand significantly to meet this “supply gap” attests to the fact that the problem is not simply one of biomass. Consumer preference, income levels and the distribution network remain dominant factors influencing the total and per caput domestic consumption of fish.
The analysis which follows is broad and general as befits the overall directive for the consultancy which is towards the export market potential. It is provided here because some promising forms of seafarming may not be viable if directed solely at the export market, and to provide for a diversification of markets for those where export viability is a reasonable prospect.
In a generalized survey of food consumption patterns in Indonesia, Suryana (1988) illustrated per caput home consumption of animal protein foods for the whole country and the change from 1980 to 1984. He showed that fresh fish product consumption in the home rose from 7.8 to 9.4 kg and exceeded all other listed foods combined. Salted fish was the second most common but decreased from 3.9 to 2.7 kg, followed by eggs, which rose from 1.4 to 2.0 kg. Urban residents consumed more fresh fish than rural residents, 10.8 kg against 9.0 kg, while the reverse was true for salted fish.
The 1987 survey showed continuation of the same trend -rising fresh fish consumption and falling salted/dried fish consumption. The share of expenditure devoted to fish has tended to decline during the 1980s though not as markedly as for cereals. Expenditure share on processed foods doubled.
The same survey confirmed the finding reported by Bailey et al. (1987) that fish consumption is positively correlated with household income. Weekly consumption of fresh products rose from 0.15 kg for consumers whose total (all items) expenditure was Rp 15 000–20 000/month per caput to 0.30 kg for an intermediate expenditure group (Rp 40 000–60 000) and 0.49 kg for the highest expenditure group (Rp 100 000/month or more) among all urban consumers. This suggests an annual per caput consumption at home of approximately 25 kg for the small percentage of higher “income group” consumers. This group forms 52.7% of the urban population of 44 million (BPS, 1989b); the urban intermediate and higher groups numbered 10.8 million nationally.
A survey of 455 consumers in the Jabotabek area (broadly Jakarta and its satellite towns) in 1985 by the University of Indonesia examined consumer preference as well as some aspects of the distribution chain (LPEM, 1987). It found that marine fish was the most preferred with average home consumption of 12.8 kg/year per caput followed by freshwater fish, 9.1 kg, and shrimps, 5.8 kg. Aggregate consumption of fisheries products at 44 kg per caput appears unrealistically high given the mean income of the sample population and casts doubt on the methodology.
A more extensive survey of 1 600 randomly selected consumers in the four highest socio-economic groups (ranging from a monthly household expenditure of Rp 75 000 to over Rp 250 000) was conducted in the four largest cities (Jakarta, Surabaya, Medan and Bandung) during 1985 in the course of a general household survey by a professional market research firm (SRI, 1985). Sample tabulations are shown in Appendix 2.
In this survey marine fish was confirmed as the type of fish most often bought in Jakarta (70% of respondents). Preferences in other cities differed; in Medan 90% bought marine fish most often, in Bandung (furthest from the sea) 57% bought freshwater fish, but Surabaya on the sea also bought freshwater fish most often, 51%. No investigation was carried out into specific fish species consumed within each product group but respondents were questioned on the reasons for preferring their chosen product group.
Overall 88% of marine fish consumers bought fresh fish and 92% of freshwater fish consumers bought in the same form, though presumably this includes live or fresh fish. Surprisingly consumers in Bandung, the centre of a freshwater fish production area, bought 21% in frozen form as well as 19% of their marine fish in frozen form.
Consumers of fresh fish of all types bought most commonly from markets 79% and less commonly from street hawkers, 14%. Purchases of frozen fish were also mainly from these two sources: 75% and 11% respectively, whilst a minority 9% bought from stalls and 3% from supermarkets. It should be noted that there were very few supermarkets operating in early 1985 but the numbers had risen to over 200 on Java by 1989 (Sparkes, personal communication).
Almost all consumers of fresh or frozen fish products consumed their purchases the same day, 98% and 90% respectively, even those of Bandung, 98% of whose frozen fish purchases were consumed the same day. In Jakarta the proportion of frozen fish buyers consuming their purchases the same day was lower than elsewhere, 83%.
Average purchases of fish products fell largely into the region of Rp 400–1 000 per occasion (67%); only 15% made average purchases exceeding Rp 1 000 though average purchase values rose sharply with increased income. In the highest expenditure group, 50% had average purchases exceeding Rp 1 000 and 15% exceeding Rp 2 000.
No comparable survey of consumer preferences and habits as regards seafood appears to have been carried out since 1985. There is, however, anecdotal evidence of significant changes in consumer activity much associated with the growth in supermarkets and the strong move into fresh produce within this sector. Many higher income group consumers find that the cleanliness, convenience and stable prices offered by supermarkets outweigh the possibility of cheaper purchases elsewhere. As quality of handling and reliability of supply become commonplace in the fresh fish sections of supermarkets the trend towards this outlet as a preferred source of purchases can be expected to continue and probably extend down the income scale. In mid-1989 one supermarket chain was estimated to have a daily order book for all wet seafood of 1 t and was experiencing steady growth in its business.
The reliable supply of electricity and the serviceability of refrigerated display cabinets are major factors in determining the expansion of fresh or frozen produce sections within supermarkets and the extension of supermarket chains to more outlying population centres. Although the penetration of domestic refrigerators is probably very low it undoubtedly contributes to an increase in one-stop buying at supermarkets by higher income groups. The author has observed marked improvements over a relatively short time, between 1987 and 1989, in the quality of fish displayed at supermarkets in one major city, Surabaya. However, standards are set in Jakarta where freshness and variety of fresh produce on display are considerably higher, matching and exceeding many supermarkets in Europe.
The project has carried out several limited surveys of consumer preference for seafood in 1989. The findings of a survey of 30 consumers in the higher, though not clearly defined, income groups within the provincial capital of Lampung, Bandar Lampung are outlined in Appendix 2.
The Lampung survey findings conform with earlier surveys as regards product form, etc. Per caput domestic consumption was estimated at 15.8 kg/year for all marine produce, a plausible figure for a maritime city. The species preference was strongly towards smaller species among the fishes bought, more than 50% preferred Indian mackerel and little tuna, but molluscs and crustaceans were even more strongly preferred, 90% for squid, 85% for shrimp and 45% for cockles. No figures were given for freshwater fishes though seven out of ten in the higher income group preferred freshwater to marine fish.
A similar, as yet unreported, survey has been conducted by the project during June 1989 among 120 consumers in the Jabotabek region, the area previously sampled by the earlier reported University of Indonesia survey. Preliminary figures from 60 consumers with monthly reported incomes of Rp 100 000 per caput and more indicate a weekly domestic consumption of 1 070 g per caput or 56 kg/year. As with the earlier Jabotabek survey, the per caput consumption appears too high, i.e., double the rate for domestic consumption of all fresh products, including freshwater fish, among all urban consumers in a similar income/expenditure group in the broad based SUSENAS survey of 1987. The relative consumption rates for different types of seafood are probably broadly representative of preferences in the higher income groups and are as follows (in grammes/week per caput): little tuna or skipjack, 240; milkfish, 170; shrimp, 165; Indian mackerel and yellowtail, 140; squid, 120; king mackerel, 115; snapper/seabass, 75; crabs, 25 and others, 20. Of these respondents 60% expressed a preference for marine over freshwater fish, and if this is converted directly into purchases it indicates some 36 kg of freshwater fish were purchased per year in addition to 56 kg of marine products.
Whatever doubts remain about absolute levels of consumption it should be noted that snapper and seabass fall within a group of high price items which includes shrimp and squid that collectively made up at least 60% of the higher income group domestic consumption of marine produce.
No data have been found to substantiate general observations on the availability of various types of fish in catering establishments. In Jakarta, shrimp, squid and freshwater fish species are commonly found on menus throughout a range of restaurants. Milkfish and smaller fish such as Indian mackerel as well as carps are used extensively in Padang style restaurants. Snappers are occasionally listed on menus in higher class establishments; groupers and seabass rather less. In such places the dishes are often presented using small pieces of fillet whose origin cannot easily be determined. Despite their name many seafood and Chinese restaurants appear to use little marine finfish in their dishes and only then in fillet form. Where whole fish are presented on the table they are usually freshwater species like gourami or carp which are often held in live storage on the premises. Live grouper appear to be used in very few restaurants.
Consumer preference, the increase in fish consumption rate with income, and limited disposable income all suggest that seafarmed fish are only likely to find a suitable market in the higher income segment of the population, probably less than the top 5% by income.
Clearly, to reach such a small segment, attention must be paid to the most appropriate marketing channels. These are likely to be supermarkets for the domestic consumption trade and the higher class seafood, Chinese and international/hotel restaurants for out-of-the-home consumption.
Currently Jakarta and some provincial supermarkets stock fresh or iced fish of several species that can be seafarmed: principally seabass, rabbitfishes and groupers. Common sizes are 75–300 g per fish and they are medium-priced being normally cheaper than white pomfrets and shrimps and sometimes cheaper than squid or king mackerel (personal observation). These seafarmable species, as most others, are supplied from the capture fishery except for small seabass which are obtained from brackish or freshwater aquaculture.
In Jakarta, more than 0.5 million consumers spent over Rp 100 000/month in 1987 and these must be a prime target of the expanding supermarket trade. These consumers alone constitute a market (extrapolating from the consumer survey figure of 56 kg given above) that may be as high as 28 000 t/year for all fresh marine produce. While a considerable proportion of this market will continue to be supplied by the capture fishery (for instance the Indian mackerels and little tuna, supplies of which can be shipped into Jakarta increasingly as demand dictates) a number of the premium items traditionally supplied by capture will face supply constraints in future.
Such species as pomfrets, snappers, groupers and king mackerels are increasingly being directed to regional export markets for fresh fish and occasionally further afield (see Table 22). It is doubtful if capture fishery production of many of these can be increased and the prospect is therefore for continued increase in their price relative to other fish. Table 20 shows recent prices for a number of seafarming target species and potential substitutes through current distribution channels.
In the medium term there are good prospects for small fresh seabass and rabbitfishes, and even small grouper and snapper in the longer term if they can be supplied at competitive prices. For the immediate future production costs of seafarming for the domestic market must be very carefully examined since current retail supermarket prices give little scope for profit after distribution costs have been taken into account.
The best strategy for entrance into this market would be to establish a premium product meeting higher freshness and presentational standards than available through conventional sources. This would require new or grossly modified marketing channels and close cooperation in development with the supermarket chains involved. Cage farming would, however, face competition from tambak farming in the provision of seabass to such markets.
An important unknown element in the marketing situation is the substitutability of various products within the marine produce sector for the high income group consumer. Two important premium marine products are shrimps and squids; neither of these is likely to suffer supply constraints in the near future; in fact the reverse is likely for shrimp. It is quite possible that domestic demand for high-grade marine products will be absorbed increasingly by shrimp unless export market prices rise from their present low levels. Likewise several freshwater fishes are possible substitutes; gourami, catfish, swamp eel, as well as the more abundant common carp are widely available alive in supermarkets at prices in the middle of the range for iced marine fish (see Table 12).
Out-of-home consumption is likely to be a more problematic market to embark upon. The distribution channels for much of the marine produce used in the restaurant trade are a network of fairly small traders sourcing from a variety of areas. Most of the produce used in filleted form is derived from the small-scale capture fishery by this network and seafarmed produce is unlikely to find it an effective or profitable channel. There is, however, a considerable latent demand for good quality seafood both from the domestic as well as growing tourist markets which is thus far unsatisfied because of the inability of distribution channels to supply satisfactory quality.
Current demand for live marine produce in Jakarta restaurants was assessed to be about 3 t daily during 1989, including shellfish. This could be an overestimate of current throughput since it has not been based upon any sampling of restaurant facilities nor on their specific daily requirements.
A large international chain hotel reported its daily fresh seafood requirement to average 100 kg of which whole grouper (1 kg/fish) made up 20%, red snapper fillets 30% and prawns 30% (Rendell, personal communication). No live seafood was purchased because of unreliability of supply and quality.
Tourism is a fast expanding sector in Indonesia. Tourist arrivals from Asian countries accelerated in 1987-88 to reach 0.6 million, double the figure for 1984 (BPS, 1988).
Singapore, Hong Kong and Taiwan tourists are a large potential market of seafood eaters who would appreciate live seafood in Jakarta. Jakarta figures show that tourists from these countries numbered 80 000, 23 000 and 21 000 respectively in 1987 and stayed for an average 2.5 days (BPS, 1988). The forms of seafood available in Indonesian seas and catches are familiar to these consumers though at considerably higher prices in their own countries than should be likely in Indonesia. Engagement of chefs from Hong Kong is already widespread in Jakarta and other large cities. Despite this, very few restaurants in Jakarta are known to use live marine fish, while the use of live freshwater fish such as gourami, carp and swamp eel is quite common.
Two factors appear responsible for the very limited use of live marine fish in top category Indonesian restaurants. First, there is no tradition in fishing communities of keeping marine fish alive whereas freshwater pond farmers have long been accustomed to delivering their harvest alive to the customer. Second, marine fish in general are more delicate to transport and less resistant to frequent and rough handling and poor water quality. Live holding systems must therefore be more sophisticated in their design and maintained properly to ensure clean, well-aerated water.
Tourists from Northern East Asia, Korea and Japan are another growing potential market of sophisticated seafood eaters. In 1987 there were 85 000 tourists from Japan and 15 000 from Korea.
Japanese restaurants in Jakarta are increasing in number. Almost all provide a range of sashimi (raw fish) dishes, some claiming to use imported fish to justify high sales prices. Much of the tuna used in Japanese restaurants in Indonesia is caught in Indonesian waters in a domestic fishery established to serve the export market where quality is of prime importance to the viability of the business. Other Japanese cooking styles such as broiling and tempura (deep fried in a light batter) are also in widespread use for seafood and require extremely fresh if not live raw material.
Solutions to the infrastructural problems limiting the use of fresh and particularly live seafarmed fish will not be easy. There are few if any catering business groups whose gross demand for a particular product is high enough to justify setting up a specific distribution channel. If seafarmed products are aggregated into the network for captured fish they are unlikely to retain the value that their potential for freshness deserves.
Approaches may therefore have to be on a business basis between farmer and end-user with a sharing of the total infrastructure costs; these do not have to be too significant to start with. A restaurant requires live holding tanks with pumps and filtration systems; these need be no more sophisticated than a commercial freezer chest. Seawater can be supplied artificially and simply by addition of seasalt, plentiful in Indonesia, to fresh tapwater. Road transport of small quantities of finfish requires simple water containers that can be aerated by portable battery-driven pumps.
There are many areas near Jakarta for live storage of marine fish; many in the Pulau Seribu group are already developed for tourism and feature seafood in their promotion. Their restaurants may be a suitable base from which to develop the live restaurant trade in the potentially much larger market of the city itself.
