Fried Chicken and the Thriving Fast Food Franchises in Indonesia

Even though Eid al-Fitr is only a few days away, the price of purebred chicken at the traditional market remains unchanging, according to the Chairperson of Commission II DPRD West Kalimantan Province's monitoring.

In the majority of Indonesia's other areas, the same thing occurred. Currently, chicken meat costs IDR 30.000 per head for small sizes, IDR 35.000 for medium sizes, and IDR 40.000 for large ones.

According to local meat traders, the price increase will probably occur three days before Eid al-Fitr. In addition, the price of chicken meat did not increase, most likely due to supply from imported meat, so the current stock still exceeds consumer demand.

Fried Chicken as Food Commodity in Indonesia

Has there been a decrease in the consumption of chicken meat among the Indonesian people?

It doesn't seem so.

In actuality, the Central Statistics Agency (BPS) reported in 2021 that Indonesians consumed an average of 0.14 kilograms (kg) of chicken meat per person each week. This number set a record for the past ten years and rose by 7.69% when compared to 2020.

There are several reasons people choose to eat chicken rather than beef or buffalo. Among other reasons, the price is more reasonable, and the production is abundant in Indonesia. Currently, the price of beef at Tebet Timur Market is set at IDR 150.000 to 170.000 per kg.

BPS disclosed that while beef and buffalo meat production in Indonesia amounted to 437.78 thousand tons and 20.97 thousand tons, respectively, in the same year, chicken meat output reached 3.42 million tons.

The Intimate Relationship Between Chicken Meat and Indonesia's Fast Food Chain

According to a report from Grab at the end of 2022, one of the food types that Indonesians order the most is fried chicken, which is right below the purchase of fried rice and tea. Not only in Indonesia, but fried chicken is also a favorite food delivery menu in the Philippines and Malaysia.

Therefore, it is not surprising that fried chicken franchises are mushrooming in various regions of Indonesia.

Take KFC, for example.

According to Eric Leong, CEO of Fast Food Indonesia (FAST), KFC Indonesia currently has 792 locations around the nation. While 158 of the outlets operate in separate or standalone buildings, the majority are affixed to malls or shopping centers.

In addition, FAST plans to add 30 to 40 new KFC outlets by 2023. Even though the company will require IDR 12 billion in investment funds to set up a single-floor store, the revenue that they have and can collect is astounding. In 2021 alone, FAST accumulated a revenue of IDR 4.84 trillion.

Another popular fried chicken franchise, Moon Chicken (under the multi-brand culinary company, Hangry), has also shown enormous growth since its inception in 2021. 

The brand is now operating at least 70 different outlets in Jabodetabek, Bandung, and Surabaya. Abraham Viktor—Co-founder and CEO of Hangry—aimed for Hangry to become the largest food and beverage (F&B) player in Indonesia by 2025.

It's natural that fried chicken franchise businesses are increasingly widespread in Indonesia. Apart from well-known brands such as KFC and Moon Chicken, a number of local franchises have also emerged in the last decade.

The reasoning behind this is that you simply need a capital of between IDR 25 and IDR 250 million to purchase franchise business packages from companies like Crispyku and Sabana. One package purchase comes with training, a booth, supplies for the kitchen, and other essential items.

How Does Online Food Delivery Contribute to Indonesia's Fried Chicken Franchise?

It is impossible to separate the Indonesian population's tendency to seek delicious, convenient, and time-saving dishes from the quick expansion of the fried chicken franchise in the nation.

In a way, Indonesia's large number of customers who order meals online has aided in the growth of the fast-food industry there.

According to a report from research firm We Are Social, 19.85 million Indonesians used online food ordering services, such as GrabFood and GoFood, from 2022 to early 2023.

This figure rose 16.5% YoY or 2.8 million people from the previous period. The total transactions itself exceed US$1.2 billion or the equivalent of IDR 18,2 trillion over a year.

This report shows that Indonesian is still a significant market for online food delivery services, including from well-known fast-food chains such as KFC, Rocket Chicken, Moon Chicken, and so on.

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