Petra Foods Limited (SGX:P34) is well-positioned in the Indonesian chocolate market with 50% market share and is poised to benefit as incomes rise in the country, allowing more people to afford the branded chocolates, says Amy Hu Sunderland, Senior Research Analyst at Grandeur Peak Global Advisors.
“It’s a Singapore-listed company that you could think of as the Hershey’s (HSY) of Indonesia, where they have about 50% market share in chocolates. They have been there for over 60 years. The Indonesia market is very interesting because the consumption of chocolate is very low, but beginning to grow. Petra has the distribution to many of the independent shops and markets, and as incomes rise, chocolate consumption increases,” Sunderland said.
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Sunderland became positive on Petra’s long-term opportunities after visiting the company, as it is a well-known and trusted brand in Indonesia that consumers will come to when buying chocolate, Sunderland says.
“We’re more excited about the long-run opportunity, as only 10% of the local population can afford branded chocolates today. These guys are well-positioned to compete against Nestle and the other multinational chocolate companies, because they know the local market, the distribution network and the local consumers’ tastes better. The consumers know and trust the brand, much like we do with Hershey, Snickers or M&M,” Sunderland said.
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