Constraints of Small and Medium Food Industry to Take Advantage of Domestic Market Opportunities during the Covid-19 Pandemic
The small and medium-sized food industry (SMFI) has a great opportunity to meet domestic market demand during the Covid-19 pandemic but there are various obstacles. This paper aims to present the constraints faced by SMFIs, especially concerning raw materials and marketing, in taking advantage of domestic market opportunities, and proposes alternative solutions. The study was conducted on four SMFIs that produce functional food in Malang Regency. Data were collected through in-depth interviews. The results showed that the demand for functional foods such as garlic, ginger, turmeric and fruits increased during the Covid-19 pandemic, which seemed to be related to public awareness about increasing immunity. However, the obstacles faced by SMFIs were the high price of raw materials due to limited supply, and limited marketing because they did not have distribution licenses from BPOM. Information about the process and BPOM’s distribution permit requirements was very limited for SMFI managers, and large capital was needed to fulfill the requirements of Good Manufacturing Practices. Therefore, SMFIs should have long-term cooperation with farmers to ensure the availability of raw materials; build networks and maintain cooperation with customers; and utilize credit for MSMEs in the economic recovery program provided by the government to meet the GMP requirements in BPOM’s distribution permit. The government should conduct intensive outreach to SMFI managers about the process and requirements for distribution permits from BPOM, credit facilities, and other policies related to economic recovery during the Covid-19 pandemic.
Keywords: small and medium food industry, domestic market, Covid-19 pandemic, BPOM
 Afolayan, A., et al. (2015). Information Technology Usage in SMEs in a Developing Economy. Strategic Change, vol. 24, issue 5, pp. 483–498.
 Agus, A. (2015). Supply Chain Management: The Influence of SCM on Production Performance and Product Quality. Journal of Economics, Business and Management, vol. 3, issue 11, pp. 1046–1053.
 Amat, M. and Ishak, S. (2019). Faktor PSiKKIT: Pendorong Inovasi Pembungkusan Dalam Kalangan Industri Kecil Dan Sederhana Berasaskan Perusahaan Makanan. Geografia: Malaysian Journal of Society and Space, vol 15, issue 3, pp. 90-103.
 Ariani, D. and Dwiyanto, B. M. (2013). Analisis Pengaruh Supply Chain Management Terhadap Kinerja Perusahaan. Diponegoro Journal of Management, vol. 2, issue 3, pp. 1–10.
 Avisena, M. I. R. (November 2019). UMKM Didorong Kuasai Pasar Domestik. Retrieved on 20 August 2020 from https://mediaindonesia.com/ekonomi/270235/umkm-didorong-kuasai-pasar-domestik
 Bouey, J. (2020). Assessment of COVID-19’s Impact on Small and Medium-Sized Enterprises: Implications from China. Santa Monica, CA: RAND Corporation, 2020. https://www.rand.org/pubs/ testimonies/CT524.html.
 Badan POM. (2020). Laporan Tahunan 2019. Retrieved on 12 September 2020 from https://pom.go.id/ new/browse/more/laporan_tahunan/10-02-2020/10-02-2021/1
 BPOM RI. (2017). Peraturan Badan pengawas Obat dan Makanan Republik Indonesia. Badan Pengawas Obat Dan Makanan, vol. 2, issue 53, pp. 1689–1699.
 Brodjonegoro, B. P. (2020). UMKM 4.0. Kompas: Depok.
 Donthu, N. and Gustafsson, A. (2020). Effects of COVID-19 on Business and Research. Journal of Business Research, issue 117, pp. 284–289. vol 11.
 Hasnan, N. Z. N., et al. (2014). Food Factory Design: Reality and Challenges Faced by Malaysian SMEs. Agriculture and Agricultural Science Procedia, issue 2, vol 2, pp. 328– 336.
 Ibrahim, Z., Abdullah, F. and Ismail, A. (2016). International Business Competence and Small and Medium Enterprises. Procedia - Social and Behavioral Sciences, issue 224, vol 224, pp. 393–400.
 Gatra, S. (2020, August). Petugas Medis Jakarta Belum Terima Intensif Sejak Maret 2020. Retrieved on 10 September from https://megapolitan.kompas.com/read/2020/08/19/20513351/petugas-medisjakarta-belum-terima-insentif-sejak-maret-2020
 Kurniawan, A. and Kusumawardhani, A. (2017). Kinerja Umkm Batik Di Pekalongan. Diponegoro Journal of Management, issue 6, pp. 1–11.
 Kurnia, T. (2020, August). Diaspora Indonesia Rilis Buku Cerita COVID-19 dari 19 Negara. Retrieved on 10 September 2020 from https://www.liputan6.com/global/read/4337051/diaspora-indonesia-rilisbuku-cerita-covid-19-dari-19-negara
 Martadisastra, D. S. (2017). Kinerja Pemasok Dalam Rantai Pasokan Makanan Kemasan: Suatu Kajian Kasus Di Indonesia. Jurnal Manajemen Bisnis vol. 12, issue 1, pp. 89-102.
 Maryati, T., Syarief, R. and Hasbullah, R. (2016). Analisis Faktor Kendala dalam Pengajuan Sertifikat Halal. (Studi Kasus: Pelaku Usaha Mikro, Kecil dan Menengah Makanan Beku di Jabodetabek). Jurnal Ilmu Produksi Dan Teknologi Hasil Peternakan, vol. 4, issue 3, pp. 364–371.
 Hami, N, et al. (2018). Sustainable Manufacturing Practices among SMEs in Malaysia. International Journal of Technology, vol. 9, issue 8, pp. 1658–1667.
 Qosasi, A., et al. (2019). The Impact of Information and Communication Technology Capability on the Competitive Advantage of Small Businesses. International Journal of Technology, vol. 10, issue 1, pp. 167–177.
 Raflis, A., Ishak, S. and Jusoh, M. A. (2020). The Impact of Covid-19 Movement Control Order on SMEs’ Businesses and the Impact of Covid-19 Movement Control Order on SMEs’ Businesses and Survival Strategies. Geografia: Malaysian Journal of Society and Space, vol. 6, issue 2, pp. 139-150.
 Rose, A.M.N. (2011). Lean Manufacturing Best Practices in SMEs. International Conference on Industrial Engineering and Operation Management, vol. 1, issue 1, pp. 872–877.
 Susmayanti, H. (2020, July). Data Terbaru Virus Corona di Jawa Timur, Surabaya Masih jadi Daerah dengan Penambahan Tertinggi. Retrieved on 10 August 2020 from https: //jogja.tribunnews.com/2020/07/24/data-terbaru-virus-corona-di-jawa-timur-surabaya-masih-jadidaerah-dengan-penambahan-tertinggi
 Yulianti, M. D. and Resmi M. (2018). Tata Cara Registrasi Untuk Pangan Olahan Industri Rumah Tangga (Pirt) Dan Makanan Dalam Negeri (Md) Dalam Rangka Peningkatan Produk Yang Aman Dan Bermutu Di Bandung Jawa Barat. Farmaka, vol. 15, issue 3, pp. 57–64.