Best practice for Postgres setup with docker-compose

I have a docker-compose script which starts a Postgres container and an app container like so

db:
  image: postgres:10.6
  restart: always
  ports:
    - 5432:5432
app:
  image: test_app:latest
  restart: always
  depends_on:
    - db

This all works fine and 'app' can talk to 'db'. However, the postgres server is in a basically unusable state as it has no configuration with regards to having databases, users, etc. setup (apart from the defaults). It appears that the recommended way of fixing this is to create your own 'db image' pulling from postgres and running some shell script to take care of business (and then your composition uses this image), but this seems very hacky and convoluted to me.

Does anyone have a better way of setting up a postgres server with a known configuration inside a docker-compose based system?

First, use alpine images if possible.

Second, use ENV variables for prepare database configuration. More info.

Third, use /docker-entrypoint-initdb.d directory for extend image. More info.

Example stack with devlopment environment.

version: '3.2'
services:
  example:
    image: "${EXAMPLE_SERVICE}:${EXAMPLE_SERVICE__VERSION}-development"
    build:
      context: .
      dockerfile: Dockerfile.development
    networks:
      - net
    ports:
      - 5000:5000
    depends_on:
      - example__migrator
    stdin_open: true
    tty: true
    environment:
      POSTGRES_PASSWORD: example
      POSTGRES_DB: example
      POSTGRES_USER: example
      POSTGRES_HOST: pg.example_net
      POSTGRES_PORT: 5432
      FLASK_APP: app.py
      FLASK_DEBUG: 1
    volumes:
      - .:/home/example
  example__migrator:
    image: "${EXAMPLE_SERVICE}:${EXAMPLE_SERVICE__VERSION}-development"
    build:
      context: .
    command: sh -c './wait-for pg.example_net:5432 -- python manage.py db upgrade'
    networks:
      - net
    depends_on:
      - pg
    environment:
      POSTGRES_PASSWORD: example
      POSTGRES_DB: example
      POSTGRES_USER: example
      POSTGRES_HOST: pg.example_net
      POSTGRES_PORT: 5432
  pg:
    image: postgres:10.0-alpine
    networks:
      - net
    ports:
      - 5432:5432
    volumes:
      - pg_data:/var/lib/postgresql/data/pg_data
    environment:
      POSTGRES_PASSWORD: example
      POSTGRES_DB: example
      POSTGRES_USER: example
      POSTGRES_HOST: pg.example_net
      POSTGRES_PORT: 5432
      PGDATA: /var/lib/postgresql/data/pg_data
networks:
  net:
volumes:
  pg_data:

StackExchange DevOps Q#5735, answer score: 5