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Indonesia’s coffee craze spurs cutthroat offers
Coffee cart ventures brew a cup of joe for Rp 8,000 (55 US cents) instead of the previously common price of Rp 18,000 for the same beverage, prompting big brands to step up their game.
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A street vendor sells coffee-to-go on a Jakarta sidewalk on May 28, 2024. (JP/Muhammad Zaenuddin)
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rices for freshly brewed coffee-to-go have been tumbling, marking a new wave in the coffee culture of Indonesia, the fourth-largest coffee producer in the world.
Pedaling around the city, mobile coffee sellers are brewing the nation’s bestselling beverage of milk coffee with palm sugar for just Rp 8,000 (55 US cents), while the same beverage previously was hovering around Rp 18,000, forcing established brands to step up their game.
The aggressive down-pricing is driven by more efficient coffee-making equipment, the rising middle class and increasing consumer spending on coffee each year, according to Edward Ismawan Chamdani, treasurer at the Indonesian Venture Capital and Start-ups Association (Amvesindo).
“The mass market in Indonesia still prefers kopi susu [milk coffee] and is less influenced by the premiumization trend,” Edward told The Jakarta Post on Monday. “The Rp 8,000 price point is achievable because of these new technologies, which lower production costs without sacrificing taste.”
Read also: Mobile café start-up Jago lands $6 million in series A funding
Indonesia’s coffee consumption rate surged by 18.2 percent year-on-year (yoy) in 2023, according to the International Coffee Organization (ICO).
The country’s coffee market is projected to reach $2.22 billion in 2024, driven by the rising middle class and increasing awareness of health problems associated with sugary drinks, according to a Fitch Solutions report.
