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Coffee boom aids upstream, downstream businesses
The mushrooming number of coffee shops, both global chains and local outlets, in recent years has helped increase domestic consumption of the commodity and boost the upstream and downstream coffee business
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T
he mushrooming number of coffee shops, both global chains and local outlets, in recent years has helped increase domestic consumption of the commodity and boost the upstream and downstream coffee business.
Data from market research and business intelligence portal Statista shows Indonesia’s annual coffee consumption has risen by 66.08 percent from 2.83 million 60-kilogram-bags of coffee in 2006 to 4.7 million 60-kg-bags in 2017.
The increase in domestic coffee consumption took place amid the boom in coffee outlets in cities across Indonesia.
The rise of local coffee shops and roasters has also allowed Indonesian consumers to get exposed to the local premium Arabica coffee that offers more complex flavors than the Robusta variant, resulting in increasing demand for Arabica beans.
As a result, farmers prefer to sell their products locally than to export them.
Meanwhile, Indonesia Coffee Export and Industry Association (AEKI) vice president Pranoto Soenarto said many new roasters were offering farmers significantly higher prices for their Arabica beans.
Co-founder of the Jakarta-based Anomali coffee and roaster, Irvan Helmi, added that local buyers’ close proximity to farmers allowed them to pay higher prices and sell the coffee for better profit margins to consumers, as quoted by Reuters.
Specialty Coffee Association Indonesia (SCAI) chairman Syafruddin said on Friday that on average, around 35 percent of the total coffee production in Indonesia was of Arabica beans.
Before the rise of local coffee shops in Jakarta and many other cities, Indonesia usually exported around 80-90 percent of its total Arabica bean production.
“However, this proportion has changed in the past few years as local demand has grown, with the volume of Arabica beans exported to countries such as the United States having decreased to around 60-70 percent,” he said.
Despite the reduced export volume, he said he was optimistic the volume of coffee exports would grow as coffee production this year was expect ed to reach 750,000 tons on the back of good weather, up by 11.11 percent from 675,000 tons recorded last year.
Meanwhile, the rise of coffee shops in Indonesia has not only helped the upstream industry to thrive, it has also increased the downstream industry’s slice of the cake.
An example of which is espresso coffee machine importer PT Toffin Indonesia.
As sole distributor of Italian espresso machine brands such as Nova Simonelli and Victoria Arduino, Toffin head of marketing Ario Fajar said the company distributed espresso machines to many local coffee shops around Indonesia such as Warunk Upnormal and J.Co Donuts, as well as international coffee chains like Starbucks Indonesia.
He also said the coffee shop growth in Indonesia meant Toffin was now the market leader in the espresso machine business. He said the company now had 85 percent market share, according to data obtained from the Italian machine manufacturers’ association.
The popularity of coffee in Indonesia has led event organizer Pamerindo to include the Indonesia Coffee Event (ICE) 2018 in the first international hospitality equipment and foodservice expo Hotelex Indonesia to be held on July 18-20.
Pamerindo project director Wiwiek Roberto said ICE 2018 would include brewing, latte art, and tasting competitions and the winners would represent Indonesia at the World Barista Championship in Brazil in November. (ris)
