Local coffee shops wake up and smell the competition

Local coffee shops wake up and smell the competition

P.C. Naommy, Contributor, Jakarta

For Serli Wawolumaya, it's all about the coffee. When the
23-year-old private company employee and PR student seeks out her
daily pick-me-up, she does not look for a trendy spot to stop and
talk shop as others look in from the outside.

Her choice is a locally owned coffee shop -- "it's tastier and
fits my pocketbook" -- for an Indonesian brew.

"I come here because I want my cup of coffee, especially
nearing midday when I get sleepy. It's like a vitamin to me,
because I suddenly have the energy to keep going for the rest of
the day."

Coffee culture has been part of Indonesian life for hundreds
of years, especially in the coffee-growing regions in Sumatra and
Sulawesi, but it's taken on a new, modern meaning with the rapid
development of coffee shops and cafes in the past few years.

Even those who do not want a caffeine fix have come into the
fold.

"Actually, I'm not a coffee lover, I just like the
environment, because it's relaxing, especially after office
hours," said marketing employee Rex, 24.

"I don't mind the high prices, because I don't go there too
often."

Heralding the development of coffee consciousness has been
Starbucks, which opened its first store at Plaza Indonesia in
2002 and now has 24, from Medan in North Sumatra to Denpasar,
Bali.

The heavyweight in the coffee world, founded in 1971 and
offering its "coffee experience", replete with comfy chairs and
soft music, is now firmly entrenched in the flourishing local
market, along with the venerable Ooh La La, Segafredo, Daily
Bread, Excelsior, as well as more relative newcomers such as
Gloria Jean's.

The general manager of PT Sari Coffee Indonesia, the
franchisee for Starbucks, Anthony Cottan, said coffee culture
welcomed all, from students to working people, from singletons to
married couples.

"That's what makes a coffee shop a nice and neutral place to
hang out. Even businesspeople use the coffee shop as a place to
hold informal meetings with their partners," said Cottan.

And that inclusiveness also means allowing local coffee shops
a look in, the company contends.

"We don't think that when we open a new cafe it will kill the
business growth of existing coffee shops. In fact, we will
benefit each other," said Cottan.

He argued that its big-name presence would attract more people
to coffee culture, while existing local brand coffee shops would
help educate people more about coffee drinking and expand the
potential market.

"Usually their pricing structure is a bit less than us. It's
likely that people would first try coffee at the local brand
coffee shops, and when they're ready, they might try Starbucks,"
said Cottan.

I. Widjojo, the owner of home-grown Bengawan Solo Coffee, said
he did not believe the presence of international coffee chains
was muscling out smaller local shops from the market.

"In fact, we consider them our mentors, for their experience
and established management in this business. Especially
Starbucks, for doing a very good job in expanding the market."

The first Bengawan Solo coffee bar outlet was opened at the
Ambassador mall in Central Jakarta in 2001. Today, it has a total
of seven outlets at several malls in Jakarta, mostly using
pushcarts.

"People today, especially businesspeople, perhaps don't have
the time to sit down and talk while having a cup of coffee. They
just want the coffee. So that's why we go with the pushcart
concept," Widjojo said.

And there is that price difference; an ice blended Toraja
coffee with milk and whipped cream is Rp 12,500 at Bengawan Solo,
about half the price of the same drink sold by the international
coffee chains.

"We offer the best quality coffee and go with affordable
prices, even for those who come from the lower income bracket."

Widjojo said that he did not use active promotions, unlike
those of international chains.

"We are striving to give our best and let the customers
decide, because trying means believing," he added.

While other local coffee shops have come and gone, Bakoel
Koffie at Jl. Barito in South Jakarta, has roots dating back more
than 125 years.

It has taken the entry of the new names in stride.

Syenny Chatrine Widjaja, the marketing manager of Bakoel
Koffie and part of the fourth generation of owners, agreed that
international coffee chains were positive for the market.

"The presence of such international coffee chains has helped
educate people about coffee culture, especially among Indonesians
who are known as brand-minded consumers."

The store's origins date back to 1878, when Liauw Tek Siong,
her great grandfather, opened a coffee roasting business under
the Tek Sun Ho brand.

Syenny argued that a local coffee shop like Bakoel offered a
more personal touch in maintaining product quality and freshness,
with the roasting, grinding and blending conducted in store.

"The raw ingredients at international coffee chains are not
being processed in Indonesia, but at their headquarters
elsewhere. With such long distribution channels, it's possible
that the products have lost their freshness during the journey."

Bakoel Koffie has also tried to expand its market by focusing
on young people as potential customers, especially as coffee
shops can be a place to be seen and heard instead of noisy,
crowded bars.

"Coffee culture wasn't previously associated with young
people, but now a hangout is mostly associated with drinking
coffee in local coffee shops," said Syenny.

Its menu now includes coffee-based beverages which are popular
among the younger crowd, such as cappuccino, latte and ice-
blended drinks.

"It's almost impossible to expect young customers to buy a
packet of pure coffee, because they're not at that stage yet.
That's why we try to educate them through popular coffee-based
drinks," said Syenny.

Bakoel Koffie's decor style is a 1930s' Jakarta theme with a
current contemporary style.

"The basic concept is a coffee bar, a place where you come to
hang out with friends over coffee, a light lunch, accompanied by
hip music, such as the Buddha bar," said Syenny.

From her own family's long experience in the business, she
said following a trend was not the way to stay for the long haul.

"To really exist in this kind of business, we need to inject
soul into it, because it is the most basic element that cannot be
replicate by other competitors."