Yuppies keep coffee shops on the boil
Yuppies keep coffee shops on the boil
Grace Nirang, Reuters, Jakarta
Indonesian farmers may be fed up with the low prices they get for
their coffee but young people in the world's fourth most populous
country can not get enough of the trendy bean.
Farmers in the world's fourth largest producer desperately
want out of coffee, but plans are brewing in the big cities for
even more trendy cafes serving the stuff.
The Coffee Bean opened in one of Jakarta's glitziest malls in
January and the world's largest coffee chain, Starbucks, has
announced plans to expand into Indonesia.
Home-grown modern cafes with Italian or French names dot
almost every mall, although foreign coffee chains are just
entering the Indonesian market.
For investors, the draw is obvious: Indonesia's growing middle
and upper classes.
The world's most populous Muslim nation may still be in
crisis, but do not tell that to customers lounging at The Coffee
Bean (TCB) in upmarket Plaza Senayan in south Jakarta.
"Sure, the coffee is expensive, but it's the lifestyle that
we've bought," accountant Tri Wahyu Sampurno said, as he sipped
his tall mochachino.
There's a strong demand for "the modern yuppie lifestyle" and
drinking coffee is part of it, TCB managers say.
"The coffee business is booming. It's a matter of getting the
right concepts and tapping into what the middle class wants,"
said Arifian Gustiandi, operations manager at TCB franchisee PT
Tiga Satu Tiga Dwima.
A regular mocha-ice-blended drink at TCB costs Rp 25,000
(US$2.69) -- more than a day's wage for the average Indonesian
factory worker.
Perth-based chain Dome opened its second outlet in Jakarta
last year, less than a year after starting up.
Lukman Hakim, assistant manager at TCB, said: "It's trendy to
be seen at our shop. It's not just the coffee, it's the idea of
drinking expensive coffee too."
Over the next five years, TCB plans nine more outlets in the
country's biggest cities.
Some may think that a touch ambitious for a vast archipelago
more accustomed to exporting its coffee than drinking it.
But there's no shortage of optimism in the sector.
"Indonesia has a strong coffee culture, but it has been much
more focused on the growing side. We hope we can contribute to
develop the local side of consumption, help convince the local
consumer that quality coffee tastes good," said a manager at
Starbucks's partner, Mitra Adiperkasa.
Yet Indonesia still has a long way to go before it can rival
Japan as Asia's largest coffee consumer.
Even before the economic crisis of the late 1990s, Indonesia's
annual domestic coffee consumption was just half a kg per person,
or about 120,000 tonnes every year.
The Indonesian Coffee Exporters' Association (AEKI) estimates
consumption at 100,000 tonnes, a slight recovery after hitting
80,000 tonnes at the worst point of the crisis in 1998.
Only a few years ago, consumption of gourmet blends was close
to non-existent.
But thanks to home-grown cafes that have mushroomed since the
late 1990s, many youngsters -- flush with pocket money from their
parents -- now prefer to drink cappuccinos, mochachinos and cafe
lattes rather than tea or colas.
For upwardly mobile professionals such as Sampurno, Jamaican
Blue Mountain and Sumatran Mandheling are names of gourmet beans,
not simply tourist resorts.
The irony is that TCB and Starbucks buy mostly arabica raw
beans from producing nations and process them in the United
States or elsewhere before bringing them back for sale at
inflated prices.
"So far, I see no positive impact from the producer side.
Those coffee chains serve imported beans, they rarely serve our
robustas," AEKI Executive Secretary Rachim Kartadibrata said.
The country's coffee output has been falling in the past three
years as weak prices -- robusta at 30-year lows last year --
deter farmers from planting coffee and maintaining plants.
Indonesian grade four robusta beans now sells at Rp 4,000/kg,
just enough to buy one kg of rice.
But the new coffee culture could bring a glimmer of hope to
domestic producers -- who grow 90 percent robusta and 10 percent
arabica -- through the possibility of a share of the growing
market, by encouraging consumption of domestic blends.
"We have a lot of gourmet varieties, some of them have never
even been heard of in the international market," said Litha
Brent, who runs Sulawesi-based CV Gumer trading house.
"Our good quality robustas have appealing and acceptable taste
characteristics... I don't see any reason why it can't be sold in
international chains," one trader said.