STUART MULJADI WRITES–Earlier this year, it was announced that megastars Jay Z and Serena Williams would be investors in Kopi Kenangan (translation: “Coffee memories”), an ambitious, Jakarta- based, non-franchise coffee chain founded by CEO Edward Tirtanata in 2017. According to a local article profiling the CEO, Tirtanata was asked the main reason behind this endeavour. He responded, “I saw a missing gap in the market between sachet coffee (US$0.10) and Starbucks coffee (US$2.5). So I made the company to fill that gap, a local but high-quality coffee recipe with a significantly cheaper price tag than the rest of the competitors in the market.”
Most Indonesians associate a cup of coffee with one of those giant chains such as Starbucks, Dunkin Donuts, Coffee Bean, McCafe and more. Given the ever-growing coffee market in Southeast Asia, then, Tirtanata is certainly the new and original kid on the block who’s about to “stir things up.”
At first, many Indonesians, including myself, were pleasantly surprised by the celebrity endorsements. But despite Tirtanata’s explanation, the questions arose: Why were Jay Z and Serena Williams investing in an Indonesian coffee chain? Why not a bigger, more reputable chain or franchise closer to home, like Starbucks?
According to various sources, both celebrities invested through their personal venture capitals— Jay Z through a subsidiary of ROC Nation known as Arrive, after having become aware of the company through business partner and Arrives co-founder Neil Sirni. What sold him on the idea, said Sirni, was “Kopi Kenangan’s tenacity, vision and ability to execute” its rapid expansion of outlets. Serena Williams did the same through her venture capital, known as Serena Ventures, although, in truth, it looks like she simply decided to follow Jay Z’s lead.
Coffee, for many, is the very fuel that keeps our engines running during late-night shifts and workdays that have us feeling half dead. For Indonesian citizens, these new coffee industry developments are, well, major picker-uppers which could increase awareness of Indonesia’s economic value, attract big-time foreign investors and create more opportunities for existing markets simply by bringing in more capital. After all, this is a country of 250 million people, and it is the fourth largest coffee bean producer and exporter globally.
But many Indonesians also view a downside that comes with such publicity. When big names such as Jay Z and Serena Williams invest, one must wonder, how good is the actual product itself? More importantly, what is Kopi Kenangan’s USP (Unique Selling Point)? Why should Indonesians switch from the ‘usual suspects’ (e.g. Starbucks, McCafe etc.)? Well, why not? Kopi Kenangan is definitely cheaper than its competitors due to its ingredients being locally sourced.
But the product itself has one ‘bittersweet’ problem- the coffee often tastes like a ‘soft drink’ rather than actual coffee. Many locals say the array of flavours is ‘too sweet’; strange, since Indonesians pride themselves on their fine taste buds, favoring sweet over savoury. This poses an additional and potentially huge problem; in today’s society, youths in Asia are growing more conscious of their health each year. In fact, one study shows that “…diabetes in Indonesia is considered a major health problem and has been a concern since the early 1980s . With more than 10 million people living with diabetes.”
So if more and more customers catch on and scrutinize the possible health risks of sweet drinks, they may not buy from Kopi Kenagangan and might instead stick with the big chains like Starbucks and Dunkin Donuts.
That would be, well, a health-oriented chain reaction. Imagine that.