Indonesian Coffee Industry
Indonesia is the world's fourth-largest coffee producer after Brazil, Vietnam, and Colombia. Approximately 67% of its production is exported, while the remaining 33% is used to meet domestic demand. According to a 1989 survey by the Indonesian Institute of Sciences (LPEM UI), domestic coffee consumption was 500 grams per capita per year. Today, coffee entrepreneurs estimate that Indonesian coffee consumption has reached 800 grams per capita per year. Thus, over the past 20 years, coffee consumption has increased by 300 grams per capita per year.
The domestic coffee industry is highly diverse, ranging from home-based businesses to multinational corporations. The products produced not only meet domestic coffee consumption but also cater to international markets. This demonstrates that domestic coffee consumption remains an attractive market for entrepreneurs, offering prospects and opportunities, while also demonstrating the conducive environment for investment in the coffee industry.
Development of Coffee Needs
As a coffee producing country, coffee exports are a primary target for marketing Indonesia's coffee products. Export destinations are traditional consumer countries such as the USA, European countries, and Japan. With the advancement and development of technology, there has been an increase in prosperity and changes in Indonesian lifestyles, ultimately driving increased coffee consumption. This is evident in the increase in domestic demand, which reached 120.000 tons in the early 90s and has now reached around 180.000 tons.
Therefore, nationally, it is necessary to maintain a balance in fulfilling coffee needs for both foreign (export) and domestic (coffee consumption) markets by maintaining and increasing national coffee production.
Coffee Consumption Patterns
Judging from the history of coffee development in Indonesia, since coffee became one of the mainstay commodities of the Dutch East Indies Government in the early 1900s, coffee produced by plantations managed by the Dutch East Indies Government was almost entirely exported. Lower-quality coffee that was not sold for export was sold or given to the people and plantation workers to be made into drinks. The taste for drinking coffee from low-quality coffee beans has been carried down through generations to the present day, and in some areas, especially in Java, coffee is even mixed with rice or corn (known as kopi jitu = kopi siji jagung pitu).
The rising standard of living and shifting lifestyles of urban Indonesians have led to a shift in coffee consumption patterns, particularly among young people. The younger generation generally prefers instant coffee, three-in-one coffee, and espresso-based drinks served in cafes. Meanwhile, ground coffee (kopi tubruk) remains the primary consumption choice for rural residents and the elderly.
Structure of the Domestic Coffee Industry
1. Small-scale processed coffee industry (Home Industry)
Industries in this group are home-based, employing family members and one or more employees. Their products are marketed in local shops or markets, with or without a brand name. Industries in this group are generally not registered with the Department of Industry or the Food and Drug Administration. Industries in this group are spread throughout coffee-producing regions.
2. Middle class processed coffee industry
The coffee industry in this group is a coffee processing industry that produces ground coffee or other processed coffee products, such as coffee drinks, marketed within the district or regency where they are produced. The products are packaged in simple packaging and generally licensed by the Department of Industry as household products. Mid-range processed coffee industries are often found in coffee production centers such as Lampung, Bengkulu, South Sumatra, North Sumatra, and East Java.
3. Large-scale processed coffee industry
The coffee industry in this group is a coffee processing industry that produces ground coffee, instant coffee, or mixed coffee, and other processed coffee products, which are marketed domestically or exported. The products are packaged and generally have trademark numbers and/or other labels. Some coffee industries classified as this type of industry include PT Sari Incofood Corp, PT Nestlé Indonesia, PT Santos Jaya Abadi, PT Aneka Coffee Industri, PT Torabika Semesta, and others.
Packaging Diversity
The domestic coffee industry offers a wide variety of products, from traditional paper or simple plastic packaging to aluminum foil packaging. Coffee products are typically packaged in ready-to-drink sachets or pre-packaged packages with various contents.
Meanwhile, for some types of processed coffee products destined for export, large boxes are available for roasted and instant coffee. Liquid extract coffee is packaged in special drums.
Processed Coffee Production
The products produced by the coffee industry are primarily ground coffee and instant coffee. These two types produce products like three-in-one coffee and others. Meanwhile, in cafes (coffee shops), the basic products are original coffee and espresso.
Current ground coffee production is estimated to have reached 150.000 tons, while instant coffee and its derivatives have reached 20.000 tons. Data from the Central Bureau of Statistics (BPS) indicates that the average annual export volume of soluble coffee over the past five years has reached around 15.000 tons, while ground coffee exports have reached 3.000 tons.