In Indonesia, coffee has evolved beyond a mere drink—it has become a lifestyle, marked by the rapid growth of coffee shops across the country. Toffin (2020) shows a significant increase in the number of coffee shops in Indonesia from 1,000 outlets in 2016 to more than 3,000 in 2019. Even though many new brands have been born, the position of local players such as Kopi Kenangan and Kopi Tukuis also getting stronger. These two brands have succeeded in taking advantage of this trend by bringing forward concepts that are relevant to the local market, such as grab-and-go down Kopi Kenangan and the uniqueness of the neighbor’s milk coffee Kopi Tuku. Kopi Kenangan and Kopi Tuku use one hundred percent original coffee beans from various regions in Indonesia to introduce them to the world. Coffee production in Indonesia in 2023 will mostly come from Community Plantations or around 99.56 percent, then land from PBN 0.36 percent and PBS land 0.07 percent (BPS 2023).
With successful sales in the domestic market, they are trying to expand globally by bringing the taste of authentic Indonesian coffee to the international arena through a cross-border production and distribution network, as well as becoming part of Global Production Network (GPN) which is larger. Until 2021, Kopi Kenangan successfully opened more than 400 branches with global expansion plans to ASEAN, supported by international funding of 1.3T which makes Kopi Kenangan become a unicorn with a valuation of more than 1 billion US dollars. With expansion into Asian countries and potential to grow further, their journey reflects how local coffee businesses can compete in international markets through innovation, product adaptation and cross-border collaboration.
Global Expansion Mission Strategy
Kopi Kenangan known as New Retail F&B Unicorn, the first in Southeast Asia, and successfully inaugurated its first outlet in Suria KLCC, Malaysia in 2022, as the first step in realizing its global expansion mission. Malaysia was chosen as the first overseas outlet because of lifestyle Malaysia against F&B, stable development of coffee culture with a business model grab-and-go, and cultural similarities between Malaysia and Indonesia. After successfully opening 48 outlets in Malaysia, Kopi Kenangan then opened a new branch in Singapore in 2023. The aim is to introduce quality Indonesian coffee at an affordable price and accessible to everyone. On November 12, 2024, Kopi Kenangan had the opportunity to inaugurate its newest outlet in the Philippines. The opening of this outlet was also carried out through economic diplomacy, with direct support from the Indonesian Embassy in Manila and the Trade Attache (Atdag). Kopi Kenangan not only focused on conventional business strategies, but also utilizing diplomatic networks to build mutually beneficial relations between Indonesia and the Philippines.
It’s different from Kopi Kenangan, Kopi Tuku focuses on introducing the unique taste of Indonesia through palm sugar coffee to the world. Palm sugar is used not only as a sweetener, but also as a symbol of Indonesia’s culinary cultural heritage. Palm sugar is promoted as an element that reflects Indonesia’s rich traditions, strengthening its appeal to Kopi Tuku abroad as an authentic and innovative product. Kopi Tuku often appears in international events such as Amsterdam Coffee Festival And World of Coffee Busan to promote “kopi susu tetangga” with palm sugar as the main attraction. To reach the global market, Kopi Tuku is taking steps to collaborate with local partners, such as Kornerd Coffee in South Korea, which supports operations pop-up store in Gangnam and introducing Indonesian flavors in March 2024. With a partnership with Kornerd Coffee, TUKU took the initiative to combine Indonesian coffee with the sophistication of the South Korean coffee industry. Kopi Tuku chose a pop-up in Seoul, Gangnam-gu for two months, because of its strategic location to reach the South Korean people who are one of the highest coffee consumers per capita in the world.
Production and Resource Chains
Both Kopi Kenangan and Kopi Tuku prioritized the use of genuine, high quality Indonesian coffee beans and the use of authentic local palm sugar. At the moment Kopu Tuku had the opportunity to collaborate with local palm sugar farmers from Cianjur which is produced from palm juice into shell palm sugar. High technology is also adapted for coffee processing and packaging to maintain product quality. Kopi Kenangan, in its expansion to the Philippines, utilized economic diplomacy channels to expedite the distribution process and gain support from Indonesian diplomatic representatives. Both brands also ensure that all coffee products shipped meet local regulatory requirements, such as labeling and food safety certification, which is an important part of their international distribution strategy. With mature management at every stage of the supply chain, production and distribution, Kopi Kenangan and Kopi Tuku can maintain high product quality and positive response from international markets.
Adaptation and Innovation
Kopi Kenangan and Kopi Tuku introducing new variants that suit the trends and preferences of each country. Kopi Kenangan makes specialty coffee for Malaysia, namely its flagship menu, Kenangan Latte which is adapted from the mainstay menu in Indonesia, namely Kopi Kenangan Mantan, and Avocado Coffee as well as various other coffee choices. The prices presented are of course adjusted to market conditions which are quite affordable with the existing quality. Besides specialty coffee, Kopi Kenangan also serves delicious coffee accompaniments. Cooperation Kopi Tuku and Kornerd Coffee as local partners help understand existing market dynamics and adapt products and services to better suit local needs.
Not only paying attention in terms of products, the two brands also make loyaltyprograms as a form of innovation to strengthen relationships with customers and increase consumer retention. This loyalty program allows customers to earn more benefits, such as points reward which can be exchanged for special products or promotions. This aims to create a more personalized customer experience and encourage repeat visits to outlets. Kopi Kenangan presents it in the form of a VIP program which is specially presented with many special benefits for consumers such as birthday treats and regular cashback. Meanwhile, Kopi Tuku also introduced a similar approach by providing Rukun Tetangga Card services that take into account consumer loyalty, such as discounts or special access for members.
Economic and Diplomatic Support
There are trade agreements between countries, namely the ASEANFree Trade Area (AFTA) has an important role in global expansion Kopi Kenangan and Kopi Tukuby reducing tariffs and trade barriers. AFTA enforces a free trade zone for ASEAN members by eliminating import tariffs for certain products, including food and beverage products. This makes it easier for Indonesian coffee to be exported to ASEAN countries at a more economical cost. Apart from AFTA, the global expansion of both is also made easier by its existence Regional Comprehensive Economic Partnership (RCEP). RCEP helps simplify customs procedures and unify trade regulations, making it easier for businesses to navigate global trade. This efficiency is very beneficial for both brands who depend on a consistent and timely supply chain in sourcing coffee beans and distributing products. Through the use of RCEP, Kopi Kenangan and Kopi Tuku can increase their competitiveness and efficiency, allowing more effective expansion into other Asian markets.
Success Kopi Kenangan and Kopi Tuku in introducing authentic Indonesian coffee to international markets reflects the dynamics of GPN, which connects local production with global markets. Through active involvement in GPN, Kopi Kenangan and Kopi Tuku not only export products but also Indonesian culture and values. Both are examples of how small-medium enterprises (SMEs) can access global markets by utilizing international production networks. Cross-border collaboration and careful economic diplomacy reduce structural barriers, enabling deeper integration into the GPN.
Overall, the trip Kopi Kenangan and Kopi Tuku shows that GPN is not just about physical production but also value transfer, innovation and cultural adaptation. This opens up great opportunities for Indonesian products to become more widely known, making globalization not only a challenge but also a great opportunity for local entrepreneurs.
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