Kopi Kenangan has more than 800 outlets since its beginning in 2017. - PHOTO KOPI KENANGAN via The Straits Times/ANN
JAKARTA, Feb 19 (The Straits Times/ANN): Indonesia’s billion-dollar coffee chain Kopi Kenangan began as an effort to address a most simple issue – cost.
Edward Tirtanata, co-founder and chief executive of the company, has been drinking at least three cups of coffee a day since he was young.
But he found the offerings from foreign coffee shop chains to be too expensive.
“Drinking three- or four-dollar cups of freshly brewed coffee stopped making any sense to me; and I don’t like instant coffee,” the 34-year-old told The Sunday Times.
“That is why I started Kopi Kenangan in 2017 – to have a more affordable alternative and to finally be able to consume three cups of freshly brewed coffee without breaking the bank.”
Drinks at its outlets start at 15,000 rupiah (S$1.30); a cappuccino costs 22,000 rupiah.
The chain made headlines in Indonesia and globally in December 2021, when a round of funding raised its value to above US$1 billion (S$1.3 billion), turning it into a unicorn.
Among its backers are musician Jay-Z and tennis star Serena Williams.
When asked about what it was like to have celebrities invest in his business, Mr Tirtanata said he was humbled by their interest and their belief in his brand.
“At the end of the day, whoever the investor is, if you have good fundamentals in your business... you can attract just about anyone willing to invest.”
Kopi Kenangan, which has more than 880 outlets in Indonesia, continues to expand.
It opened its first overseas store in Malaysia in October 2022, in Kuala Lumpur’s Suria KLCC mall, which sold more than 1,440 drinks on its second day of operations.
The company now has five outlets in Malaysia, and Tirtanata said there are plans to open more in 10 locations in the country. He also plans to expand Kopi Kenangan to Singapore, the Philippines and Thailand.
The company has also started selling bottled versions of its products in convenience stores and supermarkets in a bid to get into the fast moving consumer goods market segment.
Tirtanata said the customer is foremost in his thoughts, and he prioritises keeping prices affordable. Kopi Kenangan has been opening more outlets in residential areas, which Tirtanata initiated during the Covid-19 pandemic when his customers did not visit commercial districts owing to safe management measures.
Almost 55 per cent of Kopi Kenangan’s outlets are now in residential areas, compared with 17 per cent pre-pandemic.
And unlike at many other coffee chains in Indonesia, he and his team focused on implementing a grab-and-go system of selling drinks in their outlets.
About 90 per cent of Kopi Kenangan outlets do not have seating – they are small stalls or even repurposed cargo containers.
This way, the company does not have to spend on more service staff, Wi-Fi connection, or nice furniture, said Tirtanata, and is thus able to keep drink prices low.
But this does not mean a compromise on product quality, he added.
Tirtanata is personally involved in the development of new products, and tastes items before they go out to market.
But this means he no longer drinks just three cups of joe a day. He added that he has gained weight since he started his business as he has to try out so many “experiments” by his team.
“I drink more and more coffee and drinks now... It does not help with my diet,” he said, laughing. - The Straits Times/ANN
