Indonesia is known globally as one of the largest coffee producers. From Sabang to Merauke, the archipelago offers diverse coffee varieties with distinctive taste and aroma profiles—such as Gayo from Aceh, Toraja from Sulawesi, and Kintamani from Bali.

This diversity gives Indonesian coffee a strong global appeal. However, the potential cannot be fully realized if coffee is sold only as raw beans without further processing.

From Bean to Business: The Economic Role of Coffee Processing

According to the Central Bureau of Statistics (2023), Indonesia ranked fourth among the world’s top coffee producers in 2022. The agroindustry plays a vital role here. It goes beyond processing raw agricultural output into consumable products. It also involves distribution, marketing, and product innovation.

Coffee agroindustry includes roasting, grinding, and creating derivative products like instant coffee and ready-to-drink packaged coffee. This process gives coffee a “new life” and helps local products compete in global markets.

As stated by the Ministry of Agriculture (2021), developing the agroindustry is a key strategy to enhance the competitiveness of Indonesian coffee internationally. Integrated processing, distribution, and marketing increases its overall economic value.

Why Agroindustry Matters for Indonesian Coffee Farmers

The agroindustry increases the added value of coffee. Raw beans, usually sold at a low price, can be transformed into premium packaged products worth significantly more.

For example, one kilogram of raw beans may only fetch tens of thousands of rupiah. When processed and attractively packaged, its market price increases considerably.

Agroindustry also improves farmer welfare. Farmers can participate in the processing and marketing chain, offering more stable and sustainable income compared to relying solely on raw bean sales.

In addition, coffee processing activities create jobs—from production and packaging design to distribution and marketing. This stimulates local economies, especially in coffee-producing regions.

Agroindustry further enhances the global competitiveness of Indonesian coffee. With high-quality standards, certifications, and strong branding, Nusantara coffee can better compete in the international market.

Success Stories from the Archipelago’s Coffee Hubs

Several Indonesian coffee agroindustry success stories already exist. Gayo coffee, for example, is well-known in Europe and the United States, supported by effective post-harvest handling and organic certification.

Kopi Luwak demonstrates how product innovation can significantly raise market value, despite ongoing debates around ethical concerns.

The rise of local coffee brands in the past decade also shows how the agroindustry has helped elevate the image of Indonesian coffee.

According to the Ministry of Agriculture (2021), the growth of local coffee shops in Indonesia has significantly increased, contributing to higher demand for processed coffee products.

East Ventures, a leading venture capital firm, was recently awarded the 2025 VC Deal of the Year by the Singapore Venture and Private Capital Association (SVCA). This recognition highlights East Ventures’ investment in Fore, a fast-growing Indonesian F&B company managing popular premium-affordable brands such as Fore Coffee.

Fore Coffee was incubated by East Ventures in 2018 with the vision of revitalizing Indonesia’s Arabica coffee industry through a modern specialty coffee brand. By June 2025, Fore operated 261 outlets across Indonesia and Singapore and completed an initial public offering (IPO) on the Indonesia Stock Exchange in April 2025. The IPO was oversubscribed by over 200%, demonstrating strong investor confidence despite market challenges.

Willson Cuaca, Co-Founder and Managing Partner of East Ventures, emphasized the unconventional journey they took to build Fore, highlighting the company’s operational sustainability and clear path to profitability.

Challenges in Elevating Quality and Farmer Participation

Despite its potential, Indonesia’s coffee agroindustry faces many challenges. Limited access to technology, capital, and skilled labor often hinders development. Many farmers still sell their crops in raw form due to a lack of processing facilities.

Fluctuating global coffee prices also affect farmer income. Without support from downstream industries, farmers often remain in a weak position in the supply chain.

In Kintamani, for instance, many farmers prefer to harvest their coffee prematurely to earn quick income. “Farmers are reluctant to do red cherry picking as recommended due to pricing and marketing patterns,” said Dr. I Made Sarjana, Environmental Science Lecturer at Udayana University.

Sarjana noted that many farmers sell their coffee while it is still on the tree, a practice known as tebasan. “In the end, they focus on quantity, not quality,” he added. Red cherry picking requires at least six months, with only two harvest cycles. In contrast, immature green cherries can be harvested three to four times in the same period.

Sarjana has encouraged red cherry picking, but acknowledged the difficulty in changing farmers’ habits. Meanwhile, the number of coffee farmers is declining. “Not many young people are interested in becoming farmers,” said I Kadek Edi, CEO of Karana Global.

Some children of farmers have shown interest in continuing their family business. They hope to use modern systems, such as agricultural digitalization, to improve productivity.

Global Expansion Through Innovation and Education

The Indonesian Coffee Development Education Foundation (KAPPI Global) brought Indonesian coffee to Japanese consumers at the Specialty Coffee Association of Japan (SCAJ) Conference 2025 and Expo 2025 Osaka.

“Indonesia’s participation in the exhibition reflects a long-standing partnership with Japan, especially in their shared passion for coffee,” said Maria Renata Hutagalung, Acting Charge d’Affaires of the Indonesian Embassy in Tokyo.

In addition to their booth with the Indonesian Embassy and Bank Indonesia, KAPPI also ran an independent booth showcasing the diversity of Indonesian coffee, farmer education, and coffee literacy through a documentary by Budi Kurniawan.

“The forum in Osaka continues our role as the Official Coffee Partner at the Indonesian Pavilion,” said KAPPI’s Moelyono Soesilo. “We are committed to helping farmers produce sustainable and effective coffee that meets export standards.”

KAPPI’s Roby Wibisono emphasized their focus on education, capacity building, and global standard compliance.

Yutaka Shibata, President of Key Coffee Inc. and Chairman of the All Japan Coffee Association, highlighted the need for consistent quality and sustainable supply. Indonesian coffee has long been favored by Japanese consumers.

For KAPPI, international exhibitions are just a platform. The real work lies in the field—through technical assistance, safe pesticide practices, sustainable farming, lab research, and youth regeneration programs to ensure Indonesian coffee remains competitive in global markets.

SOURCE:

https://www.goodnewsfromindonesia.id/2025/10/05/dari-biji-jadi-cuan-kenalan-sama-agroindustri-kopi-nusantara

https://www.kompas.com/food/read/2025/10/05/170000775/tantangan-jaga-kualitas-kopi-indonesia-petani-ingin-cepat-jual-hasil-tanam

https://jatim.antaranews.com/amp/berita/983685/kappi-bawa-kopi-indonesia-kembali-ke-jepang-lewat-scaj-dan-expo-2025

https://east.vc/id/berita/press-release/east-ventures-memenangkan-penghargaan-2025-vc-deal-of-the-year-dari-svca

PHOTO: AEKI AICE

This article was created with AI assistance.