Indonesia’s Kopi Kenangan Aims To Be The Largest Coffee Chain In Southeast Asia

Forbes

Entrepreneur Edward Tirtanata, who has found a sweet spot in Indonesia’s competitive coffee-selling business, aims to sharply expand in coming years.  Read the full story on Forbes: https://www.forbes.com/sites/gloriaharaito/2024/08/28/indonesias-kopi-kenangan-aims-to-be-the-largest-coffee-chain-in-southeast-asia/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, Indonesia's Kopi Kanangan aims to be the largest coffee chain in Southeast Asia.

00:08Entrepreneur Edward Tertanata, who has found a sweet spot in Indonesia's competitive coffee-selling business,

00:15aims to sharply expand in coming years.

00:18The co-founder and group CEO of Southeast Asia's first food and beverage unicorn, Kopi Kanangan,

00:24says the unlisted firm is Indonesia's largest coffee chain, now selling nearly 6 million cups a month.

00:31Revenue in 2023 was $106 million, and Tertanata expects it to increase 32% this year to $140 million

00:40and to quadruple to $430 million by 2028.

00:45That's just one of his ambitious goals.

00:47He aims to go to more countries.

00:49At present, the only overseas outlets are in Singapore and Malaysia.

00:53And he wants 3,000 sales points by 2028, compared with nearly 1,000 now.

00:59Tertanata also aims to get at least $100 million in pre-IPO funding by 2028, and then get listed by 2029.

01:08The company, Kopi Kanangan, aims to open in more countries,

01:13with both fully-owned stores and franchises under the name Kanangan Coffee.

01:18It's partnering with Fredly Group of Companies as franchise holder in the Philippines

01:22to open stores there, starting in October.

01:25Early next year, the chain plans to have fully-owned stores in India.

01:30Tertanata, who is 35 years old, told Forbes Asia,

01:41Kopi Kanangan means, quote,

01:48According to a survey this year by YouGov, a British market research firm,

01:52Kopi Kanangan was the top-of-mind coffee chain in Indonesia,

01:56ahead of John Gigiwa, Starbucks, and Jayco Donuts & Coffee.

02:01A key to success has been how Kanangan prices its wares.

02:05The bestseller, Kopi Kanangan Mantan, a palm sugar latte,

02:09is 22,000 Indonesian rupiah, approximately $1.40.

02:14That's midway between the 40,000 rupiah that some cafes charge for a premium coffee

02:19and the 5,000 rupiah for a street vendor's cup made with lower-quality beans.

02:24Helping Kanangan keep rent costs down is how 80 percent of outlets in Indonesia

02:29are grab-and-go and there isn't seating.

02:32Tertanata says he intends to eventually have a 50-50 balance of cafes and grab-and-go stores.

02:38Tertanata, the oldest of three children,

02:41showed an entrepreneurial spirit during high school,

02:44selling old Pokemon cards and Ragnarok bots.

02:48He moved to the U.S. in 2007 to study finance and accounting

02:51at Boston's Northeastern University.

02:54After his parents said they had financial difficulties,

02:56he scaled up his class load and graduated in two and a half years.

03:01He later started talking with high school friend James Pernanto

03:04about opening a grab-and-go coffee chain that would have more scope for expansion.

03:09Tertanata felt it didn't make sense for most Indonesians to consume expensive coffee every day,

03:14as the cost would be equivalent to one-third of Jakarta's minimum wage.

03:18But prospects could be good for offering, quote,

03:21something that is affordable for people to actually drink every day.

03:25In 2017, Tertanata, Pernanto, and Cynthia Cerunisa co-founded Bumi Berkaboga,

03:32the operator of Kopi Kanangan, with an investment of 150 million rupiah.

03:37Pernanto, an alumnus of the Forbes 30 Under 30 Class of 2019,

03:41is chief business development officer, and Cerunisa is chief marketing officer.

03:47In its first year, Kopi Kanangan had one store.

03:50To expand, the company in 2018 raised $8 million in seed funding

03:55from Indonesia-based venture capital firm Alpha JWC Ventures,

03:59which later exited with an internal rate of return of 150%.

04:04From inception through 2021, the company raised over $230 million

04:09through multiple funding rounds from investors including Peak 15 Partners,

04:13formerly Sequoia India and Southeast Asia,

04:16Jay-Z's venture capital firm Arrive,

04:19Serena Williams' Serena Ventures,

04:21Singapore's GIC,

04:23Li Keqing's Horizons Ventures,

04:26and Eduardo Saverin's B Capital.

04:28The latest funding round, in December 2021,

04:32made it the first food and beverage unicorn startup in Southeast Asia.

04:37For full coverage, check out Gloria Jareto's piece on Forbes.com.

04:43This is Kieran Meadows from Forbes. Thanks for tuning in.

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