Efforts To Save Coffee Processing IKMs Affected By COVID-19

Illustration. (Photo: Unsplash)

JAKARTA - Small and Medium Industry (IKM) coffee processing is one of the sectors affected by the COVID-19 pandemic. Therefore we need a joint strategic step in order to arouse their business enthusiasm.

"In a situation like this, it is very important that all parties work together, starting from the government, industry players, Indonesian technology companies to the community. So that economic activities can continue amid the COVID-19 pandemic," said Industry Minister Agus Gumiwang Kartasasmita in Jakarta, Monday 20 April.

The Minister of Industry said that currently there are 1,204 IKM players who process local coffee beans from farmers in various regions in Indonesia. "With the support of the availability of raw materials and large market potential, so far the coffee processing industry has been able to make a significant contribution to the national economy," he said.

The Ministry of Industry noted that this contribution, for example, was recorded in the export achievements of processed coffee products which reached US $ 579.98 million throughout 2018, an increase of 19.1 percent compared to 2017 revenues.

Exports of processed coffee products from Indonesia, which are dominated by instant coffee products, extracts, coffee essences and concentrates, have penetrated a number of foreign markets in ASEAN, China and the United Arab Emirates.

However, the COVID-19 pandemic brings various challenges for every level of society, including coffee business players. For example, coffee shops and cafes that were affected by the lack of visitors, some even closed due to slumping sales.

In addition, a number of coffee farmers in Aceh have even complained about a 50 percent drop in the selling price, which was previously priced at IDR 10,000 per bamboo (wet selling price) to only IDR 5,800.

In order to arouse domestic coffee business players, the Ministry of Industry together with the Ministry of Tourism and Creative Economy (Kemenparekraf), Tokopedia, as well as local coffee industry players, initiated the #SatuDalamKopi campaign. This collaborative step aims to advance Indonesian coffee while at the same time keeping the economy moving amid the COVID-19 pandemic.

"The #SatuDalamKopi campaign is a clear example of how we together can take part in encouraging the marketing of local coffee products through cafes, coffee shops and the wider community which in turn will have an impact on the stretching of the coffee industry in the region and the entire supply chain," said the Minister of Industry.

The #SatuDalamKopi national campaign which will be held on April 20-26 2020 at Tokopedia will involve nearly 1,200 coffee industry players from all over Indonesia. Not only coffee industry players, coffee lovers can also participate in enlivening the #SatuDalamKopi campaign which was held for seven days.

The Director General of Small, Medium and Miscellaneous Industry (IKMA) of the Ministry of Industry, Gati Wibawaningsih, said that processed coffee IKMs are scattered in various production centers spread across various regions in Indonesia.

Furthermore, Gati assessed that in recent years the demand for coffee in Indonesia has started to increase because drinking coffee in the community has become part of the lifestyle. In fact, the habits of public figures have also influenced the behavior of people who are increasingly fond of coffee.

"To increase the competitiveness of processed coffee IKM, we already have various facilities, including to encourage the use of the latest technology to be more productive, innovative, and competitive," he explained.

Maintain Economic Growth

Menparekraf, Wishnutama Kusubandio admitted, the performance of the local coffee industry in recent years has increased significantly and has helped improve the Indonesian economy.

"In the midst of the current pandemic, we invite various parties to unite in an effort to help local coffee business owners and farmers survive and maintain Indonesia's economic growth," he said.

Tokopedia CEO and Founder, William Tanuwijaya, revealed that this joint initiative with the government and local coffee industry players is in line with one of Tokopedia's top priorities in the #JagaEkonomiIndonesia campaign to keep Indonesia's economy moving by ensuring local business people can continue to do business through Tokopedia.

"In addition, we are also committed to ensuring that people can meet their needs without having to leave the house," he said.

Through #SatuDalamKopi, Tokopedia facilitates local coffee industry players to maintain business continuity by starting to sell online. In collaboration with the Ministry of Industry and the Ministry of Tourism and Creative Economy, coffee activists, from coffee bean processors to coffee drink creators, collaborate in this activity.

Relying on online sales by utilizing platforms such as Tokopedia, has become a mainstay strategy for coffee farmers and entrepreneurs to maintain sales and price stability. Various product innovations and new approaches have been spawned so that these coffee farmers and entrepreneurs can maximize their online potential.

One example of a coffee entrepreneur who has maximized his online business through Tokopedia is Tuku Coffee. Kopi Tuku has even released various new products that are more suitable to be explored on online platforms, such as instant ground coffee to one liter ready-to-eat coffee.

The use of the right online platform to record astonishing results for Kopi Tuku. Starting from sales that are selling well to expanding the reach of customers which can now cover all of Indonesia.

The product consistently runs out in a matter of minutes. Tens of thousands of liter coffee bottles are sold per week.

Dua Coffee is another example of hundreds of local coffee businesses that have chosen to maximize their online business through Tokopedia since the COVID-19 pandemic. According to Omar Karim Prawiranegara, co-founder of Dua Coffee, shifting focus to selling online at this time is a necessity.

Omar said that online sales are now the backbone of his business. According to him, about 80 percent of sales at his shop come from online orders on Tokopedia. Through Tokopedia, Dua Coffee sells a variety of products such as coffee beans, ground coffee, and one liter bottle coffee.

In addition, Dua Coffee also innovates by presenting food products, such as frozen food, ready-to-eat food and snacks.