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Indonesian coffee wave sweeps Singapore as local Flash Coffee quit

Indonesia’s coffee culture flourishes in Singapore with Kenangan Coffee, Fore Coffee, and Tanamera’s expansions.

At the same time, the local Flash Coffee shuttered its 11 outlets, citing a ‘strategic shift’ for profitability, redirecting focus to high-potential markets beyond Singapore.

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SINGAPORE: The Indonesian coffee wave is sweeping through Singapore, with popular chains such as Kenangan Coffee, Fore Coffee, and Tanamera expanding their presence in Lion City.

Despite the challenges faced by some coffee chains in the market, these Indonesian establishments seem to be thriving, capitalizing on Singapore’s robust coffee culture.

Kenangan Coffee, a well-known Indonesian coffee chain, marked its entry into Singapore with a spectacular debut at Raffles City Shopping Centre in September.

Co-founder and CEO Edward Tirtanata reported that the outlet achieved its highest daily revenue, selling more than 1,500 drinks on its opening day alone.

Renowned for its signature Kenangan latte featuring Java’s palm sugar, Kenangan Coffee is expanding with outlets at Changi Airport and Ngee Ann City.

According to the Straits Times, a Kenangan Coffee spokesperson emphasized the global visibility of Singaporean outlets, considering the influx of foreign tourists.

In 2022, the franchise inaugurated its initial international branch in Malaysia.

The inaugural outlet of Fore Coffee at Bugis Junction, Singapore. (Photo: herstory.co.id)

Indonesian chains capitalize on Singapore’s central role

Fore Coffee, another Indonesian chain, mirrored Kenangan Coffee’s success with nearly 3,000 cups sold during its opening weekend at Bugis Junction in November.

A Fore Coffee spokesman stated that Singapore serves as the “central business district” of Southeast Asia, influencing the decision to expand to the Republic.

Tanamera, with nine outlets in Singapore since its 2020 debut in Change Alley, expressed its long-standing goal to enter the market, citing factors such as close ties between the two countries and Singapore’s significant spending power.

Despite the departure of some coffee franchises in Singapore, the Indonesian chains remain undeterred.

Tanamera’s co-director, Mr Ronald Liong, remains confident, emphasizing the brand’s unique offering of coffee and Indonesian cuisine like sop buntut (oxtail soup), tahu telur, and nasi goreng.

Tanamera Coffee inaugurated its initial global branch at Change Alley Mall in Singapore. (Photo: The Jakarta Post)

Market trends and growth prospects

Data analytics firm GlobalData reported a 3.2% compound annual growth rate in Singapore’s coffee market sales between 2022 and 2027.

Perfect Daily Grind, a coffee news publication, noted that Singapore’s annual coffee consumption is around 15,000 tonnes, equivalent to about 2.6kg per capita.

The report also highlighted Singapore’s position as a close contender to Japan, Asia’s largest consumer of coffee.

Indonesia, being the fourth-largest producer of coffee globally, has a rich coffee heritage that is gaining international recognition.

Mr Kasmito, the founder of the Indonesian coffee roasting company Maharaja Kopi, expressed that Indonesian coffee flavours have yet to be fully explored by the world.

In addition, the United States Department of Agriculture forecasted a 7% increase in Indonesia’s coffee production in 2023 to about 11.35 million 60kg bags.

The recent success of Indonesian coffee was highlighted in November at the World Coffee Championships in Taiwan, where Mr Taufan Mokoginta from Indonesia won the title of World Coffee Roasting Champion, surpassing contenders from over 30 countries.

Tanamera’s Mr Liong sees coffee as a potential “masstige” product for Indonesia, combining mass production with a luxurious image.

He envisions using coffee as a diplomatic tool, projecting Indonesia’s soft power and bringing economic benefits to its people.

Home-grown coffee chain throws in the towel

Despite the proactive efforts of Indonesian coffee chains in the competitive Singapore market, running a successful coffee chain here presents numerous challenges, and the competition is expected to intensify further.

The landscape has witnessed a surge in technology-driven coffee establishments, amplifying the competition for current players.

Luckin Coffee from China, which entered Singapore in March, swiftly established 24 stores, contributing significantly to the escalating competitive environment.

Contrastingly, Flash Coffee, a homegrown Singaporean coffee chain, announced the closure of its 11 outlets islandwide in October, attributing the discontinuation of its Singapore operations to a “strategic shift” for enhanced profitability and sustainability, focusing on more promising markets.

On October 13, the Food, Drinks and Allied Workers’ Union disclosed that outstanding salaries for Flash Coffee workers include 75% of their September salaries, wages until October 12, and the conversion of unused leave days into monetary compensation.

Last month, the coffee chain also reportedly faced outstanding debts totalling S$14.9 million (US$11 million) owed to approximately 120 creditors.

Another casualty in the coffee industry is Spinelli Coffee, an American-style chain operated by Singapore-based YTC Corporation.

The recent closure of all six remaining outlets in Singapore, reported by The Business Times (BT) on 29 Nov, marked the conclusion of its 27-year presence in the country.

This decision to cease operations follows a series of financial losses incurred by the company from the Financial Year (FY) 2018 to FY 2022.

In its full-year financial report ending on December 31, 2022, Spinelli Pte Ltd disclosed a net loss of S$839,638, showcasing an improvement from the previous financial year’s loss of S$943,931.

Despite this, the revenue for FY2022 increased to S$1.8 million from S$1.6 million in FY2021.

However, the company faced a challenging financial situation with total assets amounting to S$823,444 and total liabilities soaring to S$15.5 million for the year ended December 31, 2022.

Moreover, the company reported a negative cash flow of S$228,029 from its operating activities, indicating ongoing financial difficulties.

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never heard of these indon coffees at all. more money laundering?

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