Southeast Asia has a wealthy historical past of each espresso manufacturing and consumption. Lately, pushed by altering shopper preferences, urbanisation, and thriving café tradition, the area’s espresso market has undergone fast progress and evolution.

Nations like Indonesia have emerged as key markets for specialty espresso retailers and chains, with a rising emphasis on high quality, experiential consumption, and trending flavours.

To cater to the rising demand for various and premium choices, extra specialty espresso companies in Southeast Asia have began roasting espresso themselves. This raises high quality requirements to even larger ranges and presents new alternatives to drive additional market progress.

I spoke to a few individuals on the Indonesian specialty espresso roaster Baked Espresso to grasp extra about how the rise of roasting in Southeast Asia is reshaping the area’s specialty espresso market

You might also like our article on the evolution of handbook brewing in Indonesia.

How Southeast Asian espresso tradition has developed

Southeast Asia has a deep-rooted reference to espresso. Between the 1600s and 1800s, European colonisers launched seeds to international locations together with Vietnam, Indonesia, Myanmar, and the Philippines. Business manufacturing was rapidly established, particularly in Vietnam and Indonesia, that are the second and fourth-largest producers of espresso on the planet, respectively.

As Southeast Asia’s largest nation, Indonesia’s manufacturing volumes elevated to 12 million 60kg baggage within the 2022/23 harvest season, which accounted for six% of the worldwide provide throughout this era. Espresso tradition is a key a part of on a regular basis life for many individuals, however traditionally, the vast majority of higher-quality beans had been exported.

Decrease-quality espresso (together with robusta) bought within the home market was usually roasted darkish to masks overly bitter flavours. The addition of sugar, sweeteners, condensed milk, and varied spices was additionally common, particularly in conventional kopitiam cafés, which nonetheless serve these drinks at present.

The emergence of second wave espresso in Indonesia within the early 2000s, nonetheless, basically modified shopper preferences. Massive chains launched customers to espresso-based drinks, however they price greater than 30% of the median each day revenue of individuals in Indonesia, inevitably limiting market progress.

Over the next years, the launch of home espresso chains spurred the demand for extra reasonably priced but higher-quality choices – making specialty espresso accessible to extra individuals within the nation.

Specialty espresso takes off

Constructing on the success of huge chains in Indonesia, a rising variety of smaller unbiased specialty espresso retailers are opening within the nation. One is Baked Cofcharge, a roaster and bakery that operates six places, together with grab-and-go brew bar codecs, throughout Jakarta and Bali. The corporate can even open a devoted roastery in Bali on the finish of November 2024 and a flagship retailer in Jakarta in early 2025.

Gustav Johannes Groenendijk is the CEO and founder. “Customers are extra educated, and youthful generations have extra various preferences for espresso,” he says. “Instances are altering, and with know-how, customers need one thing new, so their expectations change into larger. This fuels the expansion of the specialty espresso market.”

With a rising center class that has the next disposable revenue, premium espresso has change into extra accessible to Indonesian customers who’re more and more prioritising each high quality and comfort. Much like product innovation in additional mature markets, high-quality ready-to-drink (RTD) espresso is rising in popularity in Indonesia and throughout Southeast Asia.

Julia Ammor is the Advertising and marketing and Artistic Director at Baked Espresso. She explains how the roaster sells three RTD choices, together with an oat milk latte and chilly brew, to faucet into this burgeoning market.

“The choice to launch RTD merchandise displays our response to evolving shopper preferences and the rising demand for comfort with out compromising high quality,” she says. “It’s a strategic transfer to cater to a market that’s more and more searching for high-quality, on-the-go espresso choices that mirror the café expertise.” 

Though conventional café tradition continues to be prevalent in Southeast Asian international locations, altering shopper preferences imply espresso retailers and roasters within the area are diversifying their merchandise to cater to a wider vary of wants.

“Customers will not be solely extra conscious of specialty espresso however are additionally searching for methods to take pleasure in it past the normal café setting,” Julia provides. “This shift signifies a deeper appreciation for high quality espresso, in addition to a readiness to discover new codecs and flavours, which is a optimistic signal of the market’s evolution.”

The emergence of specialty espresso roasters in Southeast Asia

The expansion of the Southeast Asian specialty espresso market reveals no indicators of slowing down, particularly in Indonesia. In accordance with information from World Espresso Portal, the nation’s branded espresso store market will attain over 4,000 shops by 2025.

To capitalise on this burgeoning business, a rising variety of Indonesian espresso companies have began to roast their very own espresso. In flip, these manufacturers are driving the development of roasting espresso at origin and dealing to retain extra worth in producing international locations.

Given its distinctive place as each a producing and consuming nation, many Indonesian roasters are sourcing regionally grown espresso to focus on the standard and variety of arabica and robusta.

Matt Johnson is the top roaster and head of espresso at Baked. He explains why the corporate completely sources from Indonesia.

“Why import beans from the world over when we’ve glorious espresso on our doorstep?  Environmentally and logistically, it simply is sensible,” he says. “We additionally need to help and assist develop our native communities by working straight with producers.”

Gustav explains that this ties into Baked’s Origin Zero roastery idea. By sourcing Indonesian espresso and roasting at origin, the roaster goals to minimise environmental impression, shorten its provide chain, and accomplice with native farmers in several areas of Indonesia.

“Origin Zero is our name to motion and dedication to leaving a optimistic legacy on Indonesia’s espresso panorama,” he says. “We need to redefine what it means to be a sustainable roastery, honouring our origins whereas striving in the direction of zero impression.”

Sharing a reference to producers

Indonesia’s market place is exclusive. As each a producing and consuming nation, it drives innovation at each ends of the provision chain.

Matt says that the shared connection of being positioned at origin helps to strengthen working relationships. 

“Throughout notably moist or dry seasons, we share this expertise with farmers. It reminds us that espresso is greater than a commodity,” he explains. “When roasting in a rustic of origin, you get to construct long-lasting relationships with producers, guaranteeing they obtain larger costs and creating a direct suggestions loop.”

As a part of its Origin Zero ethos, Baked additionally works with Indonesian farmers to implement high quality management and local weather adaptation and mitigation practices, supporting the way forward for the nation’s espresso manufacturing.

“It’s thrilling figuring out whether or not on-farm experimentation and innovation will repay,” Matt says. “Then, simply weeks later, due to our proximity, we will roast and cup the coffees.”

How might the area’s market evolve sooner or later?

The Southeast Asian espresso market is poised for additional progress and innovation within the coming years. In accordance with information from the USDA, Indonesia’s 2024/25 espresso consumption will rise by 10,000 60kg baggage to 4.8 million in whole as each branded and specialty espresso retailers and roasters supply customers extra selection than ever earlier than.

As seen in additional established markets world wide, Julia believes that sustainability will change into an even bigger precedence for Indonesian specialty espresso drinkers.

“There can be a stronger push in the direction of zero-waste practices and upcycling espresso by-products. At Baked’s zero-waste roastery, our operations primarily deal with environmental safety and galvanizing others to see that significant change is achievable on a neighborhood scale.

“We’re additionally exploring upcycling and waste discount initiatives, akin to creating progressive drinks utilizing cascara and repurposing unsold sourdough bread into a novel delicate serve providing,” she provides. “Moreover, we’re investigating methods to upcycle espresso cherry skins into compost or fertiliser, guaranteeing they’re redistributed via a brief provide chain.”

Innovation in manufacturing and processing

Southeast Asia is dwelling to a few of the most established and important coffee-producing international locations on the planet. Because the area’s consumption grows, it’s clear that evolving shopper wants are additionally influencing developments in farming and processing.

“The Indonesian and Southeast Asian specialty espresso markets will preserve evolving as international demand for espresso will increase,” Gustav says. “Indonesia’s distinctive varieties and areas, together with the attention of sustainability and traceability, will increase worldwide recognition. Rising markets within the area are shifting in the direction of specialty-grade manufacturing to satisfy demand, however funding in infrastructure, know-how, and finest practices is required to maintain up with innovation in different producing international locations.”

Furthermore, ladies are believed to account for as much as 24% of Indonesia’s farmers. As ladies are sometimes unnoticed of decision-making and management roles in espresso manufacturing, offering help creates a useful alternative to enhance their profession alternatives and enhance monetary stability

“There’s a lot extra than simply the roasting side behind every cup of espresso,” Gustav says. “Transparency and traceability deliver one other stage of depth in the direction of the method, and thankfully, we’ve this on our doorstep as a roaster at origin.”

The evolution of the Southeast Asian espresso market has opened up new prospects for high quality, comfort, and selection for the area’s customers. With premium espresso choices now thought-about an reasonably priced luxurious, a brand new wave of specialty espresso retailers and roasters are discovering success out there.

Indonesia is a key instance of this explosive progress, with increasingly more companies roasting locally-grown espresso. “The nation’s espresso business is evolving with the occasions, adapting to the altering international market whereas staying true to its roots,” Julia concludes.

Loved this? Then learn our article on how Indonesian robusta manufacturing has developed.

Picture credit: Baked Espresso

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