Indonesian Coffee Competitors in South Korea
Indonesian Coffee Competitors in South Korea
During the period of 2019–2023, South Korea’s coffee import trends showed significant growth. Indonesia ranked 7th among the top 10 coffee supplier countries for South Korea. Based on this data, Indonesian coffee competitors primarily include producers from Latin America such as Brazil, Guatemala, Colombia, and Peru. Competitors include India and Vietnam, among others from Asia. Producers from Africa, such as Ethiopia and Kenya, also present notable competition. Regarding import volume, trends between 2019 and 2023 also increased, although not significantly. Competitor Strategies of Coffee Producers ITPC Busan conducted surveys with several roasteries that also act as coffee importers in South Korea to identify key considerations or important information that influence importers when purchasing coffee. Roasteries surveyed and consulted with ITPC Busan included Harris Coffee, Coffee Spell, and JN Beans. Price Price is the main factor for importers when purchasing coffee. Indonesia generally produces two types of coffee: Robusta and Arabica. However, Indonesian coffee faces price competition from Vietnam for Robusta coffee, as the prices of both countries’ coffees are seen as more attractive to importers, resulting in better profit margins for end-product sales, even though Indonesian coffee is of higher quality. For Arabica coffee, Indonesia competes with producers from Latin America and Africa. Despite similar quality and flavor profiles, Indonesian Arabica coffee must compete on price with Brazilian and Peruvian coffee. African producers, such as Kenya and Ethiopia, also compete in the same premium category. Additionally, Arabica coffee from India is popular among South Korean roasteries. One roastery noted that to maximize profit, they blend Indonesian coffee, known for its strong aroma and flavor, with coffee from other countries that offer more competitive pricing. This creates a coffee flavor profile that meets the preferences of the South Korean market while maintaining competitive prices. Perception (Brand Image) Another influential factor is consumer perception. Geisha coffee is already well-known as a premium coffee in South Korea. For this type of coffee, such as Panama Geisha, there is a distinct market and high price point. For example, Shinni Coffee in Busan sells a cup of Geisha coffee for KRW 50,000. Shinni does not stock large quantities of this coffee due to its small market, but it has dedicated customers. Ethiopian and Kenyan coffees are often favored for the middle and premium coffee markets. Coffees from South America and Africa are considered to have unique flavor profiles that appeal to many South Korean consumers. On the other hand, Indonesian coffee still requires stronger promotion and awareness among South Korean coffee drinkers. Consistency of Quality One roastery noted that the consistency of Indonesian coffee quality is still lacking compared to other countries. For example, in a 1-ton shipment, inconsistencies in quality can still be found between the agreement made by the exporter and importer. This causes importers to prefer coffee from other countries, and Indonesian coffee is often used only as a blend to enhance or enrich the flavor. Additional Market Information Indonesian coffee comes from many regions within the country, which has both positive and negative impacts. The positive aspect is that Indonesian coffee is known for its wide range of taste notes. This allows roasteries to be creative and explore unique blends that may appeal to the South Korean market. However, on the downside, this diversity does not create a specific brand image for Indonesian coffee. In contrast, coffee from Ethiopia or Kenya is simply recognized as “coffee from Ethiopia” or “coffee from Kenya.” For Arabica coffee, the most recognized Indonesian coffee is Mandailing coffee. However, according to discussions, many other regions in Indonesia have coffee with great potential for the South Korean market, such as coffee from Bali, Toraja, and other areas. ITPC Busan plans to try a single-brand approach to promote Indonesian coffee. ITPC Busan will collaborate with several roasteries to create a brand named “INDONESIA BLEND” for the product. This idea is currently in the negotiation stage, and some roasteries have already expressed interest in the concept. The initiative is expected to launch in 2025.
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