The 4th Wave?

When Kopi Tuku arrived on the coffee scene in 2015, the specialty coffee communities were wandering, “do they make any profit by selling Rp 18.000 milk coffee using espresso machine?” At the time, Tuku was a humble, tiny coffee shop in Cipete who’s famous for its Es Kopi Susu Tetangga: espresso, milk, brown sugar and cream.

When we visit its latest outlet in Jalan Abdul Majid, South Jakarta, we spotted 2 La Marzoccos (one for iced coffee, another for hot coffee), each with 3 group heads, queueing Gojek drivers, and a roasting room responsible in roasting 6 ton of coffee bean per month to supply to 4 of Tuku’s outlets. In addition, the fact that the iced coffee milk concept was copied by many of Tuku’s imitators, we might need your help to repeat the question in the beginning of the article.

There are rumors spreading along in this iced coffee milk trend, thus we felt the urge to meet Andanu Prasetyo, or simply called Tyo, Kopi Tuku’s owner to listen to his background, the reason why he prefers to sell affordable coffee, to the President Jokowi’s visit to his outlet.

I heard you run a restaurant called Toodz House before Tuku?

Yes, it’s a regular restaurant selling food and beverage I built on 2010, back when I was a 5th semester student. The weird thing is, the only menu that sells well is
Carbonara Rice, my life and income 90% came from that meny, similar to Tuku with its Es Kopi Susu Tetangga. Actually, I prefer a business like Toodz, it’s been 7-8 years, not that popular, but it has nice traffic. I wondered why people don’t copy Carbonara Rice like they do with Es Kopi Susu Tetangga.

What’s the background story of this booming ice coffee trend?

I built Kopi Tuku on 2015, but it wasn’t as popular as it is now, I prefer it not to be trending, because Jakartans are very cruel to booming products. Just look at frozen yoghurts and mango drinks. Honestly, I rented the place before I had the business concept, very impromptu. My knowledge in F&B business is more to
coffee, so I was like curious, I wanted to have existence in coffee business. However, in my age, of course nobody listened to me, I didn’t have power in associations, I didn’t even have a coffee shop, people invite me for discussion, but I didn’t have any bargaining power.

Initially, I wanted to bring back coffee as functional drinks, not as lifestyle. Currently, people buy coffee emotionally, not because they need it, but actually, coffee is a commodity, so you have to play with volume, quantity, there has to be a certain amount. I think our coffee consumption is still low. People always say we need to help coffee farmers, but according to my knowledge, they’re in good position, they have their own land, they’re not labors. I don’t think we need to help by giving them tools or training, do they produce low quality coffee? We’re still the world’s 4th largest coffee producer in the world, mind you.

At the time, I was at a point where I was embarrassed when I was about to make a bid for coffee. How come I bid at lower price when I just need 1-2 sacks of coffee? Meanwhile, other companies who order tons of coffee only bid for slightly lower price. I was thinking, we should improve the downstream industry, because when we consume coffee in large quantity frequently, farmers will have no reason to sell their products to middlemen or exporters. If the downstream is promising, we should  be doing well, we’ll improve both the downstream and upstream.

So your vision is to raise coffee consumption?

Yes, but the consumption can’t increase if the coffee doesn’t taste good; or even if the taste is already good but the price is not affordable, how can we have frequent sales? I calculated the minimum wage, people’s lifestyle, and I came out with the ideal price Rp 18.000. I even have Rp5.000, Rp 9.000, Rp 25.000 to Rp35.000 coffee. The Rp 5.000 coffee is for drivers or the parking men, I sold it in coolbox and I put it on the parking lot, because the middle low people wouldn’t enter the coffee shop, the assume the price is high, it intimidated them.

That’s how you experiment with market segment?

Exactly, more like market skimming.

How were the beginning days of Kopi Tuku?

There were only 3 of us, sometimes I was alone in the shop, as cashier, roaster, and standing by at the bar, all at the same time. I know people would complain, “you can’t leave during roasting process!” that’s what the specialty people said. But I guess as long as the caramelization is right and the roast development is correct, it should be fine. 

After 5-6 months, we keep on growing, from 3 staffs to 5. In Toodz House, I’d be very happy if I can use 15kg coffee/month, now I consume 6 tons. Since opened the first time in Cipete on 2015, we opened our second outlet in Ruci Art Space in the beginning of 2016 before moving to Pasar Santa in the middle of 2016. After that, we opened the outlet in Bintaro in the mid 2017, and in here, Jalan Abdul Majid by the end of 2017. Currently, I’m looking for a new format to sell coffee.

I never say Kopi Tuku as the best tasting coffee ever, I just fill the gap between instant coffee and specialty coffee, from Rp 3.000-5.000/cup to more than Rp 30.000/cup, from sweet coffee to coffee without sugar. Tuku is a temporary concept at the current market situation.

What do you mean temporary?

I don’t know how the big players will react, how will they respond. We just gave stimulus to find out the market’s reaction, after this, will we accept it as a category in coffee business? Because we have specialty communities who think that this ice coffee trend is pulling the market backward, why should we tell people to drink coffee with sugar again?

I’ve heard those kinds of opinion, your response?

Basically, if you want to know the true taste of the coffee, don’t put any sugar. But for daily consumption, and we have the customers pay for their own coffee, I think we shouldn’t tell them what to do. As a barista, we have to think how to optimize what we have to meet customers’ demand. If my customers don’t want filtered coffee V60 using Panama Geisha bean with fruity notes, should I force it to them? As a barista, I felt like a failure when it happens.

So, in addition to the price gap, we also have gap on coffee knowledge?

Let alone knowledge, let’s talk about the taste preference. We have people who are used to drinking Tak Kie’s coffee (a legendary coffee shop in Glodok, established in 1927), and we have people who love Kopi Tubruk, some people just returned from America, Australia along with the coffee habit, then what kind of coffee should I make?

You’re trying to make a middle ground?

That’s the goal, because we don’t know yet where will we go. It would be interesting if we find out that Indonesian people prefer robusta in the end. My point is, anything we choose in the industry, don’t ignore the stories behind it, never talk about right or wrong in this context.

For example, we always say Indonesian coffee is great. Which origin? Have you compare it to bean from Kenya or Colombia? It would be unfair if we, as Indonesians, are the one who say our coffee is great, isn’t it? And then, what is Indonesian coffee? Do we include the traditional charcoal coffee or ginger coffee in the category? Or is it cappuccino or V60 that are using Indonesian bean, even though the brewing method came from Italy and Japan?

In one of Whatsapp group, someone said that if we want to be known worldwide, we have to focus on one single origin and promote it together. Why only one? The best thing about Indonesian coffee is its diversity. African bean such as Ethiopia and Kenya have similar characteristic, meanwhile our coffee from Aceh, Toraja and Bali have their own distinctive notes. I believe we should firstly increase the local consumption, and then we fix the appreciation.

How did you discover the recipe of Es Kopi Susu Tetangga?

Our taste preference is very clear: MSG, fried foods, chilly, don’t expect us to be like sommelier who can discover exotic notes, that’s how I see it. Just give them something intense, ignore the notes, it’s for the next phase. I made the recipe after I built Tuku, based on customers’ requests. When they had the hot version, they
want it to be iced, when I added ice, the texture became watery, thus, I put some cream. I also modified the sugar and the extraction method.

And the origin of the bean?

Whatever. I have my own specification on Kopi Tuku’s taste profile, I can use the bean from Aceh, Garut, Lintong, or anything as long the taste meet my specification. But I use 100% Arabica and the roast profile is medium dark with dark chocolate notes, caramel, and low acidity, because that’s what the customers want. The quality doesn’t have to be specialty, because in the end, I put some sugar, I also need to keep the selling price low. 

Suddenly everyone copies your concept and sell iced coffee milk, does it upset you?

Honestly, that’s what I aimed for because my stimulus to influence people actually works. Businesswise, I need the product to be a category in its own. In order to
achieve it, I need competitors. In the beginning of iced coffee milk boom, actually I was involved to build similar coffee shops that sell iced coffee milk.

Some people open coffee shop just for fun, but they finally realized the cost was quite big. Or we have another people who purely want to do business, but they miscalculate, they think by selling lower priced product, they will automatically get market share. I think, this business doesn’t really need big market share, we only need some certain market in 5km radius, or even 2 km.

Coffee is not rocket science, I don’t think Es Kopi Susu Tetangga is a great recipe, people can easily copy it. If people asked why I expose the recipe, eventually people will copy it anyway, it’s better if I just give it away, people will see me as a generous person lol! Feel free to copy the recipe, I’m not sure you’ll get the
same result, because we have different extraction method, or different sugar mixture. I always remind people of our tagline “different neighbor results in
different coffee taste”.

And the last one, don’t talk right or wrong, don’t say instant coffee is bad, or Starbucks sucks. Actually I really love Starbucks, we can ask the barista to make any coffee we want, the taste and the service are always consistent.

The problem is, even though they imitate the concept, they can get the same sales volume as you.

Yes, not everybody understands it. People started small, but in business, you have the sustainability concept. People often ask, “do you make any profit by selling Rp 18.000 coffee?” Businesswise, the choice is always between margin and volume. I think coffee should play by the volume, because the upstream is already all
about volume.

If you insist on specialty, how many coffee farmers can produce natural process coffee in proper way? Specialty means limited. Of course we all want to raise the consumption, but don’t force the specialty concept. I’d say that the specialty’s business model doesn’t make sense, I mean, how much does a cup of specialty coffee cost? If you are to make manual brew coffee (a cup takes more than 5 minutes to prepare), how long the queue will be? In the end, we sacrifice quality. I don’t want coffee to end up like batik, we always boast how we love it, protect it from another country claim, but we don’t wear it everyday.

And we wear the printed ones.

Exactly. So, just let the customers drink their coffee, and then we have more coffee shops and it will be perfect competition market. From there, strategically we’ll deal with cost leadership, price war, and then there will be battle of creativity through differentiation.

Please tell us a bit about President Jokowi’s visit to Kopi Tuku.

On the day before, in the middle of the night I got a phone call and I was told that President Jokowi will visit, and I wasn’t allowed to tell anybody. When I ask him why did he come, Jokowi said that he was curious of the local trending coffee brand that his children told him about. At first, I thought it was regular visit, now I assume Jokowi want to give exposure to local coffee brand. In his speech on Bogor Palace at Coffee Day (October 1st 2017), he encouraged Tuku to
grow fast, up to 1000 outlets at once.

Some people call Tuku’s iced coffee milk trend as 4th wave, do you agree?

I wouldn’t dare to say that, because in other countries, 4th wave is even crazier than specialty, it’s more segmented and apply lot of science. We haven’t got clear definition of 4th wave, some assume that by changing the water used to brew we can call it as 4th wave. If Indonesian’s 4th wave is merely about iced coffee milk, I’m afraid it will offend many people.