When Howard Schultz envisioned Starbucks as the ‘third place’ — he knew he was selling more than just coffee. I am sitting at the local Starbucks as I write this — never even having been a coffee drinker all my life. Nor am I a fan of extraordinarily average croissants. Nor am I a fan of overly priced tea. So why did I choose to write here? Schultz got me — Starbucks does feel like a warm and welcoming space that I can reliably go to beyond my home and place of occupation. It is indeed — a third place.
Approximately 9,000 miles from Seattle (the birthplace of Starbucks), in the bustling city of Jakarta, Indonesia — lives Edward Tirtanata. The Howard Schultz of Indonesia has taken a local coffee stall in 2017 and brewed the business into Unicorn status (a valuation of USD 1 billion) by the end of 2021. Today Kopi Kenangan is backed by the likes of Serena Williams, Jay-Z, Sequoia Capital, and Facebook’s Eduardo Saverin — with over 860 outlets across Southeast Asia, and reportedly roasting up USD106 million worth of coffee in 2023.
Filosofi Kopi
The biggest similarity between Schultz and Tirtanata is that they both are selling cups of coffee like there’s no tomorrow. The next biggest similarity between the two is that they are not really selling coffee at all — not really. While Schultz is offering the hospitality and reliability of the ‘third place’ — Tirtanata’s business rests on a different yet equally powerful sentiment: Nostalgia.
With melancholic product names such as Kenangan Mantan (memories of your ex), Kenangan Masa Lalu (memories of the old days) and Lupakan Dia (let them go), Tirtanata has successfully infused an inherently bitter product with a sweet sense of nostalgia for the youths of Indonesia.
“The key to branding is to be different, and nobody was using Indonesian names for their coffee” — said Tirtanata in a recent CNBC interview. “I asked my business partner what his most memorable memory was, and he said it was of his ex-girlfriend.” And thus was the beginning of the story of a good cup of coffee attached to a fun nostalgic branding that has gone viral ever since.
Despite employing such a melancholic branding strategy, Tirtanata is in fact a disciplined and calculated businessman. He comes from a family of entrepreneurs and undertook his studies in accounting and finance at Northeastern University in the United States. Having tried multiple business endeavors — from trading Pokemon cards as a child, to selling clothes online, to opening a tea chain — he eventually found a sweet spot in the Indonesian market for coffee.
In realizing that Starbucks was simply much too expensive for the larger Indonesian market, Kopi Kenangan was set up to be a more affordable alternative that focuses on a ‘grab and go’ concept rather than a ‘stay for hours’ concept adopted by Howard Schultz. With this strategy he was able to forego heavy capital expenditure such as comfortable furniture, top of the line air conditioning and high-speed Wi-fi in order to pass all such savings on to his nostalgic and young consumer base.
In the business of selling coffee to the young markets of Southeast Asia that are increasingly reliant upon technology, Tirtanata possesses very little expertise in both worlds. “I do not code, and I do not make coffee” — he said in a 2020 interview. What he is apparently so good at is choosing and allocating human and financial capital in just the right manner, just the right blend, so as to create monumental value for his customers and shareholders.
Full Steam Ahead
Tirtanata’s end game is for Kopi Kenangan to be the next Starbucks — aiming at an ambitious goal of reaching 30,000 outlets all across the globe. He wishes for Indonesia to be an exporter of brands (in his case, a coffee brand) rather than merely an exporter of raw natural resources. Instead of exporting coffee beans, he is currently exporting what is arguably be Indonesia’s most exciting coffee brand.
“We are in the business of likes, the business of feelings” — said Tirtanata. He has built a formidable foothold in Indonesia and is starting to create a presence in the wider Southeast Asian coffee market. Let us see if the rest of the world are just as nostalgic about their exes as we are.
This thing is in every corner. Definitely the Starbucks of Indonesia.