Spray Dried and Agglomerated Coffee
Krishnamurti Sumana
PT Aneka Coffee Industry

PT Aneka Coffee Industry (ACI) was established in 1995 as a joint venture company by PT Prasidha Aneka Niaga Tbk, a subsidiary of Prasidha Group - Indonesia’s largest coffee processor and exporter, Itochu Corporation - Japan’s number one trading house, and UCC Ueshima Coffee Co., Ltd. - a strong player in the retail coffee business.

Originally coffee traders, Aneka went downstream to develop added value products. It now concentrates on instant coffee production (spray dried and agglomerated) at its Surabaya plant.

 Aneka produces concentrated coffee extract primarily for export, for RTD coffee drinks in Japan and Taiwan and also for 3-in-1 coffee beverages produced in Vietnam, Malaysia, Singapore and Taiwan.

"China will be very important one day," said Krishnamurti Sumana, Aneka’s vice president for marketing. "Indirect imports may be a part of the overall picture with regards to China today."

Aneka is well positioned to capitalize on the wealth of experience it has earned. Its extracts have another advantage going for them: the ready availability of quality raw materials.

"Indonesia is one of the world’s largest producers of coffee beans," Sumana reminded us. "It is a good source of raw materials for coffee extracts. Secondly, we are located in Asia, which gives us an advantage over our competitors in Europe and North America because the most potential for growth exists in this sector in the form of what amount to ‘back yard sales’ for us – principally in Malaysia and Taiwan. These are our main competitive advantages."

Regional competition

Clearly, Vietnam is the regional producer most likely to offer serious competition in the long term, a fact not lost on Sumana.

"Vietnam will obviously become more productive in terms of added value coffee products," he admitted, while pointing out that there are some critical differences that have to be mixed into the equation. .

"Indonesian coffee is different compared to Vietnamese coffee," Sumana told us. "Vietnamese robusta has a generally milder flavor, while Indonesian coffee is typically more flavorful and therefore preferred by some markets. Economics is obviously important, but quality and consumer demand and preferences are the most important factors. And while we cannot compare demand in specialty coffee with that for instant, there is still a clear consumer bias towards preferred coffee tastes. In Asia consumer taste has become more sophisticated over a relatively short period of time. There are now so many products in the same price range so in that sense there is a degree of sophistication."

Indonesia is, unsurprisingly, a key market for Aneka, as Sumana readily agreed.

"The domestic market is very attractive for us," he said. "We see more consumption of 3-in-1, coffee is becoming more familiar to consumers in many different forms, and they may not have developed particular preferences at this stage, so somehow there is room for Starbucks and 3-in-1. The younger generation is not very fussy. So there is a wide, diverse market with room for all segments to grow. Supermarket shelves are displaying ever-more diversified coffee products, such as slimming, herbal additives, and so on. This is a unique market, its not snobbish. Consumers are happy to take products from both ends and the middle of the market."

This is not to say that Aneka intends to occupy any particular niche exclusively. The company recently invested in a small arabica coffee plantation, and it has high hopes for the specialty coffee it produces when it introduces it to the market.