Indonesia Instant Coffee Market Size, Share, Opportunities, And Trends By Type (Freeze-Dried Instant Coffee, Spray-Dried Instant Coffee, Others), By Distribution Channel (Offline (Foodservice, Retail (Supermarket/Hypermarket, Convenience Stores, Others)), Online), And By Province - Forecasts From 2025 To 2030

Indonesia Instant Coffee Market Size:

The Indonesian instant coffee market is predicted to expand at a CAGR of 8.48% to account for US$5,734.186 billion by 2030 from US$3,817.279 billion in 2025.

Increasing domestic consumption, coupled with rising per capita disposable income, is snowballing the market for instant coffee in the region. In accordance with the International Coffee Organization, Indonesia's domestic coffee consumption comes second to Brazil. Domestic coffee consumption in Indonesia was 4,750 thousand 60 Kg bags in the 2018 fiscal year and increased to 5,000 thousand 60 Kg bags in 2021. On the other hand, Indonesia is a dominant supplier of coffee internationally, providing different types of instant coffee. According to the Foreign Agricultural Services, U.S. Department of Agriculture (USDA), Indonesia is expected to produce 11.35 million (60 kilograms) bags more coffee in 2022–2023 than the previous year. Further, it is anticipated that increased demand as a result of the relaxation of pandemic-related limitations will push domestic coffee consumption to 4.8 million bags.

Indonesia Instant Coffee Market Growth Drivers:

• Growing domestic coffee consumption

Coffee is an important cash crop for Indonesia. According to Enveritas, worldwide, there are about 12.5 million coffee farms, out of which 1.3 million are in Indonesia. Due to the vast availability of raw materials and resources, the demand for Indonesian instant coffee is high domestically and internationally.  According to the International Coffee Organization, Indonesia comes second only after Brazil in domestic consumption of coffee. In the financial year 2018, Indonesia’s domestic consumption of coffee was 4,750 thousand 60 Kg bags, and reached 5,000 thousand 60 Kg bags in 2021. Further, according to the USDA, Indonesia's domestic coffee consumption reported in June 2021 was 144% higher than that of Australia, 28% higher than that of the United Kingdom, and only 6% lower than that of Canada.  Australia, the United Kingdom, and Canada are a few nations associated with high per-capita consumption of coffee.

Due to high consumption and growing per capita disposable income, more and more companies are showing interest in the instant coffee market. Several new coffee chains are entering the market in Indonesia.  In addition, already existing coffee chains are receiving high investments.  For instance, In January 2022, Indonesia’s premium coffee chain start-up Kopi Kenangan attained a US$1 billion valuation after attaining new investments. The company secured US$96 million in Series C funding from investors Horizons Ventures, Kunlun, B Capital, and Falcon Edge Capital

• The freeze-dried segment is expected to grow substantially

The growing consumption trend of instant coffee, coupled with the sales of soluble coffee in Indonesia, is projected to propel the market growth of freeze-dried instant coffee in the country during the forecast period. Also, the higher realization of freeze-dried coffee, coupled with better flavor than other types, is expected to promote the growth of the segment. Further, the growing coffee consumption in Indonesia, as well as the majority share in green coffee bean production used widely for instant coffee development, is also projected to enhance the profitability of the market.

According to the 2021 The Coffee Guide Report by International Trade Centre, Indonesia was among the top 10 producers of Arabica and Robusta coffee beans, with a production of 2,020,000 bags of Arabica beans, scoring the global 9th spot, and 7,598,000 bags of Robusta beans with 3rd rank globally. Also, according to the source, consumption of soluble coffee, mostly in 3-in-1 packages, has begun in Indonesia. The major coffee crop production, coupled with emerging soluble coffee consumption, is expected to drive the demand for instant coffee, such as freeze-dried coffee, in the country.

Also, as per the source, freeze drying method of developing instant or soluble coffee helps in the better conservation of flavor and yields a better quality. Further, a higher realization of 60% to 70% is achieved for freeze-dried instant coffee as compared to the spray-dried alternative. Better flavor, quality, and higher realization of freeze-dried instant coffee are anticipated to drive the demand and market potential for the same in Indonesia as well during the projected timeline.

In another instance, according to the November 2021 journal of the Muhammadiyah University of Jakarta, the national coffee consumption grew by 10.54% in 2017, reaching 276,000 tons from 250,000 tons in 2016.

Indonesia Instant Coffee Market Geographical Outlook:

• The Java Province is expected to hold a significant share of the Indonesia instant coffee market.

With an average annual rainfall of 2,000 to 2,500 mm and 120 to 150 rainy days, the climate in Java is comparatively dry. Smallholders produce more than 95% of the world's coffee, with coffee estates, most of which are found in the provinces of East Java and Central Java, according to industry statistics. The consumption of coffee has changed in Indonesian cities because of rising standards of living and changing lifestyles, particularly among young people. According to the 2020 Population Census, around 270.2 million people were living in Indonesia, an increase of 14% from the 237.6 million people in 2010. According to the Central Bureau of Statistics, around 56.1%, or 151.59 million people, lived on Java Island; the largest population centers were West Java (48.27 million), East Java (40.67 million), and Central Java (36.52 million) as of 2020. The younger generation typically favors three-in-one coffee, espresso-based drinks, and instant coffee. Hence, the increasing younger population, coupled with rising travel, commuting, social gatherings, and outdoor events, is expected to propel the market growth.

In addition, the province hosts some of the largest producers of processed coffees catering to domestic and foreign markets, including instant coffee. For instance, PT. Santos Jaya Abadi, one of the largest companies in Southeast Asia, was founded in 1979. According to the study "The Indonesian Coffee Consumers Perception on Coffee Quality and the Effect on Consumption Behavior," Good Day was listed as the most popular instant coffee by the general public, whereas Kapal Api was preferred by the more seasoned group. The two top brands, Kapal Api and Good Day, are both made by PT Santos Jaya Abadi, a leader in the instant coffee industry in Indonesia.

Moreover, several ready-to-drink (RTD) coffee manufacturers launched new product lines in 2021 that were more reasonably priced and came in smaller packets for consumers whose spending power had been lowered as a result of social limitations brought on by the epidemic, according to the Coffee Annual published by the USDA in 2022. RTD coffee sales, which will make up 19% of all off-trade sales in 2021, are backed by a substantial distribution network of convenience outlets situated in transportation hubs and public places, according to USDA.

Moreover, investments to strengthen the distribution channels will propel the provincial market. For instance, PT Nestlé Indonesia entered a contract with PT Decorient Partaya Indonesia for the construction of its new facility in Batang, Central Java, Indonesia, in August 2021. The factory will be among the first industrial structures to be constructed at the brand-new Batang Industrial Park in Central Java. As one of the top coffee manufacturers has established a new plant in Central Java in anticipation of rising demand for bottled coffee drinks, Java’s capacity is anticipated to increase.

Indonesia Instant Coffee Market Scope:

The Indonesia instant coffee market is segmented and analyzed as below:

• By Type
  • Freeze-Dried Instant Coffee
  • Spray-Dried Instant Coffee
  • Others
• By Distribution Channel
  • Offline
    • Foodservices
    • Retail
      • Supermarket/Hypermarket
      • Convenience Stores
      • Others
  • Online
• By Province
  • Jakarta
  • Bali
  • Java
  • Others

1. INTRODUCTION

1.1. Market Overview

1.2. Market Definition

1.3. Scope of the Study

1.4. Market Segmentation

1.5. Currency

1.6. Assumptions

1.7. Base and Forecast Years Timeline

1.8. Key benefits for the stakeholders

2. RESEARCH METHODOLOGY

2.1. Research Design

2.2. Research Process

3. EXECUTIVE SUMMARY

3.1. Key Findings

4. MARKET DYNAMICS

4.1. Market Drivers

4.2. Market Restraints

4.3. Porter’s Five Forces Analysis

4.3.1. Bargaining Power of Suppliers

4.3.2. Bargaining Power of Buyers

4.3.3. Threat of New Entrants

4.3.4. Threat of Substitutes

4.3.5. Competitive Rivalry in the Industry

4.4. Industry Value Chain Analysis

4.5. Analyst View

5. INDONESIA INSTANT COFFEE MARKET BY  TYPE

5.1. Introduction

5.2. Freeze-Dried Instant Coffee

5.3. Spray-Dried Instant Coffee

5.4. Others

6. INDONESIA INSTANT COFFEE MARKET BY DISTRIBUTION CHANNEL

6.1. Introduction

6.2. Offline

6.2.1. Foodservices

6.2.2. Retail

6.2.2.1. Supermarket/Hypermarket

6.2.2.2. Convenience Stores

6.2.2.3. Others

6.3. Online

7. INDONESIA INSTANT COFFEE MARKET BY PROVINCE

7.1. Introduction

7.2. Jakarta

7.3. Bali

7.4. Java

7.5. Others

8. COMPETITIVE ENVIRONMENT AND ANALYSIS

8.1. Major Players and Strategy Analysis

8.2. Market Share Analysis

8.3. Mergers, Acquisitions, Agreements, and Collaborations

8.4. Competitive Dashboard

9. COMPANY PROFILES

9.1. Nestlé

9.2. Boncafe Indonesia

9.3. Mayora Group

9.4. Starbucks Coffee Company

9.5. PT. Aroma KopiKrim Indonesia

Nestlé

Boncafe Indonesia

Mayora Group

Starbucks Coffee Company

PT. Aroma KopiKrim Indonesia