Indonesia was the fifth-largest coffee producer and exporter in the world as of 2021, so perhaps it was inevitable that homegrown brands would rise and take the fight to global chains.

Kopi Kenangan and Fore Coffee, two of the country’s leading players, are now expanding outside their home turf. But what awaits them is an increasingly crowded regional scene: Aside from global chains like Starbucks and Tim Hortons, fellow VC-backed startups like Luckin Coffee also arriving at Southeast Asian shores.

How can these two Jakarta-headquartered companies stand out? For James Prananto and Vico Lomar – co-founders of Kopi Kenangan and Fore Coffee, respectively – betting on Indonesian coffee’s unique traits appears to be key.

Singapore as a gateway

Kopi Kenangan has seen exponential growth in recent years. After expanding to 150 stores in Indonesia, it entered Singapore and Malaysia. In doing so, the company has not only introduced Indonesian coffee culture to a broader audience, but it also established the Kenangan brand as an up-and-coming player in the regional – if not global – coffee industry.

“We’re not just bringing your old Americano, your old latte – we actually have a story,” Prananto said on stage at the most recent edition of the Tech in Asia Conference, which was held in October 2023. He highlighted Kopi Kenangan’s use of homegrown beans and palm sugar, which make for a distinctly Indonesian flavor.

Lomar‌, who joined Prananto in this session at the Conference, added that this is also what Fore Coffee wants to bring to markets like Singapore. On its launch day in the city-state, Fore’s three most popular beverages were flavors ranging from local Indonesian blends to something more international: gula aren latte, pandan oat latte, and butterscotch sea salt latte.

Lomar highlighted the city-state and its similarity to Jakarta’s central business district as a gateway of sorts, potentially opening a path for expanding into the Philippines and Malaysia.

Profits before growth

Growth at all costs is no longer a maxim in the tech startup scene, and it’s the same case for both Kopi Kenangan and Fore Coffee. Throughout their conversation at the Conference, Prananto and Lomar also reiterated the importance of staying profitable as a foundation of their model.

Lomar shared that Fore Coffee has been profitable since 2021. “Now we are even bigger and bigger, and the profit is even bigger,” he said. Over the past couple of years, the company has used this positive cash flow to its advantage and opened up more outlets without dipping into the red.

From day one, Kopi Kenangan’s founders had a mindset of building “a good profitable business,” Prananto explained. As they went along their startup journey, they met some VCs – such as PeakXV as well as global celebrities Jay-Z and Serena Williams – who believed in Kopi Kenangan and helped catalyze its rapid expansion.

See also: Clash of the cuppas in SEA as China’s Luckin enters the scene

Another factor that played into both companies’ massive growth over the years is the Covid-19 pandemic. Lomar recounted how people became more tech-savvy amid the social restrictions imposed during this crisis. This helped boost sales for Fore Coffee and Kopi Kenangan, which already count food delivery apps as major transaction drivers.

Prananto also pointed out that while close to 100% of Kopi Kenangan’s business was through deliveries at one point, that number has gone down to around 30%. The desire to go out more after the pandemic and higher delivery app commissions per order are some of the factors driving this shift, he said.