Marketing

Indonesia’s JJ Royal gourmet coffee company caters for domestic demand

For a country that exports some of the world’s most sought-after origins, tourists to Indonesia may have noticed a lack of quality coffee available on the groun

d. Although the expression “a cup of java” comes from the South-east Asian nation’s Java region, in recent history much of the country’s best coffee seemed more available internationally than it was for Indonesians themselves.

At least that was what JJ Royal Coffee noticed in 2003, when they observed that tourists were actively seeking out Toraja coffee, but couldn’t find any of this premium quality product in the country. A little research showed that origins such as Toraja were popular overseas, but coffees of similar quality weren’t being sold within Indonesia’s borders. So, the company set about making premium Grade 1 single origin available to the domestic market. 

The more the company researched the country’s coffee, the more it realised just how highly priced Indonesian origins were overseas. On a trip to the French Riviera’s prestigious location, Cannes, one JJ Royal Coffee staff member noticed in a café that Grade 1 Mandheling coffee was the second most expensive on the menu. But, it was virtually unheard of and certainly inaccessible, in Indonesia.

“We thought it was really sad that Indonesians were not trying the best quality of their own coffee,” says Clarissa Halim, Advertising and Product Development Manager for JJ Royal Coffee. “What was available within the country was very limited… We saw a market there.”

JJ Royal Coffee released Toraja as their first direct-to-retail gourmet coffee. It was not cheap. Halim says that a 200 gram bag of coffee costs about half a day’s salary for the average middle class Indonesian worker. This was one of the first times such high quality Grade 1 Indonesian specialty coffee was available for purchase in Indonesia’s retail stores. Retailers were highly sceptical. In fact, many supermarkets didn’t want to stock the coffee, saying no one would buy it.

“But, we proved them wrong,” asserts Halim, noting that they easily sold enough to make sizeable sales. Deciding to release another coffee, however, was a difficult call. Halim explains that they were afraid they would cannibalise their market – putting the effort into another origin just to take sales away from their first release.

Their additional releases, however, produced unexpected outcomes. As they released each new variance, their sales increased. They released five other new origins of coffees and their sales actually increase five-fold. These days, those supermarkets that didn’t want to stock the coffee are selling around 700 units of JJ Royal Coffee a month.

From this encouraging start, JJ Royal Coffee moved on to actively seek out the best from every region. Their efforts to increase the availability of Grade 1 Indonesian specialty coffee within the domestic market, however, were met with some problems. The popularity of Indonesia’s coffee overseas meant that most of it was reserved for export and domestic customers were pushed to pay premium prices for their own coffee. And, even after paying top prices, they were receiving sub-quality beans and had to re-sort them. 

Then, an unexpected avenue turned up a solution. Traditional advertising mediums, such as display advertising in newspapers and magazines, were a key component in generating public awareness and promoting sales. As the first company to promote Grade 1 Indonesian specialty coffees, they were regularly posting half and full page advertisements in newspapers and luxury and fashion magazines. 

From these advertising efforts, not only did they generate brand awareness, but they started receiving phone calls from the farmers whose beans they were selling. “They looked in the newspapers and called us to say, ‘Hey, those are our beans!’” says Halim.

From these inquiries, they were able to establish direct trading relationships with the farms. This not only lowered their costs, but helped improve the quality of the coffee they were receiving, because they could give direct instructions to the farmers on how to process their crops.

To this day, display advertisements continue to serve as a major part of JJ Royal Coffee’s marketing efforts, as the “above the line” approach in the company’s two-pronged strategy. The second, “below the line” approach is all about educating customers, Halim explains. In every retail outlet, they have coffee machines where customers can try the coffee prior to purchasing. They also employ sales staff who work on-site, educating customers about the taste of coffee.

Halim proudly boasts that their sales staff can now identify all the origins from taste, although she notes this was a challenging process. With limited access to Grade 1 Indonesian specialty coffee, Indonesians naturally had limited knowledge of it. The work of training their staff from scratch has been a vital part of educating their customers, as the staff work on-site to pass their newfound knowledge onto the consumer.

“We want to make sure customers are educated,” explains Halim. “Grade 1 Indonesian specialty coffee is not part of the Indonesian culture, it’s not part of our identity. Most Indonesians really only know that coffee is something you drink with lots of sugar.”

Their efforts in educating Indonesian consumers haven’t gone unrewarded, as the sales records clearly show. Competitors are starting to pop up, seeking out their market share. As an indication, however, of the potential of this market, Halim says that with every new competitor, their sales actually increase, as every new company helps raise the profile of their product.

Today, JJ Royal Coffee is Indonesia’s largest provider of Grade 1 Indonesian specialty coffee. In their direct relationships with farmers, they’ve been able to source some rather original origins. For instance, their Java Monk blend comes from a monastery in central Java and is collected by a group of monks. The monks have taken a vow of silence and use agriculture to sustain themselves. Halim laughs as she recalls the challenges in communications this relationship has raised. Luckily an administration staff helps them communicate with the monks.

For their newest Papua origin, they need to take a six-hour journey from Jayapura to one of the most undeveloped parts of Indonesia, inhabited primarily by tribespeople. They caught wind of this coffee from a group of missionaries who regularly visit the mountain. The coffee is picked and sorted by hand. With JJ Royal Coffee’s help they are processing and sorting according to the international grade 1 Indonesian specialty coffee standard.

“I think it’s stories like these that make JJ Royal Coffee unique,” says Halim. “There’s all these hidden treasures of Indonesia, and we want to make them available for everyone.”

Advertising fact
Display advertising has been a key component of JJ Royal Coffee’s marketing strategy, with regular advertisements in Indonesia’s daily newspapers and glamour magazines.

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