East Ventures’ coffee-tech startups support the end-to-end sustainable coffee ecosystem
Who doesn’t love coffee? At East Ventures, we are deeply in love with coffee. Our portfolio has three coffee-focused tech startups: Otten Coffee, Fore Coffee, and Morning.
Coffee has become a special routine for many people – get a cup of coffee in the morning, stop by a coffee shop, or spend some time in a coffee shop during the day.
Coffee is the most widely traded tropical product, with up to 25 million farming households globally accounting for 80% of world output. The consumption is also rising yearly. According to the International Coffee Organization, world coffee consumption is projected to grow by 3.3% to 170.3 million bags in 2021/2022 from 164.9 million in 2020/2021.
In Southeast Asia, coffee has become an essential commodity worth US$ 6.2 billion, or 16% of coffee exports. Vietnam and Indonesia are the second and fourth world’s top coffee producers. In Indonesia, coffee is the third most important commodity in plantations after palm oil and rubber. It contributes 16.15% to plantation GDP, and the industry absorbs about 1.86 million heads of farming families and 50 thousand general workers.
Located at The Coffee Belt, a band around the equator best suited for growing coffee, Indonesia has the widest variety of single-origin coffee and the largest selection of tastes and characters. The country has experienced significant growth of 250% in the coffee industry in the last ten years.
In celebration of the International Coffee Day on 1 October 2022, East Ventures would like to share how coffee tech startups contribute to increasing the value of coffee beans, selling coffee to drink, and practicing a sustainable coffee ecosystem from the upstream to the downstream market. Here are our coffee-tech startups that have developed the region’s coffee ecosystem, from farmers to coffee drinkers.
Happy World’s Coffee day!
Morning Coffee Machine
Morning is the most recent coffee startup that East Ventures invested in in 2022. Co-Founder and CEO of Morning, Leon Foo, said that Morning helps to solve three coffee ecosystem problems.
First, Morning helps to bring coffee quality and convenience at the same time with its coffee machine so that people with limited understanding of brewing a decent cup of coffee can still have it in their homes. Second, Morning creates a marketplace platform where people can buy the world’s best coffee instead of spending time buying from many sites. Third, Morning shares roasters and coffee stories worldwide through its platform so coffee lovers and roasters can learn and share stories.
“Our patented technology makes the coffee taste better. The way our machine works – the pump, temperature, and the output are slightly different, the coffee tastes better, and it’s all with one touch of a button,” Leon Foo said.
Morning does not compromise on getting good quality beans from sustainable farming practices worldwide. Sustainable farming practices mean ensuring from the end-to-end coffee plantation process is not harming the environment, including making sure the minimum wage and the green coffee price are at a certain level. Around 15-20 roasters worldwide help Morning to roast and mix coffee from countries, helping them to maintain the quality. Leon targets to have 60 roasters gradually, so Morning can bring better quality coffee taste to customers.
Another sustainable practice is also reflected in its recycling capsule package. Not only to maintain the coffee quality in its packaging, Morning only uses capsule materials made of aluminum or other compostable materials rather than using plastic.
“Our future goal is to make better coffee more accessible and ensure the use of sustainable packaging and sustainable practices in wastage, composting, recycling, and all processes. We want to make a difference from the platform standpoint through sharing stories with some of these farmers, have contents that feature the community, and bring public awareness to the farm side,” Leon added.
East Ventures has invested in Fore Coffee since it was founded in 2018. The name ‘Fore’ was derived from ‘forest’, meaning Fore Coffee aims to bring life and goodness to its surroundings.
Using Indonesian coffee beans from Aceh, Toraja, and West Java, Fore Coffee prioritizes coffee quality for its customers. Bringing the theme “Grind The Essentials” this year, Fore Coffee wants to focus on processing quality coffee from the farmers to the customers. It is essential because, as the fourth world’s largest coffee producer, Indonesia is ranked 45th in coffee consumption. In addition to using Indonesian coffee beans, Fore connects directly with the farmers to understand the challenges they face and how the company can support them.
Although Fore Coffee may not be the originator of popular menus like the palm sugar latte, Fore Coffee brings something different in every cup to Indonesian customers. “We are not just giving you coffee; we are also giving you experience. We believe that coffee is linked to social life, as every human needs to interact and socialize with others. Thus, we create the social life in Fore Coffee, where you can enjoy your coffee with your friends, colleagues, and relatives,” Vico Lomar, Co-Founder and CEO of Fore Coffee, said.
As Fore Coffee continues to gain customers’ trust with the best products, the company has seen significant growth in the past year, from 300-400 thousand cups per month in 2021 to an estimated one million cups per month in 2022. The store also grew 30% this year, with 120 stores in 26 cities across Indonesia this September. It targets to have 140 stores by the end of this year.
Fore Coffee utilizes technology to educate the market, increasing orders from the app by offering promotions, and remarkably, the technology adoption in the second and third-tier cities is relatively high. Through its application, Fore Coffee hopes to get a better understanding of customer behavior in order to personalize customer experience moving forward.
Regarding sustainability packaging, Fore Coffee also heeds its waste output by reducing the waste through reusable glasses (for cold drinks) and the world’s most biodegradable paper cup (for hot drinks). This year, Fore also collaborates with one of Indonesia’s waste management startups to collect paper and plastic cups so they can recycle them in greater Jakarta.
“We believe in our original philosophy. Fore comes from the word ‘forest’, so our responsibility is to protect and care for the environment. This has been our promise since the beginning,” Vico added.
Founded in 2014 by Jhoni Kusno and Robin Boe, Otten Coffee is Indonesia’s coffee tech transforming coffee drinking culture in Indonesia with its profound vision #MengopikanIndonesia (In English: encourage Indonesian people to drink good quality coffee). Soon after, in 2015, East Ventures came into the fold and has since supported Otten’s journey. Jhoni and Robin saw that coffee consumption has gradually increased as people gain more awareness of what they consume. Therefore, Otten is making the most of this opportunity by providing a wide range of Indonesian coffee from Sumatra to Papua. Otten sources its coffee beans from 100 regions and counting, as it constantly explores more potential regions with different coffee tastes.
“We bring the coffee knowledge for coffee drinkers, both at home and outside. We also educate different kinds of business models for coffee business owner and people who want to be good baristas by serving a good cup for all coffee lovers,” said Jhoni Kusno, Co-Founder and CEO of Otten Coffee.
Otten works closely and establishes a good relationship with farmers in Indonesia. It has a Research and Development (R&D) team that works with coffee farmers, ensuring they practice responsible growing methods that sustain the environment and surroundings while still supplying quality coffee.
He explained that Otten utilizes technology in the end-to-end coffee process. From production to ensuring the customers’ needs and supporting a fair-trade coffee ecosystem, developing a system for demand forecasting, inventory management, and production planning, Otten leverages technology to optimize every step of the process, eventually leading to revenue growth. In getting closer to the community, the firm has established several initiatives, such as hosting coffee events, creating a coffee workshop, and holding one of the most prestigious coffee competitions in the global coffee community.
“We aim to connect stakeholders in Indonesia’s coffee industry by being vertically integrated, making specialty coffee accessible through technology and digital ecosystem to address community problems and bring competitiveness to the world,” Jhoni said.