- Indonesia’s coffee consumption has tripled since before the pandemic, making it the world’s fifth-largest coffee consumer
- A boom in RTD, mobile takeaway orders and “grab-to-go” kiosks has pushed demand
- As Indonesia becomes both a major producer and drinker, it offers a blueprint for other origins driving domestic consumption
Indonesia has long been known as one of the world’s great coffee origins. Increasingly, it is becoming one of its largest consumers.
Domestic consumption has reportedly risen from 4.45 million bags in the 2020/2021 period to 4.8 million bags by the end of 2025. If one bag of coffee is equivalent to 60 kg of coffee, then the total coffee consumption this year is approximately 288 thousand tonnes of coffee.
That makes Indonesia the world’s fifth-largest coffee consumer behind the EU, US, Brazil and Japan, and, at current growth rates (around 5% a year), Asia’s fastest-rising coffee market. At this pace, it is on track to overtake Japan as the region’s biggest consumer.
“Indonesia has actually had a coffee-drinking culture for hundreds of years,” says Willy Sidewalk, author of Barista #NoCingCong and founder of Ngopi #NoCingCong Podcast. “However, in the past, coffee was mostly consumed by older generations. Culturally, coffee was strongly associated with ‘an old people’s drink,’ and many parents used to prohibit their children from drinking it.”
The most significant shift began with the arrival of the second wave of coffee, marked by the expansion of modern coffee chains like Starbucks. This was followed by the rise of specialty coffee shops in the 2010s, which significantly broadened the market. Coffee became a youth-facing product.
“This trend remained limited to the middle and upper classes, as enjoying high-quality coffee in modern cafés still required paying a relatively premium price,” says Willy. “The real turning point came about one to two years before COVID-19, with the boom of the es kopi susu trend, popularised for the first time by Toko Kopi Tuku – a business that actually originated from the specialty coffee scene.”
“They successfully introduced ‘Es Kopi Susu Tetangga,’ a blend of ice, espresso, milk, and palm sugar sold at an affordable price (only IDR 18,000). This menu became massive and was quickly copied by countless new coffee shops across Indonesia. As a result, domestic demand for robusta surged dramatically.”
The recent acceleration is not just about more coffee, but new formats. A Deloitte study describes a “significant surge” in local coffee businesses since the late 2010s, fuelled by convenience: ready-to-drink bottles and “grab-to-go” kiosks clustered around malls, transit hubs and office towers.
The pandemic supercharged these habits. One academic study notes that takeaway and online coffee sales in Indonesia rose more than 5% as consumers embraced delivery apps; average orders jumped from one cup to three per transaction. Deloitte reports that Indonesia’s coffee consumption has now tripled compared with pre-pandemic levels.
“A new wave of home-based entrepreneurs emerged, successfully selling bottled es kopi susu online, which helped them survive the crisis,” says Willy.
Meanwhile, chains such as Kopi Kenangan and Janji Jiwa built dense networks of small outlets, selling sweetened iced coffee in plastic cups at prices that sit comfortably between street stalls and international brands. Co-working cafés, Instagram-friendly interiors and “coffee-to-go” concepts, with minimal seating and maximum throughput, have spread from Jakarta to secondary cities such as Batam and Surabaya.
“After the pandemic, as daily life resumed, Indonesia’s café count kept rising – and it still hasn’t slowed,” says Willy. “The consumer base has expanded dramatically, with Gen Z treating coffee drinking and café-hopping as part of their identity and everyday lifestyle.”
“This momentum is unlikely to fade. Social media accelerates trends at remarkable speed, allowing new coffee shops to go viral overnight through creative gimmicks – especially among Gen Z. For that reason, it’s reasonable to expect that Gen Z will soon become the dominant force in Indonesia’s coffee market.”
Rising incomes and a growing middle class have helped boost demand as well. As Indonesia’s economy expanded at roughly 5% in 2024, coffee has become an everyday indulgence rather than a rare luxury. Domestic drinkers are also trading up: robusta still dominates, but according to the USDA arabica imports for high-end segments – mainly from Brazil – more than doubled in 2023/24, while imports of Vietnamese robusta tripled as local roasters sought consistent supply at scale.
StoneX warns of a slight slowing down in growth though: Indonesia’s coffee consumption is expected to reach 4.8 million bags in 2024/25 – only a slight increase from the previous year, held back by weak consumer purchasing power. A country once seen chiefly as a coffee source has nevertheless rapidly become a formidable source of demand.
A dual-market giant
Indonesia exports just over half of its coffee – mostly robusta – and the crop remains one of the country’s most valuable agricultural earners, supporting an estimated 1.77 million people and generating more than $1.5 billion in export revenue. Yet coffee still sits behind palm oil and cereals in both economic weight and public investment, receiving far less attention in research and development despite its cultural and social significance.
Yet over the years, and despite a more sluggish current demand, the domestic market has gradually grown into something comparable in scale.
Historical data show how striking the shift has been. Domestic consumption hovered at around 3m bags in 2015; by 2019/20 it had reached nearly 4.9m – a near doubling in less than 5 years, even before the recent “fourth wave” of RTD and app-driven takeaway. Consumption has held more or less steady since, even throughout the pandemic.
The latest government-backed forecasts expect consumption to fall slightly, but the government still sees opportunity and plans to invest in domestic processing to boost value capture and consumption.
“As Indonesia’s coffee market expanded rapidly, the growth also cascaded into related sectors,” says Willy. “The surge in new coffee shops and rising demand for roasted beans created opportunities for new roasters. Around 2008, when I first entered the specialty coffee industry, it was extremely difficult – especially outside major cities – to find fresh roasted beans, because there simply weren’t many specialty roasters. Today, even in small towns across distant islands, you can typically find at least one or two micro-roasteries.”
“The increase in the number of roasters has generally been welcomed by coffee farmers. Many roasters began buying directly from farmers, and some even volunteered their time to train farmers on improving coffee processing and grading, so they could earn better prices.”
Indonesia has turned into something of a hybrid: both major producer and weighty consumer, in the mould of Brazil and Ethiopia. Brazil, the world’s largest exporter, now drinks 21.9 m bags of coffee domestically – some 13% of global consumption. Ethiopia, the birthplace of arabica, consumes roughly half its own output domestically.
Indonesia is not yet quite in that league, but the direction of travel is clear.
Domestic production still overwhelmingly comes from smallholders working less than one hectare, with declining access to improved genetic material, and fragmented extension services. Nearly 70% of Indonesia’s coffee farmland now requires renovation or rehabilitation, as much of it is planted with aging trees and older, less productive varieties.
That keeps yields low by regional standards, but it also means the gains from a stronger internal market can ripple widely through rural economies when prices are favourable.
“Several challenges have emerged,” says Willy. “Many farmers still prefer exporting their coffee – either due to existing contracts or simply because overseas buyers offer ‘more guaranteed’ payments. As a result, domestic supply has tightened.”
“With Indonesian coffee becoming more expensive locally, many roasters began sourcing commodity-grade beans from countries like Brazil. Importers naturally capitalised on this demand. This situation has become somewhat ironic: Indonesia is one of the world’s largest coffee producers, yet we now import coffee in significant quantities to meet domestic needs.”
The rise of local consumption is changing the trade mix. Indonesia now imports about 500,000 bags of coffee – mainly Vietnamese robusta for instant and RTD factories, and Brazilian arabica for premium cafés. RTD coffee sales have seen continued growth since 2023, driven by producers rolling out more affordable varieties and expanding distribution through convenience stores, supermarkets, small local shops, and kiosks.
The result is a more complex, but potentially more resilient, coffee economy: one in which farmers, roasters and retailers can sell into both international markets and a large, increasingly sophisticated home audience.
A blueprint for producer-countries?
Indonesia’s coffee habit matters beyond its shores. As the European Union and North America show signs of demand fatigue, industry strategists often argue that producer countries must “drink more of their own coffee” to rebalance power in the value chain.
Indonesia offers a real-world test of that rhetoric.
A recent study notes that Indonesia’s expanding domestic market has seen a decrease in Indonesian coffee exports over recent years – also because of a decrease in production – with an increase in domestic demand at the same time.
“The Specialty Coffee Association of Indonesia (SCAI) is still actively campaigning to increase domestic coffee consumption,” says Willy. “Just about a week ago, SCAI shared new data from the International Coffee Organization (ICO), presented by Cafely, showing that Indonesia – previously consuming only a few hundred grams per capita per year – has finally reached 1.04 kilograms per capita per year (equivalent to 0.27 cups per person per day).”
“SCAI also noted that total national coffee consumption at the time of release reached 288,360,000 kilograms, meaning that roughly 19 million Indonesians depend on coffee for their livelihood.”
In a global market frequently buffeted by climate shocks and price spikes, that extra source of demand – and occasional supply constraint – gives Indonesian stakeholders a little more leverage.
There are lessons for African and Latin American producers hoping to follow suit. First, domestic consumption does not require European-style café culture. In Indonesia, growth has been driven as much by RTD bottles, sweet iced concoctions and cheap takeaway kiosks as by third-wave brew bars. Convenience and affordability mattered at least as much as terroir.
Second, local brands and formats are crucial. International chains such as Starbucks helped set early expectations, but the real volume came from home-grown players who understood local tastes – strong, sweet, often dairy-laden – and price points. Governments that dream of “adding value” by roasting more domestically will struggle unless they nurture these downstream businesses, not just upstream farms.
“Producer countries like Indonesia can learn an important lesson: developing a strong domestic coffee market cannot rely on just a single sector,” says Willy. “The specialty coffee industry alone is far too small to significantly drive consumption growth. Every sector must move – regional coffee communities, farmer organisations, competitions, and especially government support.”
“Government involvement is crucial for improving production, quality, and development across the entire value chain, from upstream to downstream – areas that historically have not received adequate attention. Even when Mikael Jasin won the 2024 World Barista Championship, the recognition from some Indonesian ministries felt more like a brief celebration than a sustained strategic investment. This remains an ongoing challenge for coffee-producing nations like Indonesia, and likely will continue to be a long-term, unfinished task.”
As in most supply chains, much of the profit still accrues to well-capitalised chains, bottlers and importers rather than to smallholder growers. Without attention to credit, extension services and bargaining power, a booming domestic market can coexist with persistent rural poverty.
Even so, Indonesia’s trajectory offers a plausible blueprint. A large, young population; rising incomes; ubiquitous mobile payments; and a willingness to build formats suited to local tastes have created a coffee economy that is both outward-facing and self-sustaining.
Coffee Intelligence
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