Rahmat Budiardjo, CFO, Kenangan Brands
Kopi Kenangan is now a popular brand in Indonesia.
What started in 2017 in Indonesia with a single product is now a unicorn with multiple products, including ready-to-drink (RTD) beverages, sweet bread, cookies, and fried chicken.
The F&B retail unicorn struggled to scale the business during the COVID-19 pandemic and had to shelve its geographic expansion plans. But it made some great moves to navigate the crisis, including opening grab-n-go stores at petrol stations. The company is now present in two more countries, Malaysia and Singapore and is eyeing more markets with US$333 million in its coffers raised from the likes of B Capital Group, Horizons Ventures, Kunlun, and Falcon Edge Capital.
e27 spoke with Rahmat Budiardjo, CFO of Kenangan Brands, to learn how the company’s strategies around packaging helped it manoeuvre the pandemic crisis to make it a strong brand.
Edited excerpts:
How hard was it for Kopi Kenangan to establish the brand? What unique strategy did you adopt to make it a well-recognised brand?
There are mainly two strategies.
I- We utilise cheeky lines and branding themed love, ex-boyfriend/girlfriend and lingering feelings with them. This caught on with the consumers, who found it engaging, interesting, and relatable, enabling us to attract new consumers.
Also Read: Kopi Kenangan joins unicorn club following a US$96M Series C fundraise
II- Excellent product taste, positioning and pricing:
1) we are one of the first movers of coffee milk with gula aren
2) we used the same full-sized coffee machines as Starbucks
3) we use premium brand ingredients, e.g., Greenfields for fresh milk and Monin for syrups (same as Starbucks)
4) affordable pricing: around half of what Starbucks would cost for a similar cup of coffee.
How many products does Kenangan currently have? Does the company plan to add more F&B products in the future?
We have a few brands now at our company:
i. Kopi Kenangan: Our original brand, with mostly a grab-and-go store concept with a smaller store footprint but delivering the highest quality cup of coffee at a very affordable price.
ii. Cerita Roti (bread) & Kenangan Manis (Cookies): delicious selection of ready-to-eat old-fashioned bread with locally inspired flavours and modern soft cookies with modern and internationally inspired tastes.
iii. Chigo x Flip: fried chicken (boneless, wings, and bone-in) served with rice and/or fries topped with sambal; an existing up-and-coming yet famous brand known for selling high-quality burgers that we acquired; later merged with Chigo into Chigo x Flip.
iv. Kopi Kenangan Hanya Untukmu: our latest expansion towards the ready-to-drink market, packaged in PET bottles and sold in modern trade & general trade nationwide in Indonesia.
What roles does the packaging plan play in a product’s wide acceptance? What was the thought process behind the design?
For RTD (Kopi Kenangan Hanya Untukmu), the bottle’s packaging plays a vital role in attracting consumers to look at and eventually buy our product from the shelf. We design our packaging with broken white background to stand out above all other products, mainly dominated by chocolaty colours. We believe that once consumers try our product, they will continue buying it.
As for the Kopi Kenangan brand, our packaging also plays a vital role in continuously building brand equity. Every cup sold contains our brand identity and style, further reinforcing our brand in the consumers’ minds.
Opening grab-n-go outlets at petrol stations during the pandemic was a terrific idea. How well did the new strategy work for the company during lockdowns? Do you continue to sell via petrol stations?
During the pandemic, we focused on opening stores in petrol stations, which resulted in an increase in petrol stores’ composition to 20 per cent of our total store portfolio (vs 6 per cent in 2019). The strategy went well during the pandemic:
i. Store productivity for gas station format was higher compared to pre-pandemic level by around 30-40 per cent,
ii. During the pandemic, petrol stations outlets generated 80-100 per cent higher productivity compared to other formats in malls and offices,
iii. Due to its light CAPEX investment, it generated a much shorter payback period.
Do you have plans to introduce more technologies like AI to enhance the customer experience and overall efficiency?
We need to embrace AI as we grow. While we don’t have set our eyes on what will be the best implementation, we are in the early stage of exploring the use of AI for picking locations for new store openings.
What are your long-term plans?
Kenangan Brands have a long-term plan to be one of the largest coffee retailers in the world. When the time comes, we want to expand in Southeast Asia and other regions.
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Image credit: Kopi Kenangan.
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