Indonesian player on offense in Philippines’ $1bn coffee war

Photo by Cliff Venzon

By Cliff Venzon/asia.nikkei.com – A coffee war is brewing in the Philippines after Indonesia’s PT Mayora Indah announced plans to produce instant coffee locally to take on Swiss giant Nestle and local food and beverage juggernaut Universal Robina.

PT Mayora early this week said it would invest $80 million in the Philippines over the next five years and build a plant to produce its popular Kopiko instant coffee mixes. The company said the factory will help meet growing domestic and overseas demand, but it did not disclose the plant’s capacity.

The move is a fresh challenge for Nestle and Universal Robina, which are trying to defend their shrinking market shares in the Philippines’ $1.1 billion instant coffee market, which, according to Euromonitor International, is forecast to grow to nearly $1.5 billion by 2023. Snack and beverage tycoon Carlos Chan also ventured into instant coffee recently.

“Competition is always welcome,” said Nestle Philippines Chairman and CEO Kais Marzouki, adding that his company will respond by increasing investment. “We continuously expand our capacity. Investing is a continuous process,” Marzouki told reporters Thursday at the opening of a new 2.8 billion peso ($54 million) plant that will make chocolate drinks and all-purpose cream.

Andy Dela Cruz, a consumer analyst at brokerage COL Financial, said he expects that “competition will become stiffer.”

“This brings down the cost for Kopiko and will allow the company to go full force on its marketing,” he said.

At present, Kopiko coffee mixes are imported from Indonesia. PT Mayora in recent years expanded its product line and employed top Filipino celebrities to raise its profile in the Philippines. The marketing push has been a roaring success, helping the company nearly double its market share over the last five years.

“In recognition of Kopiko’s strong Philippine base, along with our growing business in the region, we are expanding our manufacturing and processing operations beyond Indonesia,” said PT Mayora President Andre Atmadja.

Nestle and Universal Robina are feeling the heat.Grappling with rising raw material costs, a Nestle official last year said the company might move its instant coffee production to Indonesia or Vietnam if the government did not offer incentives for companies that buy and produce locally. After a public outcry, Nestle backtracked and promised to maintain local production.

FULL STORY

Find more like this: Business

  • Sinking of Philippine Boat Puts South China Sea Back at Issue
  • Filipinos Were Eating Adobo Before the Spaniards Came, Says Spanish Culinary Scientist
  • The symbols and signifiers of Pinoy manhood throughout our history
  • DA to sell 1 M kilos of surplus mangoes
  • Coca-Cola to invest in P1-billion recycling facility in the Philippines
  • Page 1 | 2 | 3 | 4 | 5 | 6 | 7

    Entertainment

  • Nickelodeon releases first look at rebooted classic kids program Blue’s Clues with Filipino-American host Joshua Dela Cruz
  • How Marvel’s first featured Pinoy superhero can save society
  • This play tells the urgent story of a Filipino comfort woman
  • Will ‘Sahaya’ be the first Pinoy series on Netflix?
  • Z-GIRLS, Z-BOYS with Pinoy members to debut in Korea
  • MORE...

    Features

  • An appreciation of Moro food can bring Pinoy Muslims and Christians closer, says this Muslim chef
  • Showcase of PH culture, heritage
  • US and Philippines: Friends, Partners, and Allies
  • A Transgender Paradox, and Platform, in the Philippines
  • The Box That Brings Christmas to the Philippines
  • MORE...

    Tourism

  • Northern Blossom Flower Farm: Atok’s floral carpet
  • Philippines records ‘all-time high’ 7.1M tourist arrivals in 2018
  • Philippines island Boracay reopens for test run following huge cleanup
  • Philippines closes ‘cesspool’ tourist island of Boracay
  • Boracay Set to Ban Tourists for Six Months During Island ‘Rehabilitation’
  • MORE...

    Sports

  • Filipino speed skater bags spot in 2020 Winter Youth Olympics
  • Pinoy gymnast Carlo Yulo earns historic qualification in worlds
  • Finding a way to bring the NBA to the Philippines
  • First Filipino table tennis Olympian Ian “Yanyan” Lariba dies at 23
  • Skateboarder Margielyn Didal wins 4th gold for Philippines
  • MORE...

    OFW News

  • Filipino maids’ dragon boat team makes splash in Hong Kong
  • DOLE suspends OFW deployment to Kuwait
  • Some OFWs turn to vlogging to beat loneliness, share life abroad
  • Overseas Filipino Bank to serve immigrants, workers
  • The ‘bagong bayani’ of the Philippines
  • MORE...

    Environment

  • ‘Sordid Chapter’ Ends As Philippines Sends Back Canada’s Trash
  • Southeast Asia became dumping ground for plastic waste – study
  • Boracay Set to Ban Tourists for Six Months During Island ‘Rehabilitation’
  • Boracay: the good, bad and ugly sides to Philippine island for tourists
  • Luzon has greatest concentration of unique mammals
  • MORE...

    Pinoy Places
    and Faces