Rural agriculture lender Root Capital and beverage giant Keurig Dr Pepper are embarking on a three-year initiative designed to boost the Indonesian coffee sector.
Called the Indonesia Coffee Enterprise Resilience Initiative (short name: Resilient Coffee), the project is a collaboration with the U.S. Agency for International Development (USAID).
USAID has not publicly announced the project budget, although it is designed to run for three years while supporting 14 coffee enterprises and reaching an estimated 14,000 smallholder coffee farmers. Root Capital, Keurig Dr Pepper and USAID have been engaged in a coffee supply chain strengthening project backed by a $35 million loan guarantee from the U.S. International Development Finance Corporation (DFC).
Going farther back, the United States government has been engaged in strategic capacity-building and development work in Indonesia since the 1950s. USAID now notes that Indonesia is the world’s largest Muslim-majority country, third-largest democracy and the largest economic market in Southeast Asia.
“Indonesia’s sustained ability to resist extremist influences and maintain steady economic growth is critical to regional security and global trade, making it an important partner to the United States,” the agency states in its Indonesia country profile.
Meanwhile, Indonesia continues to be the world’s fourth-largest coffee producing and exporting country, behind Brazil, Vietnam and Colombia.
In an announcement of the three-year Resilient Coffee project last month, USAID Indonesia Mission Director Jeff Cohen suggested private-sector engagement could further benefit the Indonesian coffee sector and its farmers.
“A lack of business management skills and access to credit impedes coffee enterprises from harnessing farmers’ full potential for growth,” Cohen said. “USAID’s collaboration with Root Capital and Keurig Dr Pepper will expand public-private capacity and commitment to strengthening and increasing inclusive economic growth, as well as prioritizing investment in women’s economic empowerment and building resilience against climate change.”
According to a USDA’s Foreign Agriculture Service 2022 report, Indonesia is expected to export approximately 6.5 million 60-kilo bags of green coffee in the 2022/23 year, with the United States being the leading destination.
According to Statista, the FOB value of all Indonesian coffee exports in 2022 was approximately $842.5 million. Keurig Green Mountain, meanwhile, says its annual revenue is currently approaching $13 billion.
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Nick Brown is the editor of Daily Coffee News by Roast Magazine.