“ For companies from abroad that come to Indonesia, Kartika Sari is positioned as a company that has a deep familiarity of the local market and well-prepared with an automated production operation. ”
Kartika Food Industries originally began as a home industry founded by my mother in 1974 to channel her hobby. It was not until 1986 that the brand Kartika Sari was introduced. She invented a banana and cheese puff pastry which grew to become very popular amongst visitors of the city of Bandung; so well-known that buyers had to queue up to two hours at our shop just to get it. In those earlier years, we only had the capacity to produce as many as 500 boxes per day. This took place at my house which operated like an open kitchen for the customers. From this setup, word rapidly spread from mouth to mouth, eventually leading us to the decision to establish the brand.
When I joined the company in 2000, we already had four outlets and I saw an enormous potential for further development. Kartika Sari had largely remained a home industry with no deliberate marketing and customer engagement efforts or sophisticated outlet operations whatsoever; though there is no denying that word-of-mouth had served highly effective to our success at the time. Seeing this, I began to standardise our shops, and drawing upon my background as a graduate of industrial engineering, I also saw the need to have a GMP. Furthermore, as demand for our pastry became too high, I started to automate our production by importing various machinery and ovens from Europe.
Kartika Sari is especially geared towards the souvenir industry. People visiting Bandung buy our products as gifts to take to their hometown. For that reason, we put creative efforts into the packaging as well as into providing more product variety. At present, Kartika Sari has seven outlets in Bandung and operates two divisions; a division for puff pastry products, and another division for long shelf-life products which we distribute to supermarkets all over Indonesia. We have also provided private label services to convenience store chains such as Alfamart and Hypermart, and opened two restaurants serving authentic Indonesian food with plans to open another one in 2017.
We liken Kartika Sari to a software company, meaning that we have a collection of hundreds of recipes at our bakery with some not introduced to the market yet. Kartika Sari is driven by innovation; therefore we come up with at least one new product every month. This company currently has 80 different in-house developed products and a total of 300 varieties if local snack products are counted.
I am actually very optimistic about our sector considering the rapid growth of the middle-class population. That said, the Jokowi administration needs to improve the country’s infrastructure as well as regulations. In the context of our operations, Kartika Sari strives to become an ideal local brand in Indonesia’s food and beverage industry where anyone can actually open a shop, a bakery or a home industry at will with little control from the relevant authority. This purpose underlies our initiative to implement a GMP and follow all applicable regulations because as the market develops, consumers will look to us as we do not have any liabilities to attend to. Overall, President Joko Widodo has done quite well.
The generally positive outlook, however, comes with notes about some disadvantages faced by the industry in Indonesia compared to other countries. In the bakery business here, flour and sugar already account for more than half of the production cost, causing the final price to be less competitive. This is met by a country image which has prospective buyers having Indonesia in mind only when searching for cheap products. It will take awhile to rebrand this country.
We see this as an opportunity rather than a threat. For companies from abroad that come to Indonesia, Kartika Sari is positioned as a company that has a deep familiarity of the local market and well-prepared with an automated production operation. With a population that is much larger than other countries in the region, the market is sizeable enough for everyone. Even in Bandung, our daily capacity to serve 5,000-10,000 customers is not even 0.1% of the city’s populace. On the contrary, Indonesian brands wishing to export their goods need to overcome some challenges, which is why we also deem it necessary to have a foreign partner in carrying out international expansion initiatives.
Kartika Sari is absolutely open to the possibility. We need partners to develop this company beyond a family business. Through engagements with experienced manufacturers, the learning process will be faster. This also applies for our marketing operations. In this respect, acquiring know-how serves as the most promising prospect.
Indonesian people are very enthusiastic about trying new products; we are very adventurous. As for Kartika Sari as a bakery, we seek to educate consumers and provide them with good-quality, natural products. Moreover, we aim to instill a sense of respect for local products among our consumers to counter the prevailing notion that foreign goods are always better than local ones.