Chinese coffee giant Luckin Coffee has signed a memorandum of understanding with the Banggai Islands Regency, Indonesia, designating the region as the exclusive premium origin for coconut milk used in its signature Coconut Latte, the company announced on March 13. The islands will be named "Luckin Exclusive Coconut Island."
Under the agreement, the Banggai Islands Regency grants Luckin Coffee and its partners exclusive rights to source coconuts from the region. Over the next five years, the company plans to procure approximately 1 million tons of coconut raw materials that meet its quality standards.
This partnership not only reflects Luckin Coffee's dedication to high-quality ingredients but also reinforces its value of offering products directly from their authentic origins. As one of the world's key coconut-producing regions, the Banggai Islands' premium coconut resources will play a vital role in supporting Luckin Coffee's supply chain.
Li Shan, senior director of Luckin Coffee's supply chain center, noted that with Banggai Islands' premium coconut resources, Luckin Coffee will further strengthen its high-quality supply chain. By establishing a comprehensive quality control system from source to consumers, the company seeks to continually provide high-quality products to customers around the world. Since its launch, Luckin Coffee's Coconut Latte has surpassed 1.2 billion units in sales as of January 2025.
Beyond procurement, Luckin Coffee will work with the Banggai Islands Regency to develop a systematic approach to coconut resource development. The company and its partners plan to establish agricultural centers in the region to boost coconut production while providing farmers with seedlings, fertilizers, and other resources to expand cultivation. The initiative aims to foster a sustainable cycle of industry investment and community development, driving long-term growth and supporting local sustainability through technical support and collaborative efforts.
The agreement comes as China and Indonesia mark the 75th anniversary of diplomatic ties and as Indonesia joins the BRICS group. Luckin Coffee aligns with China's push for deeper multilateral trade cooperation, expanding its global high-quality supply chain and strengthening economic and cultural ties with top-sourcing regions worldwide. This move also supports China's Belt and Road Initiative, contributing to a more open global economy and showcasing the strength of Chinese brands.
Luckin Coffee said that it will continue to uphold the "from the island, for the island" philosophy by deepening its presence in sourcing regions through dedicated community partnerships. The company aims to maximize the value of high-quality Indonesian coconuts in end products, delivering more high-quality products to consumers. (Chen Zhezhi)
