Development of Creative Coffee-Based Agribusiness at BUMDesma Giri Arjuno, Batu City, East Java

Abstract

The development of Arjuno Arabica coffee in Batu City holds significant economic potential, particularly through the strengthening of collective institutions such as BUMDesma Giri Arjuno. However, in practice, various challenges remain in the areas of post-harvest processing, packaging, branding, and marketing, which have prevented the product’s value added and competitiveness from reaching their full potential. These conditions highlight the need for a creative agribusiness approach that emphasizes innovation, technology, and the creation of value-added products based on consumer needs. This study aims to analyze the performance of coffee-based creative agribusiness at BUMDesma Giri Arjuno and to formulate a creative business model based on a value proposition capable of enhancing value- added, branding, and market reach. The study employs a qualitative descriptive method with a case study approach. Data were collected through observation, in-depth interviews, questionnaires, and documentation from BUMDesma managers and coffee farmers. Performance analysis was conducted using a scoring method based on indicators of innovation, technology, and value addition across each agribusiness subsystem. Subsequently, the business model was formulated using the Value Proposition Canvas (VPC) approach to identify the alignment of value with customer needs and the Business Model Canvas (BMC) to design an integrated business model. The research findings indicate that the performance of the coffee-based creative agribusiness at BUMDesma Giri Arjuno falls into the high category with a score of 4.14, with the innovation aspect (score 4.07) reflected in the implementation of an agroforestry system, diversification of coffee processing (green beans, roasted beans, and ground coffee), and branding based on local wisdom; the technology aspect (score 3.50) still requires optimization, particularly ix during harvesting, packaging, and marketing; and the value-added aspect as the highest indicator (score 4.85), demonstrating the success of creating added value through processing, packaging, and product diversification. Analysis of the Value Proposition Canvas (VPC) reveals that the primary uniqueness of Arjuno Arabica coffee lies in its distinctive flavor and aroma, featuring herbal notes such as sinom and temulawak, as well as fruity notes like apple and orange, which serve as the key differentiator from coffee from other regions and act as a major draw for specialty coffee consumers. Consumers also expect consistent quality, a strong local identity, informative packaging, and ease of purchase. Based on these findings, the value proposition of BUMDesma Giri Arjuno is formulated as high- quality Arjuno Arabica coffee with distinctive flavors and aromas rooted in agroforestry, informative packaging, and storytelling about the local identity of the slopes of Mount Arjuno, with an emphasis on specialty taste and local branding. The Business Model Canvas (BMC) analysis further identifies development opportunities through strengthening the value proposition, expanding distribution channels via digital marketing and coffee shop partnerships, enhancing customer relationships within the coffee-loving community, and strengthening key partnerships with local governments, academia, and coffee industry stakeholders.