September 2, 2013
COLOMBIA
is renowned the world over for is fine Arabica coffee beans. Oddly, few
Colombians appear keen on the stuff. Each consumes just 1.5kg of coffee per
year on average. A typical Brazilian, by comparison, glugs 6kg-worth. Americans
knock back less, around 4kg, but a lot of it comes from Colombia, which is the
world's fourth biggest producer. The bulk of the country's yearly production of
462,000 tonnes is destined for export. Lesser-quality imports from Ecuador and
Peru account for 90% of internal consumption. But for the past decade Juan
Valdez coffeeshops, owned by the powerful National Coffee Federation, which
represents growers, have tried to convert Colombians to the pleasures of
high-end coffee.
Modelled
on Starbucks, the Seattle-based barista giant, Juan Valdez is now bracing for
direct competition from it. Last week the American firm announced that it will
open its first store in Colombia next year. "The arrival of Starbucks is
no surprise for us," says Alejandra Londoño, a top executive at Juan
Valdez. "We paved the way for them by introducing Colombians to the coffee
store experience." Before Juan Valdez began opening stores throughout
Colombia a decade ago "the custom of drinking coffee outside the home
didn't really exist."
Starbucks's
entry into Colombia follows Juan Valdez's own foray into the American company's
home turf in Seattle, where it opened three shops in 2005. These have since
closed but the federation still runs outlets in in New York and Miami, as well
as Spain, Chile, Peru, Panama and Mexico. "We weren't trying to intrude on
their turf but wanted to take advantage of the coffee culture that Starbucks had
created," Ms Londoño explains.
Indeed,
Juan Valdez thinks it has learned so much from Starbucks that it does not fear
looming competition. And it believes stressing its local roots give it an
edge—though it remains to be seen whether invoking tradition will work in a
country traditionally disinterested in coffee. Starbucks isn't taking any
chances. The American chain says it will serve only locally grown beans at the
50 stores it hopes to open in the next five years. This is good news for coffee
growers, who have been hurt by low international coffee prices and an
overvalued peso. Increased domestic sales, even to an international chain,
would be a better pick-me-up even than a cup of Colombia's choicest blend.