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Juan Valdez is ready to kick Starbucks ass? What happened to Juan Valdez? I only know of one in Times square
Move Over Starbucks, Juan Valdez Is Coming
29 November 2003, The New York Times
by Sherri Day
How about a nice large cup of coffee, light on the guilt?
The Colombian Coffee Federation, which represents more than 500,000 Colombian coffee growers, is planning to open its first coffee shops - all bearing the name Juan Valdez, after the federation's signature character - in the United States by early 2004.
Gabriel Silva, the president of the federation, which is based in Bogotá, says the coffee growers have been "too passive" in claiming a larger piece of the $8.4 billion specialty coffee industry. "In a cup of coffee that you get at a coffee shop, between 1 and 2 cents goes back to the farmer," Mr. Silva said, referring to Colombian growers. "We need to build our own solutions and take the destiny in our hands and really fight for our share of the industry."
Coffee growers are facing a difficult market. Per-capita consumption has been in decline since 1963 with the only growth area the specialty coffee shops, led by Starbucks, according to the International Coffee Organization in London. The price of coffee beans has also declined significantly from a high of about $1.20 a pound five years ago because of a global oversupply of coffee beans from countries like Vietnam and Brazil. In Colombia today, the average coffee grower gets only about 68 cents for a pound of coffee, Mr. Silva said.
Industry trade groups have tried to stem coffee farmers' losses by encouraging coffee producers to destroy oversupply and raise prices. They have also encouraged food companies to buy so-called fair trade coffee, which aims to guarantee what its advocates say is a living wage to poor coffee farmers in developing countries.
But even with Starbucks buying fair-trade coffee at an average of $1.20 a pound, Colombian coffee growers make only about a penny from each cup of coffee sold, Mr. Silva said. The average Starbucks' latte costs $2.25 to $3 a cup; a mocha costs $2.45 to $3.25.
By selling its own coffee at its own coffee shops, the federation, which represents both small and large coffee growers, plans to return 4 to 5 cents for each cup of coffee sold. Each of the federation's 560,000 farmers will also have an ownership stake in the shops, Mr. Silva said. The profits from the retail operation will go back to the federation, which said it would put marketing dollars behind the Juan Valdez brand and work to improve Colombia's coffee-growing regions by building roads, schools, health centers and housing.
"It's certainly interesting," John Glass, a restaurant analyst at CIBC World Markets, said of the coffee growers' plan. "I'm sure they can capture, to some degree, some more integrated profit if they vertically integrate it. The example would be Exxon Mobil. They own gas stations. They take it out of the ground, and they sell it."
The first Juan Valdez coffee shop is scheduled to open in New York, where the federation owns property on 57th Street and Lexington Avenue. The federation also plans to open three more flagship stores in Boston, Washington and Seattle.
The Juan Valdez trademark, which was created by DDB Worldwide Marketing in 1960's, is probably most familiar from a series of television commercials featuring the character standing in American supermarket aisles. The character was suspended in 2001, after coffee bean prices dropped significantly and the federation could no longer bankroll the ad budget for Juan Valdez.
But last summer, Juan Valdez made a comeback. The federation paid $1.5 million to buy him a cameo appearance in the Jim Carrey movie "Bruce Almighty." The federation plans to spend about $20 million on its coffee shops, but did not say how much of that would go for advertising and marketing. It will spend another $9 million this year and next to promote its marketing program for 100 percent Colombian coffee. The Sawyer Miller unit of the IPG Group is spearheading the federation's marketing campaign. Future Brands, another IPG unit, will work with the company on branding.
The stores will largely be modeled after five coffee shops that the federation operates in Colombia. There, they are testing product mix, pricing and the intricacies of running a retail operation. The stores, which are relatively spartan, serve nine different blends of coffee and are decorated in neutral browns and beiges, accented with wooden chairs that do not encourage patrons to linger. Although prices of the Colombian coffee have yet to be set for stores in the United States, Mr. Silva said he expected them to be lower than Starbucks'.
"Starbucks sells an experience," Mr. Silva said. "It's almost like a social place where you go there and meet your friends and read the paper and have some milk with coffee. They are not maximizing the potential of the pure coffee experience. Our stores are going to be much more down to earth - less opportunities for social interaction. It's not going to be a gathering place; it's going to be a place to get superior coffee, the best coffee in the world."
The federation's plan promises to be a delicate balancing act, as the group will be directly competing with its primary consumers, packaged-goods companies that market 100 percent Colombian coffee as an ingredient in brands like Folgers and coffee shops, especially Starbucks, which controls 38 percent of the domestic specialty coffee shop market.
Officials at Starbucks, which has recorded 12 consecutive years of same-store sales growth despite the slumping economy, said they supported the Colombian coffee growers' efforts and would continue to buy coffee beans from them. Starbucks officials said the company was a "significant buyer" of Colombian coffee, but they declined to say how much coffee they purchased from Colombia, which is the second-largest coffee-producing nation in the world, after Brazil.
"We're not worried," said Dub Hay, Starbucks' senior vice president for coffee. "We're well aware of what they're going to do; we think there's room for everyone."
A representative of Dunkin' Donuts, which says it sells more cups of coffee a day than any other retailer, expressed support for the growers' efforts, along with a little confusion about the identity of the coffee shops' namesake. "Is that the guy with the horse?" asked Jon Luther, the chief executive of the restaurant division of Allied Domecq, which owns Dunkin' Donuts.
The federation has enlisted McKinsey & Company, a management consulting firm, to help develop its retail plan for its United States stores. McKinsey has been advising the federation on the creation of its coffee shop business model and the rollout of the stores.
But the federation's learning curve will be steep as the group will have to figure out how to transfer its skills as coffee growers to retail sales, analysts said.
"There's so much more to it," said Mitchell J. Speiser, a restaurant and food service analyst at Lehman Brothers, about the federation's plans. "It's site location; it's branding. It's the right management team. It's hiring the right people. Just on paper, having real Colombian coffee and creating a retail shop around it, they do win the authenticity factor, but it takes a lot more than that to create a successful brand and a successful retail chain."
By cali_brahh on Jan 5, 2009, 16:33 in Friendly Talkzone.
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adrimm (Moderator) says on Jan 5, 2009, 17:19: The branding/look/feel of the cafes sucks. There is nothing inspiring or unique about them.
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cali_brahh says on Jan 5, 2009, 17:40: I would happily give my daily $2.00 to JV for the best coffee on earth, and yes, i agree, the coffee house theme is getting old (in general). If JV amped up its' menu and added some colombian colors to the decor, instead of boring red and white, it would maybe trigger some interest.
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Robert Jorge says on Jan 5, 2009, 20:56: 600 calorie? I figured a minimum of a 1000.
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miamimike says on Jan 5, 2009, 21:36: cali_brahh says on Jan 5, 2009, 17:40 (today): flag "You can take the Banana Out of the Republic but you Cannot take the Republic Out Of The Banana" 0 funny, 0 helpful. |
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ColombiaBoard says on Jan 6, 2009, 07:32: You may have noticed that the news item is 5 years old.....
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cali_brahh says on Jan 6, 2009, 07:38: Yes i "may have noticed the news item is five years old" which is why i'm asking WHAT HAPPENED.
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La_Huella says on Jan 6, 2009, 07:50: I wouldn't call it the best coffee on earth but it's damn sure a big improvement from Charbucks!
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Tinto (Moderator) says on Jan 6, 2009, 08:15: The US rollout doesn't appear to be on plan. They opened two stores in Seattle and closed one. They opened two in Washington DC and closed one. The four in Philadelphia are only open during weekdays (according to their website). I think they still have a couple in Gotham City. I wanted access to health care, housing and education, but, no, I get potholes, trash and silicone tits instead. -Desi. 0 funny, 0 helpful. |
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brad216 says on Jan 6, 2009, 15:41: The ones in philly do a nice job during the week. They are closed weekends because a majority of their business is done through the business workers. Center City Philly does not have enough foot traffic on the weekends to support them staying open.
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goin_south says on Jan 6, 2009, 16:38: as for the coffee wars, I'm drinking some Yuban Organic at the moment, that was muy barrato y rico. hard to believe. I think that's from Guatemala. no?
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nbenjamin says on Jan 7, 2009, 08:10: johnny 2008 - a good point about the difference between growing and making coffee. I am the biggest euro-hater of them all (only because every time I go I feel like I am under assault for being a Californian/American) but lets face it - Italy & Spain make better coffee then the United States, and leaps and bounds better than anyone in South AMerica. But Europe doesn't grow coffee - and south america does - go figure.
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ColombianoGringo (Moderator) says on Jan 7, 2009, 08:22: The funny thing is that some Colombians I know think that the coffee at the McCafes in Colombia is better than the stuff at Juan Valdez. This includes a few coffee growers. I have no opinion because I think all coffee is vile. I'm so hip, I have difficulty seeing over my pelvis. - Zaphod Beeblebrox, Former President of the Galaxy and inventor of the Pan Galactic Gargle Blaster 0 funny, 0 helpful. |
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cali_brahh says on Jan 7, 2009, 09:01: well the beans are from the same mountains, just a different label
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ColombianoGringo (Moderator) says on Jan 7, 2009, 09:04: You'd be surprised at the variety of coffee grown in Colombia. I don't like any of it. I much prefer Colombian style hot chocolate. I'm so hip, I have difficulty seeing over my pelvis. - Zaphod Beeblebrox, Former President of the Galaxy and inventor of the Pan Galactic Gargle Blaster 0 funny, 0 helpful. |
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cali_brahh says on Jan 7, 2009, 09:06: yes, and I would also devote some time finding the best :) but suggestions are also appreciated
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Mononoke28 says on Jan 7, 2009, 10:00: Speaking of hot chocolate, I had the best cup this weekend. We bought those Goya sweet chocolate tablets and it was DEEEELISH! Diana 0 funny, 0 helpful. |
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ColombianoGringo (Moderator) says on Jan 7, 2009, 10:04: Diana, I'm going to have to ship you some food. We can get the real Colombian chocolate at Fiesta along with all kinds of other stuff. If you want to take me up on that, just list the non-perishable stuff you might want and I'll get it and send it to you. I'm so hip, I have difficulty seeing over my pelvis. - Zaphod Beeblebrox, Former President of the Galaxy and inventor of the Pan Galactic Gargle Blaster 0 funny, 0 helpful. |
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ColombianoGringo (Moderator) says on Jan 7, 2009, 10:07: No. I just know that you can't get a lot of the real Colombian stuff you like in Denver. That Mexican Goya stuff is normally not a very good replacement for real Colombian food. I'm so hip, I have difficulty seeing over my pelvis. - Zaphod Beeblebrox, Former President of the Galaxy and inventor of the Pan Galactic Gargle Blaster 0 funny, 0 helpful. |
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Mononoke28 says on Jan 7, 2009, 12:15: I didn't know Goya was Mexican, for some reason I always thought it was from PR. Well, I found out about another Colombian store here in Denver called La Bodega. Not close from our house but we're still going to check it out. The current store we go to sells Colombian stuff but their prices are outrageous, 5 empanadas cost close to $8 and they're tiny. 5 chorizos for almost $10, soups are $5, it's crazy. The place is called Correas International Market and my husband calls it Correas International Robos. =D Diana 0 funny, 0 helpful. |
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ColombianoGringo (Moderator) says on Jan 7, 2009, 12:20: Oh good. I'm glad to hear that you found a place. In any case, the offer stands if you need anything you can't get there. I'm so hip, I have difficulty seeing over my pelvis. - Zaphod Beeblebrox, Former President of the Galaxy and inventor of the Pan Galactic Gargle Blaster 0 funny, 0 helpful. |
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Mononoke28 says on Jan 7, 2009, 13:39: I really appreciate CG, I will definitely keep that in mind. I'm dragging my husband to the new place (if we can find it) to check it out. Diana 0 funny, 0 helpful. |
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ColombianoGringo (Moderator) says on Jan 7, 2009, 14:11: I haven't been back in almost six months. I'm used to going about every three months on average, so I am really looking forward to going. Now that I have to pay for double the tickets, it can get kind of expensive. Between the tickets there and the domestic flights around Colombia, it can add up to $2,000 to $2,500 in just airfare. To boot, we always have to go to Neiva at least part of the trip so that cuts down on the other places we can visit. I've been wanting to go back to San Andres, but that will have to wait for later this year. I'm so hip, I have difficulty seeing over my pelvis. - Zaphod Beeblebrox, Former President of the Galaxy and inventor of the Pan Galactic Gargle Blaster 0 funny, 0 helpful. |
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goin_south says on Jan 7, 2009, 14:23: I drink coffee about as much as anyone else and I just read this Yuban Organic is from Latin and South America, and it was priced nice and the taste is great and their website is simple but interesting.. they talk all that 'sustainable growth' lingo... and eco-friendly lingo
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cali_brahh says on Jan 7, 2009, 14:24: cool gecko :) I hope hes not the stupid geico gecko
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Simon says on Jan 7, 2009, 14:48: To answer the OP's original question: "Just an honest, decent Colombian trying to do the right thing."--Simon 0 funny, 0 helpful. |
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Monpirri says on Jan 9, 2009, 15:20: GOYA Foods Inc is a famous brand of foods sold in many Latin American countries and in the United States headquartered in Secaucus, New Jersey. While the product line remains heavily influenced by its origins in traditional "authentic Spanish cuisine", Goya branched out into the Puerto Rican, Cuban, then in the early '90s they produced Mexican and South and Central American foods categories. It has become the largest Hispanic-owned food business with the Unanue family being the second richest Hispanic family in the United States with a net worth of $750 million.[1] Goya has been serving consumers for over 70 years. The company was founded in 1936 by Prudencio Unanue Ortiz (1886-1976) and Carolina Casal Unanue (1890-1984), two Spanish immigrants.[2] "Anyone who still thinks that Colombia is not a gastronomical paradise needs to have their head examined." Darloup 0 funny, 0 helpful. |
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Monpirri says on Jan 9, 2009, 15:24: Juan Valdez - Cafe de Colombia - Colombian Coffee "Anyone who still thinks that Colombia is not a gastronomical paradise needs to have their head examined." Darloup 0 funny, 0 helpful. |
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ColombianoGringo (Moderator) says on Jan 9, 2009, 15:47: Thanks for the wiki on Goya. Most of the stuff they sell around here is Mexican food. They have some things that are somewhat like Colombian food items, but not really preferable replacements. We're lucky in that there are plenty of places to get real imported Colombian products in Houston, so we don't have to settle for the Goya products. I'm so hip, I have difficulty seeing over my pelvis. - Zaphod Beeblebrox, Former President of the Galaxy and inventor of the Pan Galactic Gargle Blaster 0 funny, 0 helpful. |
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Monpirri says on Jan 9, 2009, 16:18: That's because you live in a Mexican area but I believe Goya launched the food enterprise by selling Puerto Rican and Cuban food products. "Anyone who still thinks that Colombia is not a gastronomical paradise needs to have their head examined." Darloup 0 funny, 0 helpful. |
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