Starbucks launches new operation in Colombia

The Miami HeraldJuly 16, 2014 

— BOGOTA_Ever since opening its first store in Seattle's Pike Place Market in 1971, Starbucks has been serving Colombian coffee. And as the java giant's green mermaid logo has become ubiquitous across the globe, Colombia's coffee beans have always been part of the mix.

So it was only a matter of time before Starbucks set up shop in this Andean nation that it credits with its success.

"We always wanted to come to Colombia, we always wanted to finish the circle of this 40-year history that we had with Colombian coffee farmers," said Starbucks Chairman Howard Schultz as he inaugurated the company's first store here. "In a sense, we wanted to show the Colombian people our expression of Colombian coffee, our interpretation."

Starbucks interpretation of Colombia's tinto coffee is served in a three-level cafe set in the posh Parque 93 neighborhood. The company says it's the first of five shops it will open this year in the capital. Within five years, Starbucks hopes to have spread to 50 locations.

Entering the Colombian market - dominated by Juan Valdez - is a delicate balancing act. The country is the world's fourth largest coffee producer after Brazil, Vietnam and Indonesia, and the bean is deeply entwined with national identity.

Starbucks is tipping its hat to the country's heritage by only serving Colombian beans - something it does nowhere else.

"For the first time, forever in our history, we will be sourcing, roasting and serving coffee from the same country," said Cliff Burrows, the Americas president for Starbucks. "We have talked about doing this for a long time but in Colombia the quality of the coffee, the fact that we buy and share Colombian coffee around the globe in 65 countries, made this a unique opportunity."

As reporters hounded company representatives, dozens of clients clustered outside waiting for a taste of Seattle.

Johanna Rojas, 38, won the distinction of being the first paying client in Colombia. As she sat with a cappuccino and carrot cake that cost her 18,000 pesos, or about $9.70, Rojas said the price was comparable to what she might pay a few yards away at the country's dominant coffee chain, Juan Valdez.

"Juan Valdez has good coffee but their prices are too high and their sizes are too small," she said. "Competition is healthy."

Starbucks in Colombia will be operated through a joint venture with Mexico's Alsea and Colombia's Grupo Nutresa.

Alsea Chairman Alberto Torrado said his company plans to invest $60 million over the next few years in Colombia to expand the groups' operations - but he contends that Juan Valdez and other coffee shops won't suffer as a consequence.

"What Starbucks has done in every market that it has entered is grow the market," he said. "And the market here is enormous."

Starbucks opened its first store in Mexico 13 years ago and now it has more than 400 shops. In Mexico, per-capita coffee consumption has grown from 1.3 pounds per year to 2.6 pounds, Torrado said.

Still, Juan Valdez isn't conceding the fight. The company, which is owned by the National Federation of Coffee Growers, has almost 200 locations in Colombia and has been expanding abroad - most recently into Malaysia and South Korea.

Last year, Juan Valdez said it planned to open dozens of locations in South Florida - complementing its store at Miami International Airport. The expansion will begin Monday with the opening of a cafe in downtown Miami. The company plans to open about 60 cafes in South Florida in the next five years, said Alejandra Londono, vice president of international business. After that, Juan Valdez plans to open stores in Texas and California, she said.

Starbucks first set foot in the region in 2002 with stores in Mexico and Puerto Rico. Colombia is its 13 country in Latin America and the Caribbean, and the company expects to open in Bolivia by year's end and in Panama in 2015.

"This is an exciting market for us," Burrow said. "The countries are incredible in their depth of culture and their passion for coffee. The warm welcome we've received makes us optimistic."

Even so, officials said the Colombia store is particularly gratifying.

Dominating one wall of the shop is a mural that shows Starbucks' mermaid watching a boat overhead - it symbolizes the first shipment of Colombian coffee to Seattle in the 1970s.

Schultz said he hopes Starbucks is bringing something more than just coffee back to Colombia.

"We have learned over the years that Starbucks has literally become this third place between home and work," he said. "People long for a human connection and a sense of community... Starbucks stands for more than just coffee; we also stand for the relationship of humanity."

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