Thursday, May 24, 2018
Business

Colombia's Juan Valdez cafes poised to challenge Starbucks

BOGOTA, Colombia — When coffee giant Starbucks recently announced it was bringing its frappuccinos and skinny lattes to Colombia — where a cup of coffee is better known as a tinto — it sparked jokes about selling ice to Eskimos and captured global headlines. But it also obscured a growing contender in the global caffeine war, Colombia's Juan Valdez coffee shops.

The high-end java retailer is already in eight countries — including the United States, where it has stores in Washington, D.C.; New York; and Miami International Airport. But it has far more ambitious plans.

In the next year or so, it will open locations in Central America, South Korea, Malaysia and throughout the Middle East.

It also has venti-sized aspirations for Florida. Starting early next year, Juan Valdez expects to open the first of 50 or 60 locations in South Florida, said Hernan Mendez, chief executive of Procafecol, which operates the Juan Valdez chain.

The company that will lead Juan Valdez's incursion into the heartland of cafe cubano is JVC Franco LLC.

"Juan Valdez is a high-quality brand and product, and we're confident that it will be successful in Florida," said Rafael Belloso with JVC Franco, who is also a longtime Burger King franchisee through his company Beboca. "This is a niche where Juan Valdez can develop into a global brand."

Homeland advantage

When the coffee shops were launched in 2002, Juan Valdez was already a household name. The mustachioed farmer and his mule Conchita are the personification of Colombian coffee, and they have been promoting it around the globe since the 1950s, when the characters were hatched by a Manhattan ad firm.

The coffee chain, owned by the National Federation of Colombian Coffee Growers, simply capitalized on the name.

But you won't find many farmers in ponchos at the cafes. In many ways the Juan Valdez chain is Colombia's answer to Starbucks: It sells high-end brew to urbanites willing to pay a premium for their black fantastic. And for the most part, it has gone unchallenged on its home turf.

At the Procafecol headquarters in a trendy area of Bogota, Mendez admits Starbucks' arrival is a game-changer. But he also thinks Juan Valdez has home-field advantage.

"We don't feel a threat seeing them here and I think it would be good for people to really compare and see what the difference is," he said. "We think we have an edge on quality. And we have (169) stores with great locations. That's a very big asset."

In countries where the two companies are competing, such as Mexico and Aruba, Juan Valdez is holding its own, Mendez said. Chile is a prime example. There, Juan Valdez has 13 stores, many of which are close to the 50 stores that Starbucks operates.

"We monitor perceptions and what our (Chilean) clients say," Mendez explained. "What they always bring out is the quality of the coffee. There is a very big base of consumers who would prefer the 100 percent Colombian coffee that we serve in our stores versus blends that Starbucks might have."

Colombia was an obvious target for Starbucks. The country is seeing strong growth and a burgeoning middle class. In addition, Starbucks has been buying Colombian beans for more than 40 years, when it was just a little shop in Seattle.

While many coffee chains tout their fair-trade status and brag about what they give back to farmers, Juan Valdez is the only international chain of its size that actually belongs to coffee producers. The store has given back about $20 million in royalties to farmers since it started, Mendez said.

Colombians, for one, will appreciate that, he said.

"Colombians have a very deep emotional connection with Juan Valdez, and there's a sense of national pride," he said. "That gives us a very big loyal customer base, and that will help with the competition."

Belloso, the South Florida franchisee, thinks quality will trump variety. Asked if the Juan Valdez experience will be tweaked for South Florida, he said: "We're not going to change a thing."

Comments
At Pinellas Parkís iconic model train store, an ownership change goes off the rails

At Pinellas Parkís iconic model train store, an ownership change goes off the rails

PINELLAS PARK ó The iconic model train store that has sat at U.S. 19 and Haines Road for close to 30 years announced on its website it will be moving to another location."Itís difficult trying to stock a store thatís bigger than the reality is these ...
Updated: 10 hours ago
Denis Phillips, hurricane season guru, talks his signature beer, suspenders and Rule #7

Denis Phillips, hurricane season guru, talks his signature beer, suspenders and Rule #7

SAFETY HARBOR ó Denis Phillips cracks a pop-top and pulls a can that looks a lot like him to his lips."Itís got that citrusy feel to it," he says. "Which is a Florida thing. Thatís not bad." Indeed, thereís a grapefruit finish to Rule #7 Hurricane Sa...
Updated: 11 hours ago
Behind the deal: $52 million boutique hotel coming to Ybor City started with cafe con leche at La Tropicana Cafe

Behind the deal: $52 million boutique hotel coming to Ybor City started with cafe con leche at La Tropicana Cafe

TAMPA ó Joe Capitano Sr. invested in the 1400 block of E Seventh Avenue in 1985, never doubting the huge potential of the property for Ybor City.But the deal to build a $52 million boutique hotel on the site didnít start to come together until six ye...
Updated: 5 hours ago
Sprouts Farmers Market to open new store in Riverview

Sprouts Farmers Market to open new store in Riverview

RIVERVIEW ó Sprouts Farmers Market is opening a new location in Riverview, the chain announced Thursday. The new store will be located at Summerfield Crossing Shopping Center, though Sprouts did not have a specific opening date.The announcement comes...
Updated: 12 hours ago
Tampa Electric to shut down Big Bend coal unit that killed 5

Tampa Electric to shut down Big Bend coal unit that killed 5

APOLLO BEACH ó Tampa Electric Co. is taking a big step away from coal. The Tampa-based utility is spending $853 million to convert its coal-fired Unit 1 at its Big Bend Power Station to natural gas and retire coal-fired Unit 2 in 2021.Five workers di...
Published: 05/24/18
Hooper: More than a restaurant, Lee Roy Selmonís was a meeting place

Hooper: More than a restaurant, Lee Roy Selmonís was a meeting place

Itís where former Tampa Bay Buccaneers quarterback Doug Williams had lunch with current Bucs quarterback Jameis Winston.Itís where University of South Florida fans often gathered to watch the programís biggest road games.Itís where folks showed up in...
Published: 05/24/18
An Amazon Echo recorded a familyís conversation, then sent it to a random person in their contacts, report says

An Amazon Echo recorded a familyís conversation, then sent it to a random person in their contacts, report says

A family in Portland, Oregon, received a nightmarish phone call two weeks ago."Unplug your Alexa devices right now," a voice on the other line said. "Youíre being hacked."Apparently, one of Amazon.comís Alexa-powered Echo devices in their house had s...
Published: 05/24/18
As home sale prices rise, a lack of homes makes it tough on buyers

As home sale prices rise, a lack of homes makes it tough on buyers

Home sale prices continued to rise both nationally and statewide in April as a prolonged dearth of available homes on the market is making it tough on buyers. A total of 24,804 single-family homes changed hands across Florida last month, up 4.1 perce...
Published: 05/24/18
Brink: A 25-cent hike in the federal gas tax is a rotten idea for Florida

Brink: A 25-cent hike in the federal gas tax is a rotten idea for Florida

No matter your politics, the proposed 25-cent hike in the federal gas tax is a lousy idea.Itís regressive, burdening the poor and working class more than the rich.Federal interference with state transportation projects can raise costs, layer on regul...
Published: 05/24/18
Tutor looks to empower athletes in Wesley Chapel

Tutor looks to empower athletes in Wesley Chapel

Rashay Hudson operates a tutoring business in Wesley Chapel, and NaDorian Hudson has played basketball his entire life, including in college and the ABA. Now, the husband and wife duo are combining their areas of expertise with a new program for kids...
Published: 05/24/18