Colombian coffee icon defies Starbucks doldrums

by Dave

International Herald Tribune

Starbucks may be struggling, but a Colombian cafe chain built on the fame of the world’s biggest coffee icon is determined to buck the trend.

Even as cash-short consumers cut back on gourmet blends, the Juan Valdez Cafe is selling coffee at 101 stores across Colombia, as well as at outposts in New York, Seattle, Philadelphia, Santiago, and Spain. It plans to add 500 more shops across the U.S., Latin America and Europe by 2010.

The Bogota-based chain has a unique premise: its shops are owned not by investors, but by 22,600 coffee-growing shareholders who opened them to advertise the beans they sell, not to make a profit.

The slick cafes named for a fictional coffee grower invented as an advertising pitchman nearly 50 years ago are meant to draw younger consumers, introducing them to Colombian coffee in hopes they’ll start requesting it at restaurants and grocery stores.

What we’re doing is financing our promotion through a business” using the stores as tasting shops for customers to sample the product, said Gabriel Silva, CEO of the National Federation of Colombian Coffee Growers. The group created the chain in 2002 and now helps oversee it.

Colombia, the world’s third-biggest coffee producer after Brazil and Vietnam grows more washed Arabica beans than any other nation. Hand-picked on Andean hillsides, the fragrant beans are considered by many to brew the best coffee, said Rodrigo Alarcon, a professional coffee taster in Bogota.

Yet Colombian growers rely on more than flavor for their success. In 1927, they formed their own federation to stabilize markets by buying up crops when prices fall, guaranteeing demand and growers’ income. The National Federation of Colombian Coffee Growers now buys about 23 percent of its members’ beans, reselling them in grocery stores and cafes around the world and enforcing quality standards to protect the national brand.

While promoting Colombian beans abroad, the chain has also changed consumer habits in Colombia. Selling European steamed-milk specialties alongside traditional Colombian brews, the cafes are drawing a new generation of coffee fans with lattes, cappuccinos, and icy frappes.

Juan Valdez sweat shirts have even become a symbol of national cool, popping up across the country in the last five years.

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