Industry News | August 27, 2013

Starbucks Brews Up Business In Colombia

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Starbucks Coffee Company announced that it will open its first cafe in Colombia next year, expanding the company's longstanding relationship with Latin America and a 42-year heritage with Colombian coffee farmers.

"Our long and proud history of purchasing and roasting Colombian coffee dates back to Starbucks' 1971 founding," says Howard Schultz, Starbucks chairman, president, and CEO. "From our humble start in Seattle's Pike Place Market, Starbucks has always admired and respected Colombia's distinguished coffee tradition. It is an honor for us to bring the 'Starbucks Experience' and Colombia's finest coffee to this important and fast-growing market, while collaborating with Colombia and USAID to continue empowering local coffee growers and sharing the value, heritage, and tradition of its coffee with the world."

Starbucks stores in Colombia will be operated through a joint venture between two of Starbucks' longest-term business partners in the Latin American region: Alsea and Grupo Nutresa. 

As Starbucks' leading licensed partner in Latin America for more than 10 years, the alliance with Alsea covers more than 500 Starbucks stores across Mexico, Argentina, and Chile. Alsea started operations in the Colombian market in 2008 and now operates three brands with a total of 48 locations.

Colcafe, a subsidiary of Grupo Nutresa, Colombia's leading food company, worked with Starbucks on the breakthrough Starbucks VIA soluble coffee, and continues to be an innovative, strategic partner in manufacturing and now retail.

Starbucks Colombia will open its first store in Bogota in 2014. The company has aggressive plans to open stores in Bogota and many other major cities throughout Colombia over the next five years.

"We are very excited to work alongside such a prestigious Colombian company as Grupo Nutresa to introduce the 'Starbucks Experience' in Colombia," says Fabian Gosselin, Alsea's CEO. "I am convinced that the dynamism and evolution of this market, together with its rich coffee culture tradition, will welcome a first-class brand such as Starbucks and its premium Colombian and world coffee blends. This will give us the opportunity to execute an aggressive and profitable development plan, which will strengthen our expansion strategy in Latin America."

To further demonstrate its deep commitment to and investment in Colombia, Starbucks announced the expansion of its manufacturing relationship with Colcafe to offer Colombian customers locally sourced and roasted espresso, drip, and packaged Colombian coffee.

Starbucks has been roasting coffee in Colombia with Colcafe since 2008, when Starbucks developed its signature Starbucks VIA Ready Brew. Under the new manufacturing agreement, Colcafe will build on the roasting and manufacturing for Starbucks VIA Colombia in its facility in Medellin, Colombia, and become the first roaster in Latin America to roast coffee for Starbucks espresso and packaged coffee.

“We feel very confident that partnering with Alsea, given their proven track record of successfully operating Starbucks in Latin America, together with our local knowledge, will allow us to deliver the ‘Starbucks Experience’ to Colombians and achieve a leading position in the market,” says Carlos Piedrahita, Grupo Nutresa’s CEO. “We have great pride in being the first Latin American market where Starbucks commits to serving only locally sourced and roasted Colombian coffee. We are highly honored to enter this partnership and to be the first roaster in this region to merit the support and trust of such a respected and admired global brand as Starbucks.”

Starbucks plans to continue to build on its 42-year purchasing relationship with Colombian coffee producers and further strengthen the company’s support for Colombian coffee farmers.

To build on this commitment, Starbucks announced a public-private partnership with USAID to increase Colombian coffee yields and enhance economic opportunities for Colombian farmers. This partnership will enable Starbucks to expand the collaboration with the Colombian Coffee Grower Federation and suppliers and exporters throughout Colombia to provide technical and agronomy support to Colombian farmers through a $1.5 million commitment by both Starbucks and USAID, creating a three-year, $3 million investment.

This investment will enable the Starbucks Farmer Support Center, established in Manizales, Colombia, in 2012, to deliver training and agronomy support and positively impact 25,000 farmers throughout the country.

“We are proud to partner with Starbucks in Colombia, a company that, like us, understands the role of strategic partnerships to achieve long-term, sustainable, economic solutions,” says USAID administrator Raj Shah. “Through this collaboration, we are helping to meet critical development needs in rural areas of Colombia that will create stability and sustainability for small-scale coffee growers.”