Starbucks is opening its first Colombian store in Bogotá on Wednesday, a big foray into a nation that is one of the world’s top producers of quality coffee and has strong coffee retailers of its own.
The three-story outlet, located in one of the South American capital’s trendiest districts, marks a few firsts for Starbucks beyond the fact that it’s debuting in a country where it’s been buying beans for four decades.
It’s the first time the company will exclusively serve coffee sourced locally — something made possible not only because Colombia has top-notch beans, but also because Starbucks has a long-standing relationship with a big roaster there, said Cliff Burrows, Starbucks’ head for the Americas, in an interview.
That roaster is Colcafé, a unit of Colombia’s Grupo Nutresa, the same roaster that helped Starbucks develop its Via instant coffee.
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It’s also the first time Starbucks installs a Clover machine — a $12,000 high-end system for making single-cup brewed coffee — and sells its rare Reserve beans in Latin America. Burrows said Colombians’ thirst for drip coffee makes the country a good market for the Clover.
For Starbucks, setting up shop in Colombia is a big deal — a fact that was highlighted by the presence of CEO Howard Schultz at the opening ceremony.
It’s part of an aggressive expansion effort there and all over Latin America, as the coffee giant seeks to keep its growth momentum going. Latin America, a longstanding source of beans for Starbucks, is nevertheless relatively untapped — the company has 740 stores in the region, just over 3 percent of its total stores worldwide.
“Our admiration and respect for Colombian coffee farmers dates back to our humble beginnings in Seattle’s Pike Place Market in 1971 when we first began purchasing and roasting Colombian coffee,” Schultz said in a prepared statement.
Colombia’s fast-growing economy and booming middle class represent a good opportunity for profit, but also challenges.
The Seattle giant faces strong domestic competition in the form of Juan Valdez, the brand that was created by the country’s coffee growers’ federation to represent Colombia’s coffee globally and has evolved into an extensive network of coffee shops here.
The Juan Valdez Cafe chain has about 270 stores worldwide, including 191 in Colombia. Its profits quarterly profits grew by a fifth from the same period in the previous year. Its symbol — a mustachioed coffee farmer and his faithful donkey — is well known all over the world.
“There’s room in the market for us both,” said Alejandra Londono, head of international sales for the Colombian chain.
Juan Valdez’s social mission promoting Colombian coffee and contributing to producers’ welfare is likely to keep customers loyal, said Londono. Since its founding 11 years ago, the Colombian chain has funneled more than $20 million to a national fund that supports the country’s 560,000 coffee-growing families, some of whom also own shares in the company.
Burrows says the company acknowledges the challenge.
“We come with a great deal of respect not only for the coffee growers but with what happened here in terms of the coffee industry,” he said in an interview.
The stores in Colombia will be operated through a joint venture between Colombian food giant Grupo Nutresa and Alsea, the company that runs Starbucks’ stores in Mexico, Argentina and Chile.
It’s unclear whether Starbucks’ bid to rely on local coffee can be replicated elsewhere in the Latin America region. Part of the challenge is finding a local roaster that is consistent with the company’s standards. The other is that Starbucks wants to introduce customers to other types of coffee from across the world.
“One of the challenges will always be: we want to serve local coffee. But we also want to represent our blends,” Burrows said.
The new store, split in three stories and an outdoor terrace, serves as a showy flagship for the company. Other than the usual grab-and-go retail area for espresso-based drinks, there’s a level with a coffee bar that serves French press and Chemex pour-overs. The third level is a quiet sitting area, the company says.