Starbucks would drop two cafes in Jamaica which will target tourists primarily at least initially, according to Coffee dealers who spoke to Jamaicamocha .
The talk is that the Sangster International Airport in Montego Bay
could see a location followed quickly by another, at a new business
hotel under construction in Kingston. (Let’s avoid names for the moment.)
Of course, last month the Gleaner reported that Starbucks is considering entering the island along with other Caribbean territories in the medium term.
It just so happens that the busy Montego Bay airport which currently
doesn’t have any store slots available will see 25 per cent of the
stores come up for contract renewal this year, according to media reports.
Sources say that’s where the Starbucks franchisee will snatch up a vacancy and outbid an
existing operator. But it might not even have to come to a bidding
war, as the franchisee already supplies the airport with food
and beverage. (I have already said too much.)
Who are the two private sector players seeking to acquire the
Starbucks franchise in Jamaica–They are both in hospitality sector, the
Will Starbucks increase the coffee culture? Will Starbucks improve a
cup of local coffee? Or would it simply increase the price? Let’s see. Not all cafe players are upbeat about the prospects especially those who earn from the tourist market.
Jamaica Blue Mountain coffee supplier Amber Estate will resume selling roasted beans in April. Until then it supplies green beans to Starbucks.
In its place, the makers of Amber, Gold Cup Coffee will supply Gold Cup Supreme peaberries. It’s a lovely chocolate with lemon delight. Pure beauty for the lips enjoyed best as a pour over or French press.
- Producer: Gold Cup
- Elevation: 2000-5000 feet
- Processing Method: Washed
- Tasting Notes: Balanced with chocolate and citrus
- Beans: peaberries
- Body: Medium
- Acidity: Medium
- Pairing Flavors: Nuts, citrus, baking spices
Starbucks plans to consider opening a coffee store in Jamaica.
When Jamaicamocha spoke to Jamaica Blue Mountain farmers on the implications most had a mixed bag of views.
Some say it will benefit the local industry provided the local authorities force Starbucks to follow the lead of Colombia.
Others say it will hurt the local cafe sector, still burgeoning and still educating the public on how to drink brewed coffee. Remember that this luxury coffee producing nation generally drinks tea and imported instant coffees.
Those who want Starbucks to buy local also acknowledge another problem: How can Starbucks sell coffee at a similar price-point as in major markets while using expensive Jamaican coffee?
A solution involves using cheaper Jamaica low mountain beans but also allowing the giant to import commodity beans for blending as Jamaica Blue Mountian blends.
Even this solution would likely result in farmer protests and calls by other cafe players of favoritism.
Let’s see what brews.
Starbucks opened its first store in Colombia in 2014 and now has 11 stores. Medellin its latest, opened last September. But the chain wants to open 50 in that coffee producing country.
Starbucks now has over 1,000 stores in Latin America since entering Mexico in 2002. The new store, located in Medellín’s Milla de Oro on Poblado Avenue, is designed to honor Colombia’s rich coffee heritage while celebrating the city’s eclectic vibe.
“Since opening its first store in Colombia, Starbucks stores in the country have served 100 percent locally sourced and roasted coffee for in-store beverages to honor the country’s coffee heritage and the company’s 45-year history of sourcing premium arabica coffee from the region,” confirmed Starbucks on its press pages. “Customers can explore different varieties of Colombian coffees including Starbucks single-origin Colombia Nariño, Colombia Espresso, Colombia Espresso Decaf and the medium-roast Colombia coffee.”
The price of Jamaica Blue Mountain (JBM) coffee jumped so much in 2015 that it now rivals the price of Kopi coffee and outpriced itself from Hawaiian Kona, but what goes up comes down.
Coffee bars around the world historically offer Kona and JBM at roughly the same prices . The 2015 local coffee shortage and rise in Japanese demand changed that with JBM retailing at about $60 per pound from about US$35 a pound a few years earlier for quality beans.
It resulted in the wealthy huffing and puffing but still buying the luxury super-uber-yummy coffee from Jamaica. The regular rich however choose to drink tea instead ( Starbucks buys Teavanna ).
Jamaicamocha spoke to key dealers who predict the fall in price of JBM by 2017 due to reduced demand in Japan and ramp up in supply. “A large Japanese dealer stopped carrying JBM and other roasters in Japan are bailing and crying about the price,” said dealer A.
With the rise in prices for JBM every farmer’s son and grandson returned to till the soil. The rise in farmers on resuscitated lands will result in a jump in production and the magic number is 350,000 boxes for the crop year.
Hitting that target would put supply at a decade year high.
Another dealer said that JBM’s market is like a pyramid the higher the price the smaller the market. Simple economics dictates that price remains when demand and supply are in equilibrium: Yet demand is falling and the supply is rising.
Jamaicamocha believes on advise of dealers that the prices will fall back to about $45 a pound by 2017. Until then small poor farmers benefit. Dealers benefit and the discerning consumer gets his uber fix without counterfeits.
A respected local coffee brand SALADA Foods Jamaica Limited complained of Jamaica coffee price increases.
The increases slashed its gross margins by more than one-quarter, the company stated. It’s the latest processor to complain about the over 30 per cent price hike in one year, and 250 per cent hike over two years, towards $11,000 per box of coffee cherry. However the price rise is due to a severe supply shortage based on drought, disease, farm decay and now fire. Concurrently, large overseas buyers are demanding more coffee from Jamaica. On the micro-level farmers are demanding more per box due to the impact of currency depreciation on farm costs, and also the cost to protect the coffee against disease and theft. Two years ago processors paid roughly $3,000 for a box of coffee cherry to farmers.
“Profits continue to be adversely affected by the increases in price of coffee beans realised in the first quarter and the performance of its subsidiaries Mountain Peak Food Processors Ltd and Pimora Company Ltd,” stated Salada in a notice prefacing the financials signed jointly by Chairman Patrick Williams and Director Aubyn Hill. “The gross margin for the six months was 27.5 per cent, a reduction of 27 per cent when compared with the same period in the prior year. This resulted from the higher cost of coffee bean now being processed.”
Salada made $37-million profit before tax in the March quarter 2015 on $220 million in revenues, or 184 per cent higher profit year-on-year.
Just this week, large coffee processor Mavis Bank Coffee Factory Ltd makers of Jablum indicated that fire damaged at least $200 million worth of farms thus far. Last week US-based Marley Coffee cautioned its investors that the supply shortage of Jamaica Blue Mountain coffee could affect its sales going forward.
In recent times, Salada has faced increased local coffee competition in both the instant and brewed markets. Salada in its previous quarter hinted that it would seek to launch new coffee products this year. However, its latest March financials failed to add information on product development.
Last year, large coffee company Mavis Bank Coffee Factory Ltd launched True Brew, an instant coffee. It also launched Jablum Caribbean Blend, a mixture of beans from Jamaica and the Caribbean. In 2012, it also launched a high-end product called Jablum Gold.
Coffee shortage continues to affect the availability of Jamaica Blue Mountain JBM beans. Its based on a confluence of factors now led by drought.
Less beans resulted in price increases of roughly 40% in real terms to consumers. Interestingly small farmers benefit with box prices of coffee cherries inching past J$8,000 (U$70).
” I hear they paying up to J$9,500 a box,” a source indicated.
To consumers it resulted in a shortage of favourite brands.
For instance, the beans of large supplier Jablum remain out of stock–going three months now or since November. “We won’t have brand before April,” another source said this week.
Twymans –started restricting sales.
Amber–only has ground available but peaberry beans are still available in its ‘Supreme’ brand
Island Blue –beans are once again available in limited supplies
Wallenford Estate–has beans
Cafe Blue —beans available
Coffee Traders–beans available
CRJ –beans and kcups available.
Wallenford recently won the bid to supply global coffee chain Starbucks with single estate Jamaica Blue Mountain coffee in Japan stores for 2015.
It means that Starbucks will sell Wallenford single estate coffee exclusively in Japan.
Concurrently, Jamaicamocha understands that jamaica coffee from Amber Estate will continue to be sold in USA.
It’s Great news for Wallenford which last sold coffee to Starbucks about five years ago.