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.
Ten new cafes opened in Kingston over the last 12 months.
Its a record number of cafes in the struggling Jamaican economy. Moreover the city didn’t even drink quality coffee until recently. The farms instead chose to export the best grades to Japan and most Jamaicans drink cheap instant shit.
Reduced export earnings forced farms to find new markets and that new market is domestic. It has resulted in the Starbucks culture finally brewing its way into the island even without a phsyical store presence.
Kingston now probably has about 15-20 proper cafes. Many are within hotels but also on every decent mall. The owner of one of the pioneering cafes said: “Where are most of these cafes now. I expect them to continue disappearing in a year”.
Marley Coffee offers one of the coolest brands from the Jamaica Blue Mountains. This coffee rocks with reggae chocolateness and R&B low acidity. Its led by Rohan Marley, the son of reggae legend Bob Marley, with operations in the US and Jamaica.
Its listed on the OTC Market in the US as Jammin Java and considered a penny stock with thin capitalisation. The team at Marley Coffee however want to change that but are faced with financial hurdles.
For instance, April quarterly sales more than doubled year on year which has puts it on track to surpass the US$10 million annualised target for this financial year.
Despite the rapid sales jump, its net loss quadrupled to US$1.9 million during the three months to April. The company blamed the losses on its widening US distribution.
“The principal reason for the increase in net loss was the US$1.9 million increase in total operating expenses from the growth of the company and its staffing needs offset by the US$473,950 increase in total other income,” said company filings to the Securities and Exchange Commission (SEC).
Losses mean very little to coffee lovers who just want the perfect brew. Marley Coffee offers that, but even that has challenges based on the limited supplies of Jamaica Blue Mountain coffee.
The shortage is based on factors outside the company’s control led by the coffee rust disease. During the April quarter the company purchased just US$65,000 worth of Jamaica Blue Mountain coffee. which accounted for a small fraction off its US$2.1 million in quarterly sales. Comparatively, the company bought one-third more Jamaican coffee a year earlier.
In fiscal 2014, Marley Coffee established a national grocery distribution network, increased its brand awareness and strengthened its international presence, including its entry into two of the largest chains in the US, Safeway and Kroger.