Starbucks lattes nearly half cheaper in Latin America than Jamaica

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Mavis Bank, Jamaica–An independent study on Starbucks chains found that it costs nearly 50 per cent more to buy a latte in Jamaica than in other major coffee growing nations in the region, Colombia or Guatemala.

It costs US$3.30 in Jamaica but the same latte costs US$2.04 in Colombia and US$2.86 in Guatemala. All produce coffee, so why the disparity.

Colombia, formalised a policy which forced Starbucks to buy its coffee locally. As such all the coffee consumed in Starbucks Colombia comes from various coffee regions in Colombia. Jamaica does not have such a policy and this influences the pricing of coffee, as it imports all its beans. In fact Caribbean Coffee which holds the franchise for Starbucks in the island admitted that even the Jamaica Blue Mountainconsumed in Starbucks locally is reimported. Additionally, within a Starbucks in Jamaica, the cheapest origin branded beans are actually from Guatemala for roughly one-third the cost of Jamaica Blue Mountain. Cost conscious consumers gravitate to the cheaper product.

Finder, a non-aligned comparison platform and information service, curated the index, and ranked Jamaica at 43 among the 76 countries surveyed. It ranked Guatemala at 61 and Colombia as the third cheapest in the world.

A latte is made of one-third espresso and two-thirds milk with light foam on top.

The study itself has two components: a coffee cost comparison and a GDP valuation index. In Jamaica, the index showed that a latte is being sold at 6.01 per cent less than the expected coffee cost based on the country’s GDP per capita. In Colombia it found that the coffee is being sold for one-third more expensive than it should, when matched against its GDP per capita.

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Denmark offered the most expensive location for a latte at US$6.05 versus Turkey the cheapest at US$1.78. Geographically, Europe offered the most expensive cup of coffee, followed by Asia and the Americas.

In Jamaica, as Starbucks cafes get more packed, the locals which traditionally do not drink coffee are being weaned on lattes and caps and flat whites. What of the local farmer. Its not likely to change anything as the demand is for cheap quick coffee rather than the luxury provided from the Blue Mountains.

Consequently, the actual benefit of Starbucks in Jamaica is the subsidised Guatemala coffee and other blends. These imports are likely to affect the coffee trade balance in Jamaica as exports have flattened. But that’s the focus of a different article.

The Starbucks index is an informal way to measure the strength or weakness of local currencies for a common item against other countries. It’s supported by research that excludes variances that affect the cost of a coffee, like prices of raw beans, local labour costs and taxes.

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Deaf Can getting most exposure at Jamaica coffee festival 2019

Deaf Can! the not for profit coffee enterprise that trains deaf students in the art of coffee got the most exposure at the Jamaica Coffee Festival even above global brands Starbucks.Why– for a few reasons.First, patrons were not seeking out Seattle roasted coffee (or re-imported Jamaica coffee). So Starbucks prominent stall was largely empty. Largely ignored.Second, Deaf Can! assisted three companies which led the company to have three cobranded booths at a coffee festival. That resulted in them having arguably the largest floor space. Third , they offered a zany cold brew coffee made from peaberries. It represented one of the most innovative core coffee drinks on display.DeafCan is currently seeking to raise about $7.5 million from the Jamaica Social Stock Exchange to properly finance their coffee farm in Mandeville. Why not check out their business model here .Over 15 Jamaica coffee brands are represnted at the festival. Notable absent brands are Jablum and Wallenford. There was a cobranded Cannonball and Jablum stall but no marketing beyond a small Jablum banner.Love Jamaica Coffee but can’t be at the festival consider these coffees .

New players in Jamaica coffee offering cheaper deals in 2019

So more good news for buyers. When the mist of microclimate clears, new players are seen offering deals for their brands. They hype their beans as the best from the Jamaica Blue Mountain. Yeah so does everyone, yet some coffees taste ordinary and others amazing.

New players in the retail scene include Bawk Coffee, Plantation Blue and one can even say Stoneleigh.

These players all were involved in various aspects of the established trade and broke away to form their own brand. The more players means more competition in the sector which prides itself on a grandfather-taste which predates Starbucks and of course thirdwave.

This taste is distinct and offers amazing coffee without the bells of whistles of modern coffees. JBM (Jamaica Blue Mountain) is just layered-complexity without the hype.

So of course competition led to price cuts of between 10 to 20 per cent on shelves and on selling platforms like ebay and so on. In fact Stoneleigh actually slashed their retail rates by about 30 per cent just to move volumes. Let’s see what happens on reorders.

The context however is that coffee prices in Jamaica have started to fall back in 2016/17 based on global supply and demand factors. But now come 2019 its competition that’s driving the dip at the roasted bean level. What does this mean for consumers… more choice at cheaper prices.

But of course, we all know you can’t just buy JBM blindly.  That’s why its important to know your source. We find that all the new brands offer quality but we’d recommend getting someone whether at the brand or a broker to cup it first prior to shipment.

Cheers to great coffee!

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Jamaica Coffee Festival 2019

Ok, So there the coffee festival planned for the first weekend in March. Interested , well it depends on whether coffee is your love or your money-muse. The first day, March 1 is business Development workshops For Farmers.

Don’t let that deter you. It’s really the perfect day for overseas and locals roasters and traders who want to meet with local farmers and processors. After all we all want the access to the holy grail–Green beans. You can barter with the farmers or play hard ball with the licensed processors. Last year like this year, the farmer workshops happened in the hills of the blue mountains.

So those who need the best beans can take a visit. I doubt there’s an entrance fee like the festival itself on Saturday and Sunday at J$1,500 or about $12 USD.

 

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Marley coffee links with NFL

Marley Coffee which sells commodity and luxury Jamaica blue mountain beans will partner with The Broncos NFL team to cobrand  coffee.

“Marley Coffee is played to announce a limited edition Mile High Blend in partnership with the Denver Broncos,”  Marley tweeted.

The company which is on track to break even this fiscal year based on sustained sales growth.

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Starbucks sells jamaica coffee this month

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Starbucks started selling Jamaica Blue Mountain coffee this month at select stores in the United States.

 Starbucks will buy beans originating from Amber Estate and St  Cloud Estate in the Jamaica Blue Mountains. It will then ship, roast and bag the beans to Starbucks specifications.

The beans from Amber Estate are without doubt a superior bean. Its brews a coffee that’s heavy cacoa, gushing with lemony citrus.

Starbucks, which had stopped offering the beans for about a year in the US, sells an 8.8 oz bag for just under US$30. It describes the coffee as perfectly complex.

“This is a complex coffee with layers of citrus flavor and a hint of chocolate,” states the tweet.

On Starbucks’ official page, it indicates that its the 6th year featuring the coffee described as a “customer and partner favorite”.

“This world class coffee is always limited and we are delighted that we can enjoy it again this year,” stated

Jamaican coffee remains in short supply due to a series of natural – such as the recent drought – and man-made events.

“This coffee was grown beneath the peak of the 7,400-foot Blue Ridge. The dew, along with plentiful rainfall and fertile soil, helps create ideal growing conditions. After the harvest, each bean is scrutinized and certified to ensure nothing short of the highest quality. The result: a complex cup with layers of citrus flavor and a hint of cocoa,” Starbucks added.

Kingston Coffee Culture

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 High Grades but…

 

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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.