Starbucks Jamaica to follow Colombia’s lead

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.”

Jamaica coffee seeks new market in Asia

coffee plants

Industry players are again contemplating sending green or unroasted beans to China in an effort to offset reduced demand in Japan, the largest buying market for Jamaica Blue Mountain (JBM) coffee.

The source indicates that its a real possibility despite concerns about the Chinese market and the potential for unauthorised blending of beans.

“We have to try something,” added the source.

In 2011, the Coffee Industry of Jamaica (CIB) sent its first shipment of green beans to China. The CIB sent representatives to live in the country in order to streamline the supply chain. The deal signed with Zhejiang Dunn’s River Import and Export Company Limited, would handle the commercial transactions of the Hangzhou Coffee and Western Foods. The deal was met with ambivalence from some Japanese buyers who questioned the price at which the beans were sold to China. The deal with the major importer wasn’t continued after the initial two year attempt. But with the softening of the Japanese market the search for new markets are inevitable.As the industry can no longer avoid the world’s second largest economy.

Coffee commodity prices rocket 60% since Ukraine Crisis

coffee chart

Good coffee costs up to US$8 a cup in Eastern Europe. Among the most expensive globally. So the fact that Russians and Ukrainians flock for bargain  luxury coffee deals online is logical.

Nothing like the chocolatey aroma and lemon hints aroma of a balanced Blue Mountain cup to warm the bitter winter. Even better when a cup effectively costs US$3 because it eliminated the middle-man.

But what becomes illogical is enjoying coffee in conflict.

Putin’s intervention influenced a spike in  global oil prices–the most traded commodity. It increased some 10 per cent February to March to US$104 a barrel (amid fears oil rich Russia would plug gas and oil pipelines running through Ukraine).

However the second most traded commodity–coffee also saw a rise during the same period (February to March) albeit a much higher spike up nearly 2/3rds from  120 to 196.  Its blamed on drought in Brazil among the largest coffee producing nations.

It however is happening amid the heightened Ukraine conflict. It will no doubt result in a more expensive cup of coffee for this region.

Despite this impact–the true tragedy is death and conflict and not the cost of a caffeine fix.

Jamaica will import coffee

The coffee nation of Jamaica will hike imports amidst slashing its local production by nearly half to 20-year lows.
Consequently, Government aims to formulate a coffee importation policy.
“Its a troubling situation,” said John Minott, president of the Jamaica Coffee Growers Association, (JCGA) at the Coffee Industry Stakeholders Retreat on the weekend at the Jamaica Conference Centre in Kingston.
Rust disease, hurricanes and the abandonment of farms has reduced available trees and therefore production since the onset of the Western financial crisis in 2008.
“It’s not something that the JCGA is trying to promote but the stark reality is that today…we have to import coffee for certain segments of the market.”
Minott argued for an importation window during which replanting should occur.
Coffee imports hit some US$1.78 million in 2012 up some 23 per cent since 2008, according to data from the International Trade Centre (ITC) a joint agency of the World Trade Organisation and the United Nations.
Contrastingly, exports dipped by double-digit levels to some US$17.3 million in 2012, according to the latest Bank of Jamaica data. But the crop traditionally earned about US$25 million annually up to the onset of the financial crisis.

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