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Colombia, land of Juan Valdez coffee, braces for Starbucks

Starbucks plans to open 50 stores in Colombia in the next few years. The Juan Valdez chain says the US giant’s arrival could actually boost consumption of coffee for them both.Alejandra Parra/Bloomberg News

BOGOTA— Here in the land of coffee, the Juan Valdez coffee chain has had it easy.

Its souvenir-filled stores number 170 nationwide. There are 68 in other countries, from Spain to the United States, where a store does business blocks from the White House. If anything, the chain named after the iconic coffee farmer — a creation of a Madison Avenue ad firm in 1959 — has faced just one big challenge: getting Colombians, accustomed to exporting their best beans, to sip white chocolate cappuccinos and iced caramel macchiatos.

But now Juan Valdez has a serious competitor: Starbucks, with 19,000 outlets in more than 60 countries. The Seattle chain, which in city after city has prompted cafes to close or remake themselves to survive, plans to open 50 stores in Colombia in the next few years.


Last week, Starbucks began scouting locales in Bogota for its first stores, set to open in mid-2014. It has more than 650 outlets in Latin America.

Juan Valdez, run by an 86-year-old federation that markets the coffee of 500,000 growers, is putting the best possible face on the challenge. Its executives hope Starbucks will boost local consumption. Smaller chains say the move will open up a market Juan Valdez dominates.

‘‘Starbucks created this concept, this business model,’’ said Hernan Mendez, president of Procafecol, created in 2002 by the Colombian Coffee Growers Federation as the parent company of Juan Valdez Cafe. ‘‘Its entry will be a challenge that will make us better..’’

Juan Valdez and Starbucks have a history. When Starbucks went public in 1992, Colombian investors rejected an invitation to invest in the growing company, said Luis Samper, a federation spokesman. When Starbucks sales slumped in 2008, then-federation head Gabriel Silva urged coffee-growing nations to buy the chain, telling El Tiempo newspaper that would ‘‘reinforce our fight to defend the origins of coffee.’’


Now, the companies will compete over a coffee frontier whose peculiarities might seem unusual to outsiders, if potentially lucrative. Colombia, with 46 million people, is far bigger than some of the countries where Starbucks operates. And it’s increasingly influential, with a rising middle class that can afford a $3 cappuccino.

But Colombians have only recently begun to enjoy the high-end, high-quality coffee brewed by baristas in New York and Rome. Colombians consume far less coffee than other top coffee-growing nations, such as Brazil. And the coffee they drink is often weak and blended with low-grade beans from Peru and Ecuador.

Mendez said one of Procafecol’s biggest problems was getting Colombians interested in, and willing to pay for, Juan Valdez’s high-end brew.

Starbucks’ chief executive, Howard Schultz, has said Starbucks won’t be selling its coffee cheaper than competitors.

Starbucks is aware of strife in the industry, and Juan Valdez hopes its entry helps matters. Heavy rain and a nasty blight known as coffee rust devastated production, leading to a three-decade low of 7.74 million sacks of coffee in 2012. Thanks to better weather and government subsidies for the planting of 2 billion rust-resistant crops, production is rising, with 10.1 million bags expected by year’s end. But global coffee prices have been plummeting since 2001, and farmers have repeatedly gone on strike this year for more subsidies.

Starbucks — long one of the biggest buyers of Colombian coffee — has promised that all of the drip, espresso, and packaged Colombian coffee it sells will be locally roasted and sourced. And it will invest $1.5 million to help teach farmers more sustainable practices.


‘‘People ask why haven’t we been in Colombia yet. We needed to find the right partners and the right time, to be respectful of communities,’’ said Rich Nelsen, general manager for Latin America.