Sunday, April 23, 2006

The Return of Juan Valdez

The Wharton School examines the coffee wars. An excerpt:

A hidden casualty in the coffee wars has been a Colombian coffee farmer named Juan Valdez. Perhaps the world's best-known bean grower, he existed only in ads and was the fictional spokesman for the National Federation of Coffee Growers of Colombia. The group created him to promote its beans in grocery stores -- contending that they tasted better than other grocery store coffee -- and thus secure a premium price from retailers. The Federation even persuaded some retailers to put its logo -- a drawing of Juan and his mule -- on containers of coffee.
The Federation's beans "were among the first grocery-store brands that said, 'We have higher quality,'" notes marketing professor
Patti Williams. "And they had remarkably high recognition for Juan Valdez as a character. A tiny little organization developed this brand icon." But the coffee-house revolution eroded the federation's gains. Marketing by Starbucks and regional chains advanced the notion that the best coffee comes from freshly roasted and ground beans, and few grocers offer that. "Now all grocery-store coffee is viewed as bad," Williams adds.
Valdez is fighting back. He, too, has become a "barista" -- an Italian term that many coffee houses use to refer to their espresso makers. The Federation has launched Juan Valdez cafes in New York, Washington, D.C., and Seattle. The Seattle store held its grand opening April 16 and is near Starbucks' original location. But Juan Esteban Orduz, the Federation's president, told The Seattle Times that the cafes don't aim to take on the coffee-brewing behemoth. They are intended to serve, in effect, like "billboards," he says, publicizing high-quality Colombian coffee to a new generation of coffee drinkers.

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