Juan Valdez Café moves into Asia
Juan Valdez Café made an early entrance into the Asian market this year, with ambitious plans moving forward.
With his characteristic wide-brimmed hat, poncho, and mule in tow, few coffee mascots are as distinguishable in the industry as the Colombian Coffee Growers Federation (FNC)’s Juan Valdez.
The stereotypical South American coffee farmer recently received his fair share of attention at the opening of his newest namesake café this past May. His rugged appearance was a stark contrast to the avant-garde Dongdaemun Design Plaza mall where his first namesake shop opened in Seoul, South Korea.
The sight of the Colombian coffee farmer, however, is one that South Koreans will quickly be getting used to. Juan Valdez Café announced plans to open 150 – 300 cafés in South Korea in the next five years.
This debut in Seoul coincided with the opening of the brand’s flagship Origins café in Kuala Lumpur, Malaysia, marking a strong entrance for the Juan Valdez Café brand into Asia. A year ahead of schedule, Alejandra Londono, International Vice President of Juan Valdez Café, says that the company just couldn’t wait any longer before entering the booming Asian coffee shop chain market.
“Asia is an amazing place. Coffee consumption is rising rapidly, and there is huge potential. We thought it would be better to start here sooner rather than later,” Londono tells GCR Magazine. “Asia is going to be a great market for us.”
Indeed, Juan Valdez is not alone is eyeing emerging coffee markets in Asia as its next target for growth. It joins a growing number of foreign coffee chains looking to take advantage of the booming market.
From Starbucks, to Costa Coffee, to CBTL, Asia hasn’t been spared an onslaught of foreign brands encouraging the consumption of Western-style coffee.
Where Juan Valdez Café distinguishes itself, however, is in its strong origin branding. Rather than being just one aspect of the picture, the origin-focus is indeed its entire reason for being.
“We haven’t really seen in Asia any origin-branded coffee shops. Stores like Starbucks talk about the origins of their coffee, but the brand isn’t all about that,” says Londono. “What we’re looking to do is really teach people about Colombian Coffee.”
While it may have taken Western markets generations of coffee drinking before they started being interested in where their coffee comes from, Londono is confident that this educational approach is going to be well received in Asia.
“The majority of Asians are very open to new things. They like to try new things, and they are quite willing to learn,” she says.
Londono says that the brand will sit especially well among Millennials.
“Millennials are into origin brands, they like to know about the history of the product they are buying,” she says. “And this isn’t just the Asian market, but the entire world. With social media and the internet, this generation is really connected. People are looking for compelling stories behind a brand.”
Londono explains how Juan Valdez Café’s entrance into Asia is part of the FNC’s long-term plan to increase the value-add of Colombian coffee by entering into the coffee chain business.
“We knew that customers were paying $5 for a coffee in Manhattan. So we thought that we would take advantage and create our own brand of cafés,” says Londono.
It was a natural progression that the café would embrace the Juan Valdez brand the FNC first introduced in the 1960s. Juan Valdez embraces the stereotype of a typical Colombian coffee farmer, to represent the over half a million coffee farmers the FNC supports. Initially, his job was confined to media interviews and other publicity stints. In 2002, however, the caricature of the Colombian farmer took on a more commercial relevance as the FNC launched the Juan Valdez Café chain.
The FNC opened its first branded coffee shops in New York (United States) and Madrid (Spain). It was during these early years, that Londono says they learned the importance of working with suitable franchise partners.
“That was a very interesting process. We learned about the importance of those relationships,” says Londono.
Taking those lessons on board, they went on to successfully launch locations in throughout South America, all through the strong support of local partners.
Londono says that today they’ve narrowed down a few key elements they look for in a franchise partner. The first is a solid business plan suited for the region. Second, the partner must have access to capital to invest properly in the brand. A third point is that the FNC needs partners with experience in food and beverage.
However, beyond these main business criteria, Londono says that as an origin-focused brand, partners must have an understanding and passion for Colombian coffee.
“We need a partner who can feel connected to the coffee grower. Because at the end of the day, we are working for these growers,” says Londono. “Money you can find everywhere, but a passion for coffee growers is not as easy to find.” Before any deals are signed, Juan Valdez Café invites the prospective partner to Colombia to meet with farmers and get a feel for the origin.
The Colombian origin is perhaps most strongly represented in the Juan Valdez Café flagship store – aptly named “Origins”. While the South Korea location is a more typical coffee shop, the Kuala Lumpur store is rather special.
“It’s more of an expert, high end location,” explains Londono. At these flagship stores, expert baristas prepare not only espresso, but offer alternative brewing methods as well as food pairings with coffee.
Londono explains that the decision to open a flagship store versus a traditional chain store centres on the availability of the location. She says that they were lucky in Malaysia to have found a well-sized location to make their debut, and they’ll be looking for the same in South Korea in the near future.
Juan Valdez Café’s expansion strategy seems to have worked so far. There are currently 267 coffee shops worldwide, and over the past 12 years, Juan Valdez Café has paid over US$20 million in royalties back to the farmers. With plans to almost double that number in South Korea alone, added to multi-fold increases in other markets in Europe and the Middle East, Londono is confident that their ambitious expansion plans are set to pay off even more. “This will be a fantastic market for Colombian coffee,” she says.