GCR linkedin Logo

Taking on trust

From the August 2018 issue.

After more than 50 years in Asia, the Colombian Coffee Growers Federation knows the importance of building trusting relationships.

In the early 1960s, the Colombian Coffee Growers Federation (FNC) took a gamble on its visionary belief that coffee consumption would grow in Asia, a region where tea was then the favoured beverage and coffee drinking an anomaly.

That gamble paid off handsomely as, just over a half century later, around 30 per cent of the FNC’s total sales are made in Asia.

The FNC leaders also understood that establishing long-term relationships and trust were the key to success in Asian markets, so there was a need to establish an office to directly interact with the key companies and industry leaders, says Santiago Pardo, Director for Asia for the FNC.

“The FNC representation in Asia was established in 1962 in Tokyo, Japan, and nowadays Colombian coffee has a paramount place in coffee consumption in the region, and is well recognised by consumers,” Pardo says.

From that office in Tokyo, the FNC coordinated the marketing and sales of Colombian coffee in many other Asian countries.

Given the rapid economic growth of China, with the consequent increase in the average income of its citizens, the FNC decided to also establish an office there in 2006. There are no plans at present for other FNC offices in Asia, but the Federation participates in trade shows and other marketing activities throughout Asia and Oceania.

The main market for the FNC in Asia is still Japan, followed by South Korea and China, but there are also sales to many other countries in Asia-Pacific, Pardo says. The products provided are standard and specialty coffee green beans, instant coffee and coffee extract sold by Buencafe. Procafecol, an FNC-controlled company is selling coffee products under the Juan Valdez brand, and also starting to establish Juan Valdez coffee shops in the region.

“China and South Korea are growing fast for FNC sales with important figures in volume and value,” Pardo says. “Sales in other markets such as Indonesia and Malaysia are also growing, even though the base is still low.”

FNC expects its sales in Asia-Pacific to continue to grow steadily in the coming years, even in mature countries such as Japan, but especially in South Korea, China, and Australia, among others.

Asian countries demand high-quality coffees, Pardo says, and Colombia has the advantage of already being recognised by the industry and consumers.

New consumption opportunities such as fresh-brewed coffee in convenience stores and innovative ready-to-drink (RTD) products are also expected to positively impact on demand for Colombian Coffee in the region, he says.

Market research company Euromonitor International reported in September 2017 that the Asia-Pacific is the key region for RTD coffee globally, accounting for more than 80 per cent of worldwide sales.

Pardo says that in addition to the growth in coffee consumption in Asia, the industry and consumers are increasingly interested in the sustainability of the coffee sector.

“The FNC has been a leading organisation promoting the sustainability of coffee growers and coffee production,” he says. “The FNC has in fact set the goal that all Colombian coffee will be sustainable by 2027, when the organisation will become 100 years old.”

The key for the success of the FNC in Asia has been working continuously alongside its partners and clients for decades, Pardo says.

“The Federation is regarded in Asia as a trustworthy organisation that has achieved the recognition of Colombian coffee in different markets and at the same time has benefited Colombian coffee growers.”

  • GCR Newsletter

    Sign up now to Global Coffee Report's newsletter and keep up to date with everything coffee.

© Copyright 2018 Prime Creative Media Pty Ltd. All rights reserved.

ABN: 51 127 239 212

X