The Critical 'I'

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Saturday, December 13, 2003

JUAN VALDEZ OPENS SHOP
grande o vente?
Counting on the unshakable caffeine addiction that most Americans cultivate, the National Federation of Coffee Growers of Columbia (take note of that URL) is getting ready for a two-pronged invasion of the United States. In addition to opening up Juan Valdez-branded coffeehouses by mid-2004, the Federation is also rolling out "Coffee Kola" and other soft-drink forms of the potent bean.

The Juan Valdez trademark, created by DDB Worldwide Marketing in 1960s, is probably most familiar from a series of television commercials featuring the character standing in American supermarket aisles. The character was suspended in 2001, after coffee bean prices dropped significantly and the federation could no longer bankroll the advertising budget for Juan Valdez.

But last summer, Juan Valdez made a comeback. The federation paid $1.5 million to buy him a cameo appearance in the Jim Carrey movie Bruce Almighty.

They're taking an interesting approach with the stores:

The stores will largely be modeled after five coffee shops that the federation is currently running in Colombia. There, they are testing product mix, pricing and the intricacies of operating a retail operation. The stores, which are relatively Spartan, serve nine different blends of coffee and are decorated in neutral browns and beiges and accented with wooden chairs that do not encourage patrons to linger. Although prices of the Colombian coffee have yet to be set for stores in the United States, [Colombian Coffee Federation president Gabriel] Silva said he expected them to be lower than those at Starbucks.

"Starbucks sells an experience," Silva said. "It's almost like a social place where you go there and meet your friends and read the paper and have some milk with coffee. They are not maximizing the potential of the pure coffee experience. Our stores are going to be much more down-to-earth -- less opportunities for social interaction. It's not going to be a gathering place, it's going to be a place to get superior coffee, the best coffee in the world."

I don't claim to know why Starbucks is such a success, but indeed, the experience they sell is why there are so damn many of them in every city across the country. It's a classic example of how the marketing does more of the selling than the actual product does. The more people hang out in the shop, the more coffee and other stuff they're going to buy. (I'm still amazed that the closest one to my house, in a non-descript strip mall location, is always full of people hanging out; it's a dump, but they still sit there for hours sipping coffee.) I think it's a bad idea for the Juan Valdez shops to go in the opposite direction. It could be that they're doing it to appease Starbucks, which is still the Columbian Federation's major customer. Still, it seems like an almost sure set-up for failure.

This is all beside the point for me. While I like caffeine as much as the next addict, I hate coffee or anything coffee-flavored. It's all tea (hot and iced) and soft drinks for me. Neither Juan Valdez nor Starbucks can deliver those.