Coffee powerhouse Colombia hopes early next year to join other producers to buy an influential share in Starbucks, with Brazil and Central American growers also interested, a top coffee official told Reuters.
Colombia, the world’s No. 3 producer, has held talks with banks for
a year about a share in the U.S. giant, which would allow growers more
say in the supply chain, said Gabriel Silva, director of the National
Federation of Coffee Growers.
“There is an opportunity the crisis offers us; Starbucks’ share
value is at one of its lowest points in history,” Silva said in an
interview late on Monday. “We want to have a position of influence …
a voice sufficiently strong to be able to contribute to the development
of the company.”
Hurt by the global economic crisis and slower consumer demand for
premium coffee, Starbucks recently announced it would close down 600
stores and expected to double its cost-cutting as sales fall.
A year ago Starbucks shares were trading over $20 but now are just
below $10. Its shares were up 2.24 percent at $9.57 in early Tuesday
Silva said he hoped a Starbucks deal could be ready by the first
quarter of next year and already had offers of alliances from other
“The percentage will depend very much on the current shareholders,
I mean that we could work together,” he said. “You can have an
important presence without needing to take control or have absolute
Starbucks has been pressured this holiday season as consumers cut
back on discretionary purchases. To drum up holiday season sales it has
been offering 20 percent discounts on whole bean coffee and some other
Starbucks did not immediately return calls seeking comment on
Tuesday. But the company has responded before to initial remarks by
Silva on a possible deal.
“Starbucks has no official comment other than that we value the
relationships we have with coffee growers everywhere we buy coffee —
including those in Colombia,” a spokesperson said last week.
Silva said global coffee demand should hold through the world
economic crisis next year even though consumers may likely shift to
less costly options. He forecast a deficit of 8 million sacks of coffee
next year in the world market.
Colombia, a top supplier of high-quality arabica beans, should
produce between 11.8 million and 12 million 60-kg bags this year but
more in 2009 thanks to output from rejuvenated coffee crops, Silva
Colombia expects to increase its production to 17 million bags by 2014 with a focus on high-demand specialty coffees.
The federation said on Monday production in November had fallen 39
percent to 933,000 60-kg bags as crops were delayed by heavy rains and
the rejuvenation program took out some current output. Exports for the
month fell 15 percent to 893,000 bags versus a year ago.