Juan Valdez chain may slow expansion

Colombia’s Juan Valdez coffee chain is evaluating slowing down its planned store openings next year as a result of the global financial crisis, a top industry official said on Thursday.

Procafecol, a unit of the Colombian coffee federation, initially forecast it would reach 170 Juan Valdez coffee shops by 2010 in Colombia and around the world, up from the current 150 stores it operates.

“The expansion pace has decelerated because of the crisis,” Catalina Crane, president Procafecol, or Promotora de Cafe de Colombia. “It really depends on whether we decide to expand to new countries, but it won’t be at the accelerated pace of previous years.”

Speaking at a store opening in Bogota, Crane referred to the rapid expansion during 2006 and 2007 when Procafecol more than doubled the number of shops to 125 at the end 2007 from 57 stores in 2006.

The Juan Valdez chain, famous for its symbol of a Colombian coffee farmer and his mule, has 120 coffee shops throughout Colombia, the world’s No. 3 coffee producer, eight in the United States, 10 in Ecuador, 10 in Chile and the remaining stores in Spain.

In the U.S., Crane said she sees more opportunities opening coffee shops in airports and Procafecol is also banking on the growth of Juan Valdez sales at supermarkets to offset the business decline at U.S. shops.

“The niche of premium coffee in supermarkets is growing very positively,” she said noting that coffee consumption in the U.S. has increased more rapidly at home than at shops.

Juan Valdez coffee is sold at Wal-Mart Stores Inc (), the world’s biggest retailer and supermarket chains Big Y and Giant among others.

Procafecol is negotiating with other supermarkets in the U.S. to start selling its Colombian coffee, Crane said, though she declined to give names.

“Currently more 1,300 supermarkets in the U.S. sell Juan Valdez coffee… we are currently negotiating to have more presence in other supermarkets,” she added.

In a bid to increase local consumption of specialty coffees, Procafecol on Thursday announced an agreement with Colombian ice cream maker Popsy to sell coffee ice cream and coffee deserts at Juan Valdez shops and at supermarkets.

Colombians consume 1.8 kilograms of coffee per year, sharply lower than the 5.6 kilograms per year in Brazil. But local intake is higher than the 1.5 kilograms year consumed when Juan Valdez shops did not exist. (Diana Delgado, Reuters)

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