Starbucks To Open First Stores In Colombia; Will Its ‘Aggressive Plans’ Let It Compete With Juan Valdez?

Starbucks is already the biggest buyer of Colombian coffee beans in the world, but soon Colombians will be able to get a taste of what Starbucks does with them -- and without leaving their country. Starbucks announced on Monday that it will open its first stores there, as the first step in what CEO Howard Schultz described as "aggressive plans" to expand its operations in the South American country. In five years, said Schultz, Starbucks expects to open 50 new stores in the capital of Bogota and other major cities. The move will put it in competition with Juan Valdez -- the chain which sells coffee grown by members of the National Federation of Coffee Growers which runs 225 shops in the Americas and Spain.

At a press conference at Bogota on Monday, Schultz dismissed the idea that his company would undercut his competition with an identical business model. Starbucks prices would probably be higher than those of its competition, he said, in part as a way of sustaining its "home-from-home" lounge environment. "I suspect that when we open up in Colombia, coffee consumption will go up, as has happened around the world, so I think that even Juan Valdez will benefit from our arrival," he said. And the coffee federation's press office told the Associated Press it had no fear of the new competition.

In fact, Seattle-based chain's entry into Colombia might mean good news for growers there. Schultz said that, like Juan Valdez, it would only use coffee grown in Colombia, and also announced on Monday a $3 million partnership with the U.S. Agency for International Development (USAID) to help Colombian farmers increase coffee yields and economic stability. It will be directed especially at farmers in Antioquia, Tolima, Huila and Cauca, coffee-growing areas which still suffer from ongoing conflict between the FARC and the Colombian government. USAID chief Raj Shah told NBC that the initiative hopes to reduce "extreme poverty, which is still a reality for almost all of these small-scale coffee growers that have barely one hectare (2.5 acres) of land." The news comes as Colombian coffee growers continue to stage protests to demand a renewal of government subsidies.

It isn't just within Colombia that Starbucks will boost its use of Colombian beans, either. Schultz said on Monday he had met with Colombian President Juan Manuel Santos and representatives from the coffee federation to discuss his company's plans to use 20 percent more Colombian coffee in its worldwide stores.

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