BOGOTA, Colombia – In what represents an important step in its international expansion strategy, Juan Valdez Cafe has opened its first café in Kuwait. The store is the first of 60 the company plans to open in the Middle East and North Africa (MENA).
The café is located in the Symphony Mall on Arabian Gulf Street, part of Kuwait’s exclusive Salmiya district. Many turned out to celebrate the opening of the 100-sq meter store including Procafecol president Hernán Méndez, local dignitaries and even Juan Valdez himself.
The Kuwait store is part of the company’s aggressive MENA expansion plan. Over the next five years, Juan Valdez Cafe will open 60 stores, mainly in the Gulf States. The United Arab Emirates (UAE) will likely see the next store, as the country shows strong growth in the franchising sector.
“We are very optimistic about our presence in this new region,” said Méndez during the opening of the first Juan Valdez CAfe in the region.
“We have prepared intensely for this new phase, even bringing in Colombian experts to train local staff. We also have very committed partners that will help ensure our success.”
First Source General Trading & Contracting Co. and First Source & Family will handle franchising in 16 countries throughout MENA. The companies are part of the Kuwait-based Al Ghanim Group, which is well known for operating clothing boutiques and its extensive experience in logistics and franchising.
Juan Valdez Arrives in One of the World’s Wealthiest Regions
The Colombian coffee growers’ brand is staking its claim in a region with significant sales potential. Euromonitor currently values the MENA coffee market at more than 4 billion dollars and expects 5.5% growth between 2012 and 2017.
There is high consumption of hot drinks as coffee shops are popular social destinations in countries where people do not drink alcohol for cultural and religious reasons. Connoisseurs believe that a coffee brand such as
Juan Valdez Cafe has huge room for growth throughout MENA.
Home to 3 of the 15 richest countries in the world (after Forbes) and 6 of the 50 top countries for business (after the World Bank), MENA shows strong economic potential. The UAE is an example of the region’s high purchasing power. GDP per capita in the UAE is $49,800.
There are now 242 Juan Valdez Cafe operating around the world, including the new one in Kuwait.
The majority can be found in Latin America with 170 stores operating in 22 Colombian cities. The remaining 71 can be found in the United States, Spain, Ecuador, Chile, Mexico, Peru, Panama and Aruba.
There will be 250 Juan Valdez Cafe operating worldwide by year’s end with openings planned in other Latin American countries such as Guatemala, El Salvador, Costa Rica and Bolivia.
An inclusive business model
Juan Valdez Cafe stores and packaged products are designed to benefit Colombian coffee growers. Procafecol, the company that operates the brand, was designed as an inclusive business model where the farmers themselves actually benefit from the sale of every cup of Colombian coffee.
The Colombian Coffee Growers Federation (FNC) is Procafecol’s largest shareholder, and in addition more than 18,000 individual coffee growers have invested in Procafecol´s shares. In all, there are more than 560,000 coffee growing families represented by the FNC, and the vast majority own small coffee plantations no bigger than 1.6 hectares on average.
In addition, the business pays royalties to the National Coffee Fund (FONC) to provide support and programs to Colombian coffee growers. In the last year 2013, royalties for direct operation of the brand reached nearly US$ 4 million.
No other company in the sector allocates a comparable proportion of its income to projects that focus on sustainability of coffee cultivation.