Tweet
Trinidad enters Jamaica's coffee market
Steven Jackson
Wednesday, October 14, 2009
Trinidad & Tobago-based Rituals Coffee will set up two cafes in Jamaica augmenting its over 90 regional outlets, but local operators want similar access to Trinidad's market.
The Kim Clarke-led Maritime and Services Limited (MSL) has obtained the franchise for Jamaica. They will open their Kingston store in the bustling Village Plaza, and sources say the second store will be in Montego Bay. Written and verbal queries to MSL and also Rituals head office went unanswered up to print time.
"I don't think Trinidad should be able to tell us about coffee," said locally based Cannonball owner Tara Abrahams-Clivio while cautiously welcoming her competitor. "I respect the competition, but why did a local company buy a Trinidadian coffee franchise instead of buying a Jamaican brand."
Rituals, started in 2003 and arguably modelled off US-owned Starbucks chain, already has cafes in Trinidad and St Maarten and plans to enter 12 other regional markets.
Abrahams-Clivio hopes that Rituals will sell Jamaican coffee and avoid imported or instant blends.
"Jamaican coffee is the equivalent of (triple gold medallist) Usain Bolt and we should support that," she noted. Jamaican coffee costs up to 12 times that of rival beans sold on the commodities exchange in New York and London.
"I am a firm believer in the free market," voiced Richard Hall, operator of Jamaican-based Cafe Blue, who expects reciprocity. "I don't see a problem with them coming to Jamaica as long as all the legal requirements were met. In the same way that I expect Cafe Blue to one day go to Trinidad and have access to that market."
Hall confessed that Rituals will force his company to guard its market share. Cafe Blue operates three cafes and last year announced ambitious plans to expand its outlets to 15 within three years but "the economic downturn has changed those plans".
Jamaica's trade deficit with Trinidad is in part due to market barriers, according to Jamaica's trade minister Karl Samuda. Specifically, in June he blasted Trinidad for erecting trade barriers against a shipment of Jamaican beef patties, which were denied entry for several weeks.
Rituals will become the 15th cafe or equivalent in the capital city including: three Cannonball cafes; two Cafe Blue, two Susie's, a Coffee Mill, Jablum (Norman Manley Airport); Häagen-Dazs. Also cafes exist in the Half-Way-Tree Transport Centre, the Hilton and Pegasus hotels and the National Gallery of Jamaica. Most were opened within the last five years.
Coffee is currently the island's best export growth performer, earning US$19.3 million over five months to May - up 31 per cent over last year amidst a 50 per cent decline of the nation's total exports, according to Bank of Jamaica trade statistics.
Though the earnings have increased, the crop still under-performs. Some 90 per cent of the beans are exported to Japan which forgoes value-added earnings as cafe beverages. Last year, Patrick Sibblies, who operates Coffee Mill in Kingston, said he planned to change this by opening his second cafe in China at a cost of some US$140,000. The Business Observer up to print time was unable to ascertain whether these plans had materialised.
Sibblies at the same time was sceptical that Cafe Blue would not attain its growth target. "Mouth mek fi talk," he said hinting that Jamaica's gourmet coffee culture was still only in its infancy.
Sibblies started his first cafe in the 70s, and had shops in both major airports (one is now closed) and another in New Kingston. Sibblies said that the cafe market is much larger than it was a decade ago. His first Chinese cafe, opened in 2006, was doing reasonably well, but he views it as a learning experience. He is also a big coffee producer and exporter.
But Sibblies was not the only cafe owner looking to expand overseas. Susie Hanna, head of upscale coffee café Susie's, was actively looking to franchise her operations in the Anglophone and Francophone Caribbean.
Hanna opened her coffeeshop in 1996. It will cost investors up to $20 million to use the Susie brand. According to Hanna, when she started out, the concept of a cappuccino sounded more like a designer label than a drink.
"People said that I was crazy, that we don't drink coffee in Jamaica we drink tea," she said. "Now the size of the coffee as a portion of sales has increased a lot."
The growth of the coffee market is influenced by Starbucks whose appeal is filtering to Jamaica.
Starbucks is a Fortune 100 company with over 11,000 stores. It began in 1971, opening its first store in Seattle; now there is even a store close to the Great Wall of China.
Starbucks is credited with introducing the Italian gourmet coffee culture into the US. In the process it also transformed the potential of a coffee cafe from a mom and pop coffee store into a transnational brand - changing US lifestyle in the process. It has made some US$10 billion since the start of the year.
Local and regional cafes are copying aspects of the Starbucks model in an attempt to build their own brands.
Like Starbucks they see coffee as black gold, offering them an opportunity to grow the market from scratch - in the same way that bottled water companies did at the turn of the millennium.
In the last couple of years, these investors have turned that concept into reality, at least amongst the elite. Now, they want mass appeal, which includes offering sweet coffee drinks similar to milk shakes.
Nestlé has done it via its popular Nescafe coffee dispensers. Häagen-Dazs offers a sweet ice coffee drink. And last year, Devon House Ice Cream was inclined to set up a coffee beverage (machine) in its stores.
Across from the ice-cream shop was WhatsonCafe. Manager Susan Couch said that the cafe was profitable but they had a fall-out with the new executive director of Devon House, Carole Fullerton.
Ice coffee, lattes, cappuccinos, etc have a price range of $120-700 at these cafes. But shop-by-shop, these local and now regional cafes are building a gourmet culture that never existed in Jamaica, a country ironically renowned for its coffee.
Steven Jackson
Wednesday, October 14, 2009
Trinidad & Tobago-based Rituals Coffee will set up two cafes in Jamaica augmenting its over 90 regional outlets, but local operators want similar access to Trinidad's market.
The Kim Clarke-led Maritime and Services Limited (MSL) has obtained the franchise for Jamaica. They will open their Kingston store in the bustling Village Plaza, and sources say the second store will be in Montego Bay. Written and verbal queries to MSL and also Rituals head office went unanswered up to print time.
"I don't think Trinidad should be able to tell us about coffee," said locally based Cannonball owner Tara Abrahams-Clivio while cautiously welcoming her competitor. "I respect the competition, but why did a local company buy a Trinidadian coffee franchise instead of buying a Jamaican brand."
Rituals, started in 2003 and arguably modelled off US-owned Starbucks chain, already has cafes in Trinidad and St Maarten and plans to enter 12 other regional markets.
Abrahams-Clivio hopes that Rituals will sell Jamaican coffee and avoid imported or instant blends.
"Jamaican coffee is the equivalent of (triple gold medallist) Usain Bolt and we should support that," she noted. Jamaican coffee costs up to 12 times that of rival beans sold on the commodities exchange in New York and London.
"I am a firm believer in the free market," voiced Richard Hall, operator of Jamaican-based Cafe Blue, who expects reciprocity. "I don't see a problem with them coming to Jamaica as long as all the legal requirements were met. In the same way that I expect Cafe Blue to one day go to Trinidad and have access to that market."
Hall confessed that Rituals will force his company to guard its market share. Cafe Blue operates three cafes and last year announced ambitious plans to expand its outlets to 15 within three years but "the economic downturn has changed those plans".
Jamaica's trade deficit with Trinidad is in part due to market barriers, according to Jamaica's trade minister Karl Samuda. Specifically, in June he blasted Trinidad for erecting trade barriers against a shipment of Jamaican beef patties, which were denied entry for several weeks.
Rituals will become the 15th cafe or equivalent in the capital city including: three Cannonball cafes; two Cafe Blue, two Susie's, a Coffee Mill, Jablum (Norman Manley Airport); Häagen-Dazs. Also cafes exist in the Half-Way-Tree Transport Centre, the Hilton and Pegasus hotels and the National Gallery of Jamaica. Most were opened within the last five years.
Coffee is currently the island's best export growth performer, earning US$19.3 million over five months to May - up 31 per cent over last year amidst a 50 per cent decline of the nation's total exports, according to Bank of Jamaica trade statistics.
Though the earnings have increased, the crop still under-performs. Some 90 per cent of the beans are exported to Japan which forgoes value-added earnings as cafe beverages. Last year, Patrick Sibblies, who operates Coffee Mill in Kingston, said he planned to change this by opening his second cafe in China at a cost of some US$140,000. The Business Observer up to print time was unable to ascertain whether these plans had materialised.
Sibblies at the same time was sceptical that Cafe Blue would not attain its growth target. "Mouth mek fi talk," he said hinting that Jamaica's gourmet coffee culture was still only in its infancy.
Sibblies started his first cafe in the 70s, and had shops in both major airports (one is now closed) and another in New Kingston. Sibblies said that the cafe market is much larger than it was a decade ago. His first Chinese cafe, opened in 2006, was doing reasonably well, but he views it as a learning experience. He is also a big coffee producer and exporter.
But Sibblies was not the only cafe owner looking to expand overseas. Susie Hanna, head of upscale coffee café Susie's, was actively looking to franchise her operations in the Anglophone and Francophone Caribbean.
Hanna opened her coffeeshop in 1996. It will cost investors up to $20 million to use the Susie brand. According to Hanna, when she started out, the concept of a cappuccino sounded more like a designer label than a drink.
"People said that I was crazy, that we don't drink coffee in Jamaica we drink tea," she said. "Now the size of the coffee as a portion of sales has increased a lot."
The growth of the coffee market is influenced by Starbucks whose appeal is filtering to Jamaica.
Starbucks is a Fortune 100 company with over 11,000 stores. It began in 1971, opening its first store in Seattle; now there is even a store close to the Great Wall of China.
Starbucks is credited with introducing the Italian gourmet coffee culture into the US. In the process it also transformed the potential of a coffee cafe from a mom and pop coffee store into a transnational brand - changing US lifestyle in the process. It has made some US$10 billion since the start of the year.
Local and regional cafes are copying aspects of the Starbucks model in an attempt to build their own brands.
Like Starbucks they see coffee as black gold, offering them an opportunity to grow the market from scratch - in the same way that bottled water companies did at the turn of the millennium.
In the last couple of years, these investors have turned that concept into reality, at least amongst the elite. Now, they want mass appeal, which includes offering sweet coffee drinks similar to milk shakes.
Nestlé has done it via its popular Nescafe coffee dispensers. Häagen-Dazs offers a sweet ice coffee drink. And last year, Devon House Ice Cream was inclined to set up a coffee beverage (machine) in its stores.
Across from the ice-cream shop was WhatsonCafe. Manager Susan Couch said that the cafe was profitable but they had a fall-out with the new executive director of Devon House, Carole Fullerton.
Ice coffee, lattes, cappuccinos, etc have a price range of $120-700 at these cafes. But shop-by-shop, these local and now regional cafes are building a gourmet culture that never existed in Jamaica, a country ironically renowned for its coffee.
Comment