Thursday 24 June 2021

More Competition in Gourment Coffee in Costa Rica

Between 15% and 19% of nationally produced coffee (about 250,000 quintals or sacs of 46 kg) is destined for internal consumption. This volume joins increasing imports of grain products (without roasting or grinding) in recent years.

The market of fine or “gourmet” coffee is the one that is most generated new brands and competitors in Costa Rica, although it represents only about 4% of the total consumption of the country.

Starbucks brand coffee is already on sale in Walmart and Másxmenos supermarkets in Costa Rica, ground and packed, distributed by Nestlé. Photo: Courtesy of Nestlé

The launch of the Starbucks brand to supermarkets is another step in this direction. The company is adding different products of roasted and ground coffee and in capsules.

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The products that will be marketed initially in the Walmart and Másxmenos stored, distributed by Nestlé, which bought the retail distribution of Starbucks products globally.

José Manuel Hernando, president of the Cámara Nacional de Tostadores de Café  (National Chamber of Coffee Roasters), explained that companies affiliated with that organization also have presentations of the highest quality segment, as part of their market strategies.

The toaster entrepreneur and industry leader said that traditionally, when international grain prices are low, industrialists launch new brands, particularly quality, in search of placing the product in the local market. When the rebound in external price returns, some ways cease to circulate in local commerce, he recalled.

Hersel Orozco, partner and manager of Alimentos y Bebidas Regionales SA, explained that to La Nacion that “… three things call attention to the entry of Starbucks. The first is that the international prestige of the brand increases consumption per person in the country, the second is that they are aimed at a market with a lot of purchasing power, and third, that they bet very aggressively on a small country.”

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Regarding the behavior of coffee consumption at the local level, Orozco added that “… stagnated, especially due to the economic situation. For this reason, the same cake should be distributed among more actors, with more competition in the most part fine”.

In mid-October it was also reported that Walmart began marketing high-quality coffee in the country under the Great Value brand, owned by Walmart.

The Walmart bean is of Costa Rican origin (with grains from Tres Ríos, Naranjo and Tarrazú) while the Starbucks brands distributed by Nestlé are of diverse origins, packed in the United States, with 100% Arabica coffee.

The National Chamber of Coffee Roasters has 22 companies are affiliated, which represent around 90% of the demand. Hernando explained the Chamber has about 60 brands in the market, but if they are broken down by sub-brands, roasts and areas of origin, the number is more than 110.

Presenting its incursion into the Costa Rican retail market with Starbucks, Nestlé said it is based on notable consumption figures for ground coffee in Costa Rica.

For example, according to Nielsen, a global leader in consumption measurement, Costa Ricans (Ticos) buy 43% of roasted and ground coffee sold in the Central American region.

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Also, a study by Nestlé Central America found that almost 30% of Costa Rican households buy roasted and ground coffee twice a week, that 76% of Ticos consume coffee at home and that nine out of 10 prefer to prepare it to their liking.

The consumption per person of coffee in Costa Rica is 4.3 kilos per year, making the country the second among the producing countries in this indicator, only behind Brazil with 6.3 kilos per person per year.

For Costa Rica, the figure is a slight increase compared to the 4.1 kilos of 2017, down from a high of 5.2 kilos per person per year in 2016.

On a global scale, the largest consumer per person per year is Finland, with 12 kilos, according to figures from the International Coffee Organization (ICO).

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FACT CHECK:
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"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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