Coca-Cola FoodService Partners with Juan Valdez
Posted by TheShot on 20 May 2007 | Tagged as: Beans, Machine, Restaurant Coffee
We’ve been monitoring Coca-Cola’s murky interests in the coffee business for some time now. The most obvious example being their patent filings in recent years, which have lead to — among other things — their launch of Far Coast coffee pod and machine systems for food service retailers.
In today’s news, Coke announced they will be offering restaurant operators a liquid coffee system — an on-demand, “shelf stable, bag-in-box” coffee made from concentrate — called The Juan Valdez Coffee System: BREAKING NEWS: Coca-Cola FoodService Partners with Juan Valdez - Restaurant News - QSR Magazine. The latest incarnation of Juan Valdez was apparently out in promotional force for it at the National Restaurant Association Restaurant, Hotel-Motel Show today in Chicago.
According to the Cokesters, the system “will use Juan Valdez caféREALE coffee—a shelf-stable coffee concentrate that can be stored at room temperature for up to nine months.” Move over, Folgers — doesn’t that just call out, “the best part of waking up is a shelf stable, bag-in-box concentrate in your cup”?
It appears Coke’s strategy is to lay claim to a chasm-crossing beachhead — their Omaha Beach or Anzio if you will — securing some footing in the restaurant coffee business. And they are making their assault on multiple fronts — Juan Valdez branding being just their latest tactic. This also presents a branding oddity for the National Federation of Coffee Growers in Colombia, which has opened retail coffee shops under the Juan Valdez name in a few U.S. locations. However, the Juanistas may feel they can avoid brand confusion because their Coke deal markets to restaurateurs and their cafés market directly to consumers.
UPDATE: May 21, 2007
Coca-Cola’s Juan Valdez system now has something in common with what rugged outdoorsmen drink for caffeine while writing their manifestos at their wilderness compounds: The Food Network’s ‘Unwrapped’ to feature Java Juice(R) Liquid Coffee Extract - Food & Beverages News from Send2Press Newswire Mon, 21 May 2007. There’s no denying it — shelf-stable liquid coffee extracts are all the rage!
UPDATE: May 30, 2007
The Latin Business Chronicle published an article on Columbia’s coffee export struggles in the face of competition from the likes of Vietnam and other parts of Asia: Latin Business Chronicle - Made in Colombia: Coffee. Moves like Colombia’s “shelf stable, bag-in-box” coffee partnership with Coke may actually harm a lot more than they help. Once the esteem of Colombia’s exports are brought down to the level of “coffee extract syrup”, Vietnamese production will massacre them on volume and cost.
3 Comments »
on 29 May 2007 at 12:15 pm -05:00T 1.Espresso News and Reviews - TheShot.coffeeratings.com » Self-heating coffee launched in Australia said …
[...] In case liquid coffee extracts didn’t whet your coffee appetite. maybe instant self-heating coffee in a can will: Self-heating coffee launched in Australia > FOODweek Online > Main Features Page. [...]
on 02 Jul 2007 at 9:38 am -05:00T 2.Lee said …
Those disparaging the Juan Valdez coffee (made from extract) that Coca-Cola is going to market obviously haven’t taken the time to taste it.
It was introduced at the National Restaurant Association show in Chicago, and I was among the hundreds who met Juan and sampled the coffee . . . it was good, very good actually — full-bodied, with pleasing aroma and a smooth finish. Perhaps not the exceptional cup that barista snobs look for, but certainly much better than the typical coffee one gets on-the-go in foodservice.
The Colombian Coffee leaders would not risk their brand equity and reputation if they had not fully evaluated the quality standard of this brewing process. As for the thought of Vietnam Robusta surpassing Colombian Arabica — please. The market segments according to demand, and there will always be demand for better quality. Value is a relative perception, not driven just by a mass produced, low-cost alternative.
on 02 Jul 2007 at 10:41 am -05:00T 3.TheShot said …
Thanks for posting, Lee. I confess to never having sampled Coke’s bag-in-box coffee from extract.
But Colombian growers have to make a choice like anybody else with a product: deep down, are they a quality play or a quantity play? Going for both ends of the market at the same time is a recipe for failure, because finely-tuned competitors will ensure they cannot effectively fight a branding war on both fronts simultaneously.
The bag-in-box, coffee extract, Coke-distribution approach is not a quality play — especially when consumers have an ever-growing supply of coffee made from fresh bean stocks at the quality end.
So as a quantity play, they are going to butt up against the likes of the Vietnamese robusta growers. Because making cost-effective, flavorful coffee extracts is not going to require top-quality beans. This is coffee’s equivalent of Wolfgang Puck-branded frozen burritos: they do more to tarnish Puck’s image of quality than to elevate the frozen burrito.
Colombian growers seem to want to have it both ways. And the market inevitably proves that you can’t.