Scoot Over, Starbucks

By Julie Rawe

A Colombian uprising is scheduled to kick off this week in Washington amid a clattering of coffee cups and trays of Latin-fusion hors d'oeuvres. Diplomats and policy wonks will be able to get their picture taken with the leader of this urbane revolution, a capitalist Che Guevara literally rolling out the red carpet for his U.S. invasion. This glitzy cafe opening seems an odd counterpoint to the poncho-clad Juan Valdez and his trusty mule Conchita, but the advertising icon needs all the fanfare he can muster for his daunting new mission: to make Colombian coffee hip enough for the Starbucks generation to start caring about his hills of beans.

Juan Valdez, the fictitious coffee grower created in 1959 to help put Colombian coffee on the map, is trying to spiff up his image. In the face of dirt-cheap international wholesale prices and consumers' increasingly gourmet taste, the National Federation of Coffee Growers of Colombia is hoping to cash in on the Starbucks phenomenon with a five-year, $75 million marketing campaign to reposition its coffee as an upscale brand. While still supplying such supermarket stalwarts as Maxwell House and Folgers, the Colombian coffee industry is struggling to make itself relevant to younger generations of consumers who pooh-pooh any coffee that comes in a can--unless, of course, it's a pop-top Starbucks DoubleShot espresso.

As part of the campaign to tap into the $9 billion specialty-coffee market, the federation is opening a chain of posh Juan Valdez cafes, complete with porcelain cups, comfy chairs and knock-off Frappuccinos. Two weeks after the Washington cafe opens, the President of Colombia will preside over a similar gala at Juan's flagship store in Manhattan. And this fall Target will start stocking single-serve Juan Valdez coffee machines to help consumers replicate cafe quality at home. "Even the average consumer is requesting much better coffee quality and in plain-vanilla places like a burger joint or a doughnut shop," says federation CEO Gabriel Silva.

To make Juan hip, the Colombians have hired a crack team of advertising veterans from New York City--based Sawyer Miller--the same people who helped pork become synonymous with "the other white meat." The group has created sophisticated black-and-white magazine ads that direct readers to the sleek new friendsofjuan.com which gives tips on how to brew the perfect cup and offers free samples of Colombian coffee. At the same time, high-rent entertainment p.r. firm Rogers & Cowan managed to work Juan's logo into the final season of Friends and finagled an invitation for the mustachioed coffee grower to HBO's Emmy Awards after-party this week. It's a surprisingly slick strategy for the socialist-minded, nonprofit federation, which for decades has used the proceeds from its coffee sales to build roads, schools and health clinics in coffee-growing regions.

A dozen Juan Valdez cafes are open in Colombia, with plans for as many as 300 worldwide by 2007. The federation has even created a private company to run the coffee-shop business, with an IPO on the horizon. (The federation's egalitarian goal: to have each member of the growers' cooperative receive at least one share.) Still, Starbucks, with some 8,300 outlets standing, should hardly be shaking in its boots.

The real goal is to revitalize the perception of Colombian coffee. Labels on some Juan Valdez products note that the beans are "the primary source of income for more than 500,000 peasant families in Colombia." The U.S. cafes will stress the chain's vertical integration "from the tree to the cup." That altruistic spin could play well in a marketplace where do-gooder brands like Green Mountain and Equal Exchange have captured consumers' attention--and dollars.

The tough question for the Colombians: Will going high and low end work simultaneously? They want coffee sophisticates to be attracted to their cafes. But they also want the broad masses to buy co-branded Colombian coffee in the supermarket. "The key with rebranding," says Mindy Sabella, chief marketing officer at brand-strategy firm Addison, "is you can't occupy two positions at the same time." Despite the cafe initiative, the only place most of us will encounter a Juan Valdez logo is on a coffee can.