Starbucks Spreads Across Latin America

Thursday, February 13, 2014 - 14:30

As the Seattle-based coffee industry giant opens up cafes across the globe, the Starbucks franchise has begun to turn its gaze towards its roots: Latin America. Starbucks has been buying beans from countries such as Costa Rica and Colombia for decades. Only recently, the company has decided to sell these nations the product of its own coffee bean industry in the form of $2.40 espressos. In countries where rich slow-dripped chorreado coffee has been the tradition for years, Starbucks is attempting to discover new markets of out-of-home coffee consumers.

In Costa Rica, Starbucks has set up shop in several affluent suburbs of the capital, San José. Although some appreciate the variety that the shops offer, others think that the drinks do not exemplify the high quality of Costa Rican coffee. In markets such as this, some think that the famed green and white mermaid logo simply serves as a status symbol. The company sees the Latin American market as both an opportunity and a challenge. This region is known for consuming less coffee than U.S. and European consumers, preferring less expensive coffee consumption at home.

Starbucks also faces competition with small, boutique coffee shops. One of these owners and international barista competitor, Manuel Dinarte, points out the absurdity of Starbuck’s success in Costa Rica. He asks, “How is it possible that they’re selling us our own coffee at five times the price?” The grande-skinny-soy-mocha-java-chip-frappuccino-selling chain hopes that wealthy Latin Americans who emulate the United States culture will begin to frequent their shops.

Cliff Burrows, who heads Starbucks’ retail operations in the western hemisphere, claims that the company is helping boost the sophistication of Latin American customers by bringing them coffee from other exotic locations. He states that the internet friendly cafés are attracting a younger generation. The company has succeeded in some countries such as Argentina and Brazil, the latter of which has recently become one of the world’s largest coffee consumers. Brazil now hosts 74 Starbucks locations. The company operates in 11 different Latin American countries, with 725 stores throughout the region.

Starbucks also sees Colombia as a place where it may thrive. Here it plans to roast and package the coffee locally for the first time in Latin America. The company will also have to fend off small chains that offer community friendly environments and have had partnerships with local coffee growers for years. The menus at these new locations would also be slightly americanized, boasting pastries imported from the United States. However, the Costa Rican price of a US$2.40 Starbucks espresso is costlier than it is in the U.S. and may be unaffordable for many Costa Ricans.

Despite challenges that the company may face in Latin American markets, Burrows confidently claims, “Over time, the appeal broadens.” As Starbucks continues to expand across Latin America, the company will have to hope that its potential consumers are willing to relinquish their homely mugs of carefully prepared chorreado coffee in exchange for siren-crested disposable cups filled with the american-prepared version of their beans.

 

About Author(s)

Madeline Townsend
Madeline is a senior at the University of Pittsburgh. She is pursuing a degree in Spanish and Global Studies, with a focus on the Latin American region. She plans to present an honors thesis on visual representations of the internal conflict that occurred in Peru between 1980 and 2000. She also studies Portuguese and Film Studies as minors and works as one of the Panoramas interns.