Blue Mountain coffee campaign a big success, says Starbucks

International coffeehouse giant reports several sell-outs of Jamaican coffee brand

By Steven Jackson

Sunday, September 05, 2010

US-based coffeehouse chain Starbucks said its Jamaica Blue Mountain Coffee campaign was a hit with "enthusiastic" sales.

It comes amidst the Jamaican government's plan to augment declining sales in Japan, the island's major coffee market.

"We received an enthusiastic response from both customers and partners and we are very pleased with the results of the campaign," stated Starbucks media relations in response to Sunday Finance queries, without disclosing figures.

"Anecdotally, I can share with you that several stores sold out of the coffee before the end of the promotion," added the internationally renowned firm, which operates 16,700 stores globally.

Between June to August 30, Starbucks offered for sale Jamaica Blue Mountain Coffee, which it called "one of the most exotic and legendary coffees in the world". Starbucks however will replace the promotion with Galápagos San Cristóbal coffee as part of its offerings of exquisite and sophisticated coffees around the world. The Galápagos Islands are off the coast of Ecuador.

"At this time we do not have any plans to continue to offer Jamaica Blue Mountain coffee. We are constantly looking for ways to enhance the customer experience and are building on what we've learned from our customers and partners," stated Starbucks.

Starbucks sold Jamaica Blue Mountain for US$40 per half-pound, and US$5 per cup. It offered the coffee at some 50 stores in the US, including Boston, Chicago, Los Angeles, Miami, New York, Portland, San Francisco and Seattle.

Starbucks defended the price, stating that the Jamaica coffee was rare and in high demand.

"Jamaica Blue Mountain coffee is rare and available in limited quantities that demands a higher price to Starbucks and our customers. Strict quality control is done through the Jamaica Coffee Industry Board, where green coffee is rigourously inspected before export," it stated about that coffee grown by farmers in the Blue Mountain regions of Jamaica including St Andrew, St Thomas and Portland at elevations up to 5,000 feet.

The Starbucks deal was the result of a memorandum of understanding between Starbucks and the Jamaica coffee regulator--the Coffee Industry Board.

For 2011, Starbucks plans to open approximately 500 net new stores globally, 100 of which in the US. The company is also targeting single-digit revenue growth driven by single-digit comparable store sales growth, according to posting in its most recent financials. The company expects EPS of $1.36 to $1.41, reflecting 15 per cent to 20 per cent growth over fiscal 2010.

The Jamaican government in July also signed a US$1.7-million (J$147,900,000) deal to supply 7300 kilograms of Blue Mountain Coffee to China over two years. Agriculture Minister Dr Christopher Tufton inked a Memorandum of Understanding (MOU) with representatives of the Hangzhou City Coffee and Western Cuisine Association (WCA), two Chinese organisations which will market the product in over 800 outlets in the eastern country.

Latest data indicates that Jamaica earned US$10 million ($856 million) from coffee exports up to June reflecting a 58 per cent decline over last year despite promotions to augment sales from Japan.

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Blue Mountain coffee campaign a big success, says Starbucks