Local coffee producers plan to put up 18 more coffee shops across the globe over the next three years, using the Starbucks model for the local market.

They are expanding at a time when other sectors are contracting because of rising electricity and commodity prices. It's an indication that revenues in this gourmet coffee café market are outpacing costs.

The bulk of the new stores are to come from Café Blue, which plans to grow its store count by a factor of five to meet anticipated demand. Although they are expanding the fastest, others are also seeing rising numbers of coffee junkies.

"We plan to put up 15 stores in three years, so long as the shops are available," said Eilean MacKay, operations manager at Café Blue.

"It's not based on any great research, except to say that people are buying coffee," she said of increasing sales.
It seems an unlikely feat for a shop that currently has three outlets; but its new store in Sovereign is bustling with patrons buying lattes, frappes and other Italian coffee mixes (more on that later). The store's parent company is Coffee Traders Ltd - that's a big Blue Mountain coffee producer.

"The financing for the expansion will come from stores and our parent company," said MacKay. By December, they plan to put stores in the tourist districts of Negril and another in Montego Bay.

"Mouth mek fi talk," countered rival Patrick Sibblies who operates competitor Coffee Mill. If anyone can talk about growing a gourmet coffee culture in Jamaica, it's him. Sibblies started his first coffee mill café in the 70s, and now has shops in both major airports and another in New Kingston. Sibblies says that the café market is much larger than it was a decade ago. But he's more interested in satisfying the growing consumption of coffee in China.

"We have an opportunity to open more stores in Jamaica, but we have a different model," he said. Coffee Mills will by 2009 set up its second store in Puxi, on the other side of Shanghai and it will cost about US$140,000.

He said the store will be staffed by 12 Chinese and managed by a Jamaican-born American. His first Chinese store, opened in 2006, is doing reasonably well, but he views it as a learning experience.

Sibblies is also is big coffee producer and exporter, his shops kept his business afloat during hurricanes Ivan and Dean.

"Our shops were the lifeblood that maintained us during those periods. Plus we had a staff that understood our (challenges). And now we are in a position to overcome the challenges of losing 80 per cent of our production (at the farm)," he explained.

Sibblies was producing 60 kg bags a week but that was reduced to 20 kg bags after the hurricanes. Coffee production for the sector is still recovering from the hurricanes, but these cafes serve as a means to augment their income streams. It means that if cafes cannot source enough Blue Mountain coffee; they can always rely on coffee from other parts of the island or internationally. Currently 90 per cent of coffee is exported to Japan, the remainder goes to US, UK and emerging Asian markets. Jamaica's local market is about four per cent according to the players. US$30.7 million worth was exported last year, which was $1.1 million more than in 2006. Growth of the local cafes could eventually double that figure, which would rival exports outside of Japan.

But Sibblies is not the only café looking to expand overseas. Upscale coffee café Susie's is actively looking to franchise her operations in the anglophone and francophone Caribbean. But first, she is eyeing Montego Bay to open her third café.

"It is about time that I expand," said Susie Hana who opened in 1996. "I am also looking at other countries because the Jamaican economy is not great and has not been great for some time. So I am looking at Barbados, Martinique and St Kitts."

She recently spent millions to expand her Kingston flagship store. Franchising, will cost investors up to $20 million to use the Susie brand.

Cannonball cafe is another cafe chain which recently expanded to three stores. The management was off the island up to press time.

When Hana started, the concept of a cappuccino sounded more like a designer label than a drink.

"People said that I was crazy, that we don't drink coffee in Jamaica we drink tea," she said. "Now the size of the coffee as a portion of sales has increased a lot."
The growth of the coffee market is influenced by Starbucks whose appeal is filtering to Jamaica.

"People were curious, because of Starbucks and all its publicity. So it sparked the interest," she said about the international US-based company. Starbucks is a Fortune 100 company. It began 1971, opening its first store in Seattle; now there is even a store close to the Great Wall of China.
Starbucks is credited as importing the Italian gourmet coffee culture into the US. In the process it also transformed the potential of a coffee café from a mom & pop coffee store into a transnational brand - changing US lifestyle in the process. It made US$672 million net on revenues of US$9.4 billion last year.

Local cafes are copying aspects of the Starbucks model in an attempt to build their own brands. The difference is that some cafes want to franchise their brands but Starbucks does not offer franchising of its stores. That's probably the reason there isn't a Starbucks in Jamaica.

But like Starbucks they see coffee as black gold. Offering them an opportunity to grow the market from scratch--in the same way that bottled water companies did at the turn of the millennium.

"Internationally coffee is taking over and Jamaica has never really taken advantage of the fact that we grow coffee. [Yet] we don't really drink our own coffee," said MacKay.

In the last couple of years, these investors have turned that concept into reality, at least amongst elites. And now they want mass appeal. And part of that appeal is offering sweet coffee drinks similar to milk shakes. Nestle has done it via its popular Nescafe coffee dispensers. Haagan Daazs offers a sweet ice coffee drink. And recently Devon House Ice Cream was approached to set up a coffee beverage (machine) in its stores. "We turned it down," said manager Jean Hedge to the Business Observer. "We are not looking to do that but have been approached."

Across from that ice-cream shop is a vacant lot where WhatsonCafe was located. Manager Susan Couch said that the café was profitable but they had a fall-out with the new executive director of Devon House, Carole Fullerton. Fullerton told the Business Observer that a new coffee shop would fill its space.

"We are going to fill it with a coffee shop. We have had a number of companies approach us but we have decided on who we are going to take," said Fullerton. "Don't ask me to call names".

Ice-coffee, lattes, cappuccinos and all have prices in the range of $200-400 at these cafes. This is similar to Starbuck prices. For instance Cafe Blue sells its house special "Bluecinno" for $350 - around the same price as Starbucks' flagship ice coffee - frapacinno which is some US$5 ($360) whether in New York or Tokyo. However, the difference is that local gourmet coffee shops use expensive Blue Mountain coffee, Starbucks does not.

But shop-by-shop, these cafes are building a gourmet culture that just never existed in Jamaica, a country ironically renowned for its coffee.

Trousers in Denim

Cream of the 'Crop'

Cheeky's World