Juan Valdez Essay Example

for over 8% of the total GDP.

For decades, the coffee market has experienced an international crisis of price instability with significant negative consequences for the quality of life of coffee producers and their families. Colombian producers have received multiple benefits from FNC, being the major shareholder of the company. The company initiated their international expansion in 2005 in the US and later on they have opened stores in Spain as well as in other South American countries.

Between 2006 and 2007 the expansion was particularly rapid as the number of stores more than doubled to 125. However, the expansion pace decelerated in 2009 due to the global crisis, and Juan Valdez has been forced to close some stores in 2009, one of them being their flagship store on Times Square, New York City. In spite of deceleration throughout the crisis, Juan Valdez has gained growth rates in the fiscal year of 2010 and currently has 147 coffee shops in Colombia and abroad. The company is planning on expanding to Chile, Ecuador, Russia and Scandinavia.

Their strategy currently is to rely on franchises in an attempt to keep expanding globally with less investments and lower risks. Juan Valdez is also relying on growth of coffee bean sales at supermarkets, particularly in the US to offset the closures of some shops in the US. The Juan Valdez premium coffee is being sold at Wal-mart stores and is growing more rapidly than most of its coffee houses in the US. In this case, Juan Valdez is also planning on its presence in more supermarket chains and is at the moment negotiating.