The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios, Rabobank, México
24 - 28 de Marzo de 2008

The World

It takes more than lots of locations: In fact, according to Starbucks, that may be part of their problems. Over the last couple of years one of Starbucks’ key strategic imperatives was to grow the number of outlets. They now have over 15,000 stores in 44 countries. This resulted in “cannibalized traffic from existing stores and thinned the ranks of well – trained Starbucks managers and employees.” This as competition heated up with a number of chains offering high quality coffee at lower prices. But more important the company feels that they lost their way. According to Starbucks’ CEO they went from “a culture of entrepreneurship, creativity and innovation to a culture of, in a way, mediocrity and bureaucracy.” Their answer is to go back to their roots as a coffee shop. Looking to assure the quality, coffee will be brewed now every 30 minutes.

They will put in new machines and even bought the Coffee Equipment Company, which is said to manufacture a high end specialty single – cup coffee brewer. They will form a “partnership with Conservation International to certify environmentally responsible whole – bean expresso products”. And, to make sure that consumers have the total coffee shop experience, Starbucks is even worrying that their outlets smell of coffee: they will, for example, do away with a breakfast sandwich, which when warmed up, overwhelms the aroma of coffee. And, if that’s not enough, they are also developing a rewards program. Analysts don’t see this as a quick fix that will pump up Starbucks’ stock; rather it is an attempt to get them back on the path to success.

Winning with wellbeing: Reporting an 11 percent increase in turnover in 2007 Campina says their growth is due to the decision to intensify the focus on health and wellbeing segment. Products for this segment – fat – free drinks and desserts, low fat cheeses, a dairy drink to help weight control and a dairy –based meat replacement product” – have grown faster than the “traditional” dairy products. To further enhance the wellness focus, they entered into a jv with Thai Advanced Food to market a yoghurt drink that is said to help with digestion.

Mexico

No Canadian cattle for Mexico: That is what U.S. Border States are saying. Following the discovery of mad cow disease the imports of breeding cattle from the U.S. were suspended, with “with the exception of dairy heifers under the age of 24 months.” The U.S. industry asserts that that depressed cattle prices and argue that imports of breeding cattle are safe. With Mexico having just entered into an agreement with Canada allowing for importing Canadian breeding cattle, parts of the U.S. industry consider this as unfair and prejudicial. The state of Texas has prohibited “state operated export facilities from allowing Canadian cattle to pass through to Mexico. Following Texas’ lead Arizona, New Mexico and California are now urging export facilities in their states “to turn away Mexico – bound Canadian cattle.” While this action puts another dent in the trade relations between Mexico and the U.S., we don’t see it as seriously hurting the Mexican industry. Through November 2007 Mexico imported 42.7 thousand breeding animals, almost exclusively for the dairy industry as well as US$14.9 million in bovine semen.