The Agribusiness World Today

Ken Shwedel
Investigador de Agronegocios de Rabobank, México
24 – 28 de Noviembre de 2008

The World

Promoting the brand through coffee shops: We have often seen primary producers coming together to promote their product through a generic-type brand. One of the more successful efforts in terms of recognition has been the efforts by the National Federation of Colombian Coffee Growers. Almost 50 years ago they created a fictional character, Juan Valdez, to be the face of Colombian coffee. Juan Valdez is now one of the most recognized company icons in the world. Taking advantage of Juan Valdez icon the Federation to promote their Colombian coffee they have come out with a new concept: the Juan Valdez coffee shops. Right now they have “101 stores across Colombia” as well as a couple in the U.S. The idea is not so much as to compete with the upscale coffee shops as to make consumers more aware of Colombian coffee; particularly introduce younger consumers to Colombian coffee “in hopes [that] they’ll start requesting it at restaurants and grocery stores”. In fact, “some of its drinks cost the same as those sold by other high-end retailers, many cost less.” The Federation plans to open 500 more shops by 2010, in Latin America, as well as in Europe and the U.S. Although the concept is interesting, some analysts, though, are questioning their ability —managerial, infrastructure, etc. — to expand that fast over such a wide geographic area, especially during a global economic slowdown.

Trying again with more bottle water brands: Looking to expand their range of products in the UK market Coca-Cola said last week that it “had acquired Waters & Robson Holdings, which controls the Abbey Well water brand”. Although Coca-Cola does have Malvern and acquired Glaceau earlier this year, they have also run into problems. They were unsuccessful in their attempts to buy Highland Spring. And then there was Dasani, which “was ditched within weeks of its launch when it was revealed to be modified tap water.” What is happening it that as the growth of carbonated beverages has slowed down we have seen beverage companies expanding to other types of beverages, and Coca-Cola doesn’t want to be left behind and needs to strengthen it water offerings.

Mexico

Lots of ethanol: It seems that now that the boom is over Mexico has finally jumped on the ethanol bandwagon. The Secretary of Energy has said that it would shortly present a plan to promote ethanol production and that the 2009 PEMEX budget includes funding to study what is needed to update infrastructure to handle ethanol. According to the Secretary of Energy they have identified 22 projects in various stages for the production of ethanol. As far as we are aware of there are two plants that are presently producing ethanol. Both are located in the Northwest state of Sinaloa and use corn as the feedstock. The other projects not only contemplate corn, but also sorghum and sugar cane as feed stock. Although there are 22 projects we expect that only a handful will actually come on line. With the fall in ethanol prices in the U.S. we don’t see that the funding for all these projects —estimated at US$3 billion— will be available, especially in the near future.