Roasted Coffee in Colombia

FINAL SECTOR RESULTS - SC

SPECIALTY COFFEES
Reporting the final findings of the Value Chain Analyses for CBI
www.marketshare-international.com
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Content index
1. VCA PROJECT DESCRIPTION ......................................................................... 6
Preface........................................................................................................ 6
Project motivation....................................................................................... 6
Project consortium ...................................................................................... 7
Project methodology ................................................................................... 7
General project process ............................................................................... 8
Project Scope .............................................................................................. 9
2. EXECUTIVE SUMMARY ...............................................................................10
Introduction .............................................................................................. 10
General findings & recommendations ........................................................ 10
Summary of sector results ......................................................................... 11

2.3.1 Exotic Fresh Fruits ............................................................................................... 11
2.3.2 Processed Specialty Coffees ................................................................................ 11
2.3.3 Natural Ingredients ............................................................................................. 12
2.3.4 Tropical & Exotic Flowers & Foliage .................................................................... 13
2.3.5 Garments ............................................................................................................. 13
2.3.6 IT Outsourcing (ITO) Services .............................................................................. 14
Ranking the stars ....................................................................................... 14

2.4.1 Sector programme recommendations ................................................................ 15
2.4.2 Sector Priority Recommendations ...................................................................... 16
3. COLOMBIA AS EXPORT COUNTRY ...............................................................17
About Colombia ........................................................................................ 17
Political & Legal ......................................................................................... 17
Colombian Economy .................................................................................. 18
Social ........................................................................................................ 18
Technology................................................................................................ 18
Environment ............................................................................................. 19
4. EUROPE AS AN IMPORT CONTINENT ..........................................................20
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About Europe ............................................................................................ 20
Political & Legal ......................................................................................... 20
European Economy.................................................................................... 20
Social ........................................................................................................ 22
Technology................................................................................................ 22
Environment ............................................................................................. 23
General European Trend & Developments ................................................. 23
5. RESULTS - SECTOR SPECIALTY COFFEES (SC) .................................................26
Introduction to the SC sector and its analysis ............................................. 26
Demand and Trends in Europe - SC............................................................. 28

5.2.1 European demand for SC .................................................................................... 28
5.2.2 European trends - SC ........................................................................................... 33
5.2.3 Legal Requirements ............................................................................................. 34
Supply and Trends in Colombia - SC............................................................ 35

5.3.1 Colombian trends - SC ......................................................................................... 35
5.3.2 Colombian supply - SC ......................................................................................... 38
5.3.3 Overview of competitors ..................................................................................... 44
5.3.4 Opportunities for the SC sector........................................................................... 47
5.3.5 Opportunities in markets outside Europe ........................................................... 48
Export Value Chain – Specialty Coffees ....................................................... 48

5.4.1 Specialty Coffees: Value Chain Analysis .............................................................. 49
Overview of stakeholders .......................................................................... 50

5.5.1 Stakeholders – Actors .......................................................................................... 50
5.5.2 Potential Colombian companies with interest in CBI programme ...................... 51
5.5.3 Stakeholders – Supporters .................................................................................. 51
5.5.4 Stakeholder – Influencers.................................................................................... 52
5.5.5 Main Stakeholders............................................................................................... 53
Overview of the main bottlenecks ............................................................. 54
Overview of opportunities for Value Chain Development ........................... 55

5.7.1 Opportunities SC ................................................................................................. 58
Corporate Social Responsibility .................................................................. 60
Risk assessment ........................................................................................ 62

5.9.1 External factors ................................................................................................... 63
5.9.2 Internal factors (most important sector’s bottlenecks) ...................................... 64
Conclusions and recommendations ............................................................ 64
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Result Chain .............................................................................................. 66
References Processed Specialty Coffees (SC) .............................................. 67
Appendix SC1 ............................................................................................ 69
Appendix SC2 ............................................................................................ 75
References - Intro chapters ........................................................................ 77
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This Value Chain Analysis for Colombia is executed by:
MarketShare
PoBox 2117
5260 CC Vught
The Netherlands
Contacts:
Mr. Hans van de Rakt
Director MarketShare-International
info@marketshare-international.com
+31.6.28653340
Ms. Juliana Niño

Manager MarketShare-Colombia
Juliana.nino@marketshare-colombia.com
+31.6.24676179
This assignment was given by

CBI - Ministry of Foreign Affairs
Prinses Beatrixlaan 2
Den Haag
The Netherlands
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ACRONYMS & ABBREVIATIONS
B2B Business to Business

BPO Business Process Outsourcing
BSOD Business Support Organisation Development
CSR Corporate Social Responsibility
EEA European Economic Area. Conformed by: EU countries plus Norway,
Lichtenstein, Iceland.
EFF Exotic Fresh Fruits
EFTA European Free Trade Association. Conformed by: Switzerland, Norway, Lichtenstein
and Iceland.
EU European Union
FAO Food and Agriculture Organization
FLO Fairtrade Labelling Organizations
FNC Federación Nacional de Cafeteros (National Federation of Coffee-growers)
ICA Instituto Nacional Agropecuario (National Agricultural Institute)
ICO International Coffee Association
ICT Information and Communication Technology
IQF Individually Quick Frozen
IT Information Technology
ITO IT Outsourcing
LAM Latin America
MB Million Bags
MT Metric Tones
NI Natural Ingredients
SC Specialty Coffee
SCAE Specialty Coffee Association of Europe
SME Small & Medium Enterprises
T&EFF Tropical & Exotic Fresh Fruits
TFF Tropical Fresh Fruits
ToR Terms of Reference
UTF Underutilised Tropical Fruit
VCA Value Chain Analysis
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1. VCA PROJECT DESCRIPTION
Preface
This sector report is presenting the findings of the research of MarketShare. This report is based on
the Terms Of Reference (ToR) of the Value Chain Analysis for Colombia, as presented by CBI.
Project motivation
The Centre for the Promotion of Imports from Developing Countries (CBI) contributes to sustainable
economic development in developing countries through the expansion of exports from these
countries. It does so by offering an integrated approach of different services targeting SME exporters
from developing countries, European importers, business support organisations (BSO’s), policy
influencers and governmental authorities.
Over the past few years, CBI has been working actively in Colombia: some 70 Colombian exporters are
currently receiving export coaching from CBI experts through CBI’s Export Coaching Programmes. Most
of these are in the Tourism, Fresh Fruit & Vegetables, Home Textiles, Outerwear, Industrial Products,
ITO Services and Natural Ingredients sectors. In collaboration with Proexport, CBI has also provided
training in European export-related matters for many Colombian SME’ s over the past few years.
From 2009 to 2012 CBI supported the institutional export support framework in Colombia through an
institutional development programme at Proexport. Through this Business Support Organisation
Development (BSOD) programme, CBI supported Proexport in the development of a new unified
service delivery methodology, knowledge management tools, and upgraded market research and
export promotion skills of its staff.
In a new integrated country programme for Colombia (planned to be implemented from 2013 to 2017),
CBI would provide such and other services in an integrated way, aimed at a number of specific sectors
with European export potential. The envisaged objective of this new country programme would be to
boost exports from selected Colombian sectors to European markets. Possibly, a secondary objective
may be to boost exports in selected sectors to other (than European) markets.
The principal aim of this VCA is to generate sufficient information to identify the main opportunities
and bottlenecks in the export value chains of these sectors, and to assess whether or not a CBI
intervention is likely to contribute significantly to increased exports to Europe (and possibly to other
regions) by SME’ s in these sectors, and if so, to build a business case for a new integrated country
programme.
The VCA will be used to prepare the ‘business case’ for the CBI Colombia Country Programme. The
business case should provide the justification for CBI to invest resources in the programme, as well as
a general description of the programme.
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Project consortium
For the realization of this VCA, MarketShare is counting on three bodies of ample knowledge and
experience:
- an Expert Team
- a Coordination Team
- an Advisory Board
The actual study will be carried out by the members of the expert team, while the members of the
Advisory Board will be consulted on strategic issues and will provide extra guidance or sector
knowledge or contacts. The coordination team will guide and coordinate all activities outlined in this
document.
Participating partners in this project are:
Thought Refinery, Luis Eugenio Cifuentes Baeza, El Niño Business Consulting, Organic Services, Pilar
Morales Consultancy, David Agudelo, BlackPearl Partners.
Project methodology
Strategic Design for Value Chain Analysis
To enrich traditional methodological approaches, we used our team’s expertise on processes and tools
rooted in strategic design and innovation, also known as “design thinking”. Strategic designers bridge
marketing and R&D activities through a thorough understanding of both disciplines and methods.
Workshops to identify main gaps and opportunities
We began our project with a series of workshops with the sectors’ experts and with the CBI with the
goal to define the main bottlenecks and identify main issues and opportunities per and across sectors’
value chains to study.
Once the data from the workshops was analysed, we proceeded to design the primary and secondary
research activities. We included a mixed approach of qualitative and quantitative tools such as surveys,
questionnaires, and semi-structured interviews.
Image PD 1: Interactive Workshop
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Visualizations of main Value Chains findings

As a core activity of Strategic Design, we visualized the Value Chains’ main findings to allow an
integrated and richer understanding of stakeholders, bottlenecks and opportunities’ correlations.
Visualizations in strategic design are assets that allow experts and professionals of different fields to
get a clear picture of the main findings in easy and effective ways.
Image PD 2: Example of Value Chain Analyses visual
General project process

Based on the requirements and guidelines from CBI and in close cooperation with MarketShare the
following phases were defined:
Phase 1
INITIAL COLLABORATION
Phase 2
- Project scope DESK RESEARCH
Phase 3
- Team selection - Workshops FIELD RESEARCH
- Planning - Data finding - Interviews
- Conditions - Information analysis - Information enrichement
>> Agreement >> Inception report - Validation workshops
>> Final report
Image PD 3: Project Phases
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Project Scope
In collaboration with Proexport, CBI pre-selected the following sectors to be analysed in this VCA:
1. Exotic Fresh Fruits
2. Processed Specialty Coffees
3. Natural Ingredients for Food, Cosmetics and Pharmaceutical Products
4. Tropical & Exotic Flowers & Foliage
5. Garments
6. IT Outsourcing (ITO) Services
These sectors were pre-selected to be analysed in this VCA in order to assess their suitability to be
included in the country programme. They were selected mainly because of:
 Their relative size in Colombian exports. Ideally, there is a minimum of experience exporting
the product from Colombia.
 European market demand. There must be clear quantitative and/or qualitative indications
that the product is demanded in Europe.
 The opportunities they offer for job creation, poverty reduction and reduction of regional
inequality within Colombia
 The opportunities they offer for value addition through processing or product improvement
 The added value CBI could bring to these sectors.
Approach and criteria for pre-selection of products and/or services for each sector
Given the wide range of products and/or service possibilities of each sector, we considered it necessary
to establish a certain structure, criteria and scope that allows us to go from global to specific in an
organized and controlled way. For this, we adopt the same criteria mentioned above. This structure
and criteria allowed us to make a pre-selection of sector and products to focus the research into, and
in that way define a clear scope for CBI.
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2. EXECUTIVE SUMMARY
Introduction
Colombia is, like other developing countries, facing some tremendous opportunities for economic
growth. This due to the economic liberalization worldwide and the technological developments in IT
and telecommunications which makes communications cheaper and easier.
However it’s also facing the challenge to improve the efficiency and productivity to maintain its
position. Also to survive in this competitive market which is becoming more and more international.
A good business environment and related policies are necessary to improve competitiveness. When
such bottlenecks are identified, Policymakers have the opportunity to start reform processes with
setting new priorities into the value chain.
This report outlines a pragmatic approach for analysing value chain performances as the basis for
identifying binding constraints to growth and competitiveness. This approach is intended to facilitate
formulating a targeted support programme, so CBI can use a combination of tools to support its
ongoing private sector support work.
As mentioned in the above, Colombia is facing several challenges. This from political, violence, natural
disasters and infrastructural problems. However, it is clear that the present government is facing these
challenges and working hard implementing solutions for improvement and economic development.
Also the present situation in Europe should be looked at: economic crisis, high ICT usage in all sectors,
changing populations due to open borders, mix of cultures and languages, different consumption
patterns, and more.
While historically Colombia has had a main export focus to the US, now an FTA is in in place for Europe
as well, making the European market a very interesting opportunity for Colombia exporters. However,
it is important to realize that Europe has a variety of cultures and languages to deal with, in regards to
product specifications, import regulations and localized marketing.
General findings & recommendations

Based on the information what Colombia as an export country has to offer, Europe as an import target
market with a focus on the six sectors, we can come to the following general findings. These findings
are about the bottlenecks and opportunities, and thus be more successful with improving trade
between the two.
GENERAL CROSS SECTOR FINDINGS
1. Price is not the main competitive sales argument to be successful in Europe
2. A typical Unique Selling Point, or added value, should be chosen wisely to be successful in a
relatively “spoiled” target market
3. Colombian exporters are not known, or unfamiliar with the European Market Demand.
Understanding your customers’ needs and whereabouts is key
4. There seems to be more knowledge in the first part of the Value Chain (producing) and less in
the second part like exporting and marketing
5. Marketing and branding is not always up to the high European standards
6. More focus could be into niche markets to specific chosen countries or regions
7. Collaboration and joint efforts with other stakeholders should be more stimulated
8. Product development should be based on market/customer demand information
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9. Launching a certification program will improve quality standards, build trust and thus market
opportunities
10. More intensive collaboration between Government, Education and Employers will enhance
synergy effects towards export trade
11. The exchange rate of the Colombia Peso and the Euro is a concern in all sectors
12. Funding possibilities for all sectors is a necessity to give newcomers a chance to start their
export business to Europe
GENERAL CROSS SECTOR CONCLUSIONS

1. A better match between supply and demand by better market information, so one can adjust
its products, portfolio, marketing, partners to the specific local market demand
2. Intensified collaboration within the sector, and with the international stakeholders is key, as
otherwise its success in the value chain will be as strong as the weakest point in the chain.
3. Financial tools should be made available to make export possible not only for existing
exporters but mainly for companies that are eligible for export, but not have the export
experience and knowledge. Such tools could be export subsidies, information desks, financial
software applications or templates to structure and guideline financial planning.
4. Meeting certifications and labelling to comply or improve CSR in Colombia and customer
expectations on fair trade, organic/authentic product demand, and company transparency.
Summary of sector results

2.3.1 Exotic Fresh Fruits
Highlights of findings
- In Europe, there is an increasing demand for various fruits due to increased health awareness
and thus maintaining a healthy diet.
- Demand for transparency and traceability so customers know the products are unique and
produced in a safe, healthy, green and ethical way
- High costs of logistics and distribution and thus resulting in high product costs
- Lack of certifications to access to the European market and meet customer demand for this
- No market intelligence of the demands in the different European countries
- Gap of production quantities to export possibilities
- The CSR effect in this sector within this sector is certainly there
Conclusions & Recommendations
- To organize and collaborate more in this sector is the most favourable scenario. This within
the country, as in international partnerships. This to receive government support, make
commitments, share one vision and thus operate together for the same goal.
- Focus with specific fruit products to specific niche markets based on a solid market
intelligence knowledge.
2.3.2 Processed Specialty Coffees

The highlights of findings
- The market increased interest in authentic products, quest for origin, and prove of this with
labelling or certifications.
- The average quality coffee is still an important commodity market with high trading volumes
but there is opportunity for a new market with high quality specialty coffees.
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- A shift in different use of consuming the coffee product. Such as using coffee more at home
instead of in Café’s. New target groups such as young people. Also other countries outside
Europe discover quality coffees now like China, Russia and Japan.
- Increasing interest in CSR practices from the producers and the consumers, as they want to
know the story behind the product.
- Most producers are small farms and cannot afford CSR certifications
- Next to the regular high volume coffee products there is a niche market for high quality
coffee products. Product diversification is a solution which could be based on the three
different production regions in Colombia where each region represents a specific coffee
taste.
- These different coffee blends should be marketed each with its own brand name and story.
- Also in this respect the European consumer demands transparency regarding its product
origin, and demands an authentic product, which should be made clearly visible on the
packaging, according the European standards.
- These regional brands should fit the specific demand per country. As such a better and more
detailed understanding of the demand side of European countries is necessary to make the
right match.
- All these efforts should implemented by the coffee sector as a whole and not by separate
producers or roasters separately. It is therefore important that the complete value chain
strives towards a tight collaboration with new local and existing international stakeholders.
2.3.3 Natural Ingredients

- There are legal and regulatory factors which makes it difficult to exploit and export natural
ingredients
- There is a growing global demand of natural ingredients. The demand is driven by an
increasing need for pharmaceutical products and responsibly produced, natural, and healthy
food. Although it is a growing markets it remains still niche markets, and being competitive.
- The market is demanding products with less artificial ingredients and with ethical values.
- Conflict areas where armed groups hinder the local famers operations
- The NI sector is not enough organized to offer a centralized and coordinated production
scheme
- There is not enough information on market demand to target specific markets
Conclusions and recommendations
- To reach maximum efficiency in the NI sector, it is advisable to organize the sector for better
coordination in production and joint export activities.
- Improving the financial situation to local farmers with more investment possibilities to grow
their business.
- As NI is still a niche market it is very important to match with the specific local demands in
Europe. Market Intelligence efforts should be activated on a short term and share these
insights in the sector.
- All stakeholders to collaborate more for a more pragmatic certifications and standardisation
program which fits more to daily operations.
- Attention to a sustainable production methods where preservation of the environment and
at the same time energy savings are possible.
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2.3.4 Tropical & Exotic Flowers & Foliage

- An increased demand for CSR labelled products especially in the consumer market
- Increasing role of ICT for better marketing communications and to enhance communications
in the value chain
- The competition of producers from mainly the African continent with similar products and
methods, is harsh
- More product variety by producing specific flowers or new innovations to open the market
- More market research is needed on market demand per country, and better understanding
of specific customer needs
- Non efficient logistics is hindering a good cost and margin, and time to market of quality of
the products into Europe
- Bad packaging of flowers hinders the quality, overall image of product and suppliers
- New niche buyers are needed who understand the specific issues of these tropical flower
products and have access into the right market channels.
- As European countries all have different demands and supply chains, The Netherlands can
act as the main trading point, thus closing the distance between the European markets and
Colombia.
- In respect to closing the gap it is imperative to establish better and direct communications
between supply and demand, by the use of ICT. When using all the advantages of ICT it will
create better awareness of tropical flowers as an interesting product in the market.
- At this moment of time tropical flowers and foliage can be seen as a niche product and
market. Therefore it is necessary to find a specific import and sales channel for maximum
results. From a marketing point of view it would be advisable to market these specific
products with a authentic Colombian CSR label to differentiate itself from the common
flower products and competition.
2.3.5 Garments
- The retail channel is changing and finding new positions and collaborations in the value
chain.
- The export knowledge is not sufficient and therefore missed opportunities
- Differences between Colombia and Europe on several topics such as language & culture,
product designs, business culture etc.

- Competition from cheap production countries is fierce in this industry, and therefore further
market analyses is necessary
- In some subsectors there are market growth opportunities, when product innovations are
further developed.
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2.3.6 IT Outsourcing (ITO) Services

The high lights of findings
- Highly specialized software clusters have the largest market share internationally. On the
other hand small companies are looking for suppliers of their own size and preferably within
local reach.
- Changing buying criteria where price was important is changing to quality as criteria again.
- Different collaboration models are developing where dual development, parts development,
and near shoring are the best examples
- Colombia as an IT country is not known in Europe and efforts are not centrally undertaken to
improve this situation.
- Colombian suppliers are not very familiar with the specific target groups and their demands
in the European markets.
- Privacy and piracy are hot topics in the EU and should be addressed by the Colombia
suppliers
- The ITO sector can give solutions to job opportunities
- Time and cultural differences between EU and Colombia to be solved. Also regarding the
different working methods and tools.

- Colombia ITO suppliers need to close the gap with the European demands by being present
with an office or agent in Europe to solve time, cultural differences and working methods.
- More knowledge of the demand by Market Intelligence is necessary also seen the
competition from eastern European countries.
Ranking the stars
Based on the research on the six sector and criteria given by CBI, the following table shows an overview
of their respective importance and possible influence of the CBI support programme.
Image ES 1 - Sector Ranking Table
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2.4.1 Sector programme recommendations

Exotic & Tropical Fruits
The Fruits sector has good market opportunities, bottlenecks that can be solved by a good
collaboration within the whole chain which implies giving direction to the sector, and with a positive
effect on CSR. As such the CBI programme would have an positive impact on the sector. However the
quantity of possible interested clients for this CBI programme seems to be limited at this moment.
Specialty Coffees
There are good market opportunities and the CSR issues can be improved although with limited
effect. Given the well-known Colombia brand name in general and the production capacity of the
coffee sector, one can go one step further with redefining (matching) the coffee product portfolio
towards specific markets. The possible clients for the CBI programme is reasonable and if the focus of
the programme will be on Market Intelligence to match these specifics, it is advisable to continue
with the Specialty Coffee Sector.
Natural Ingredients
Based on the mentioned criteria the NI sector is the most interesting sector. The combination of
market opportunities, positive effect on CSR issues, and where issues can be solved on a
short/reasonable term. Also taken into consideration the possible number of interested Colombian
companies this would be a very interesting sector for further development.
Tropical Flowers
The Flowers sector is an established sector where is room for improvement in finding the right
products for the right markets. It seems this sector has not a high interest or attention from some
stakeholders. If all parties in the Value Chain work together there are certainly market opportunities.
Nevertheless the quantity of possible interested Colombian companies is average and should be
taken into consideration. We advise to continue to develop a CBI programme but needs attention to
details.
Garments
For the Garments sector are market possibilities but needs serious efforts or resources to be
successful. On the other hand the CSR effect is very large regarding effect on labour, working
conditions, fighting poverty etc. Also seen the possible interest of participating Colombian
Companies in a CBI support programme, we advise to continue a Support programme but with focus
on certain product subgroups and with further analyses.
ITO
The market opportunities in Europe are fairly large. However some issues has to be resolved to close
gap in culture, languages and working methods. The research has shown that these and other
bottlenecks, can be solved on a fairly short term. However the effect on CSR is very low, we advise to
continue with developing a CBI programme for this sector.
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2.4.2 Sector Priority Recommendations

As mentioned all sectors have a good opportunity in the market where a CBI programme can have
effect. However if we take a closer look and take all criteria into consideration, we suggest a certain
order of urgency or importance per sector.
The following sequence is recommended. This is based on the different criteria as outlined in the Table.
!Please note these criteria can be given some more importance than other criteria, and thus the
sequence might change accordingly.
1. NI
2. ITO
3. Coffee
4. Fruits
5. Garments
6. Flowers
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3. COLOMBIA AS EXPORT COUNTRY
About Colombia
Colombia is a country located in the northern region of South

America, with the following characteristics:
 Size: 1,138,910 sq. km
 Main cities: Bogota, Medellin, Cali, Barranquilla
 Inhabitants: 47 million
 Language: Spanish
 Literacy rate: 94%
 Currency: Colombian Peso / 2,366.00 COP = 1 EUR/€
 Inflation: 3,1 %
 Unemployment: 10,1 %
 GDP: US.D 378.713 Billion
 Natural resources: petroleum, natural gas, coal, iron,
nickel, gold, copper, emeralds, hydropower.
Image CO 1: Country of Colombia
Political & Legal

Today the Colombian government is reaping the fruits of the policy it implemented to a democratic
security whose objective is to create favourable economic conditions in order to give investors’
confidence, especially foreign investors. The government has put efforts into concluding free trade
agreements, namely through an association agreement as well as a series of agreements in the area
of investments in the European Union, aimed at developing a stable and transparent economic
environment in which contributions in capital can prosper.
Next to the existing Free Trade Agreement with the USA, recently the FTA with Europe has been
signed. This FTA started being effective on August 1, 2013. It offers possibilities for market share
increase for products and services which are already present in the Colombian market. According to
the EU, Colombian products will be more competitive in Europe.
Image CO 2 - President Santos of Colombia and some of his ministers
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Colombian Economy
Colombia's main economic sector is the trade-services sector, which represents more than 55% of the
GDP and employs nearly 60% of the active population.
In 2002, the agricultural sector accounted for 13% of GDP and 24% of total exports as against 60% in
1990. This situation is due in part to the (drugs/violence) conflict, but also to the lack of attention given
to this sector and the unfair concentration of land ownership, resulting in the poor use of land.
Industry represents around 36% of the GDP and employs nearly 20% of the population. Colombia's
main industries are oil, textile, chemical products, metallurgy, cement, cardboard containers, plastic
resins and beverages.
Colombia uses fiscal incentives as an instrument to promote national and foreign investment, as well
as other support programmes to promote development in specific sectors. This contributes to social
and political equality.
Colombia as a business nation is doing well in comparison to other LAM countries. Colombia has
reformed itself as one of the new economically interesting countries of Latin America. All sectors could
benefit from the positive rankings. Especially as Colombia is still suffering from a bad reputation and
could initiate a new and refreshing nation branding campaign.
The government has prompted the launching of a national development plan to rebuild Colombian
infrastructure, highly damaged by severe flooding in the last years.
Only 2 European countries (The Netherlands and United Kingdom) are in the top 10 of highest export
numbers. Interesting would be to enter into new European countries, like Germany or France as
these are big and strong economies.
Social
Building on the “democratic security” agenda of the previous administration, President Santos
campaigned on “democratic prosperity,” focusing on economic development (jobs), security, and
poverty reduction. The Santos administration passed an employment and formalization law, which
seeks to create 2.5 million jobs, formalize 500,000 informal jobs, and reduce annual unemployment
to single digits, all by 2014. His legislation to reduce the deficit through fiscal discipline measures was
passed in late 2011. [1]
Of all the Latin American countries, Colombia occupies third place after Brazil and Guatemala as
regards inequality. The richest 10% of families receive 45% of total income, while the poorest 20%
receive only 2.7%. On average, the income of a rich man is 58 times as high as that of a poor man. The
inequality in the distribution of income adversely affects human development. Development in
Colombia is very uneven, varying not only between the urban and rural areas, but also between the
various departments. It is one of the principal challenges Colombia will have to face. [2]
Technology
The country spends very little on R&D (around 0.3%) and has failed to take advantage of FDI inflows
to develop its technological capabilities. The level of expenditure undertaken by Colombia is far below
the desirable level of 1% of GDP (as given by the OECD
The patent regime in Colombia provides for a 20 year protection period for patents and 10 year term
for industrial designs; protection is also provided for new plant varieties.
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Environment
Natural disasters in Colombia are the result of several different natural hazards that affect the
country according to its particular geographic and geologic features. Human vulnerability,
exacerbated by the lack of coordinated emergency planning & management, and the fragility of the
economy and infrastructure can influence financial, structural, and human losses.
The most important natural disaster in Colombia this regard is the heavy rainfall, which is heaviest
in the Pacific lowlands and in parts of eastern Colombia, where rain is almost a daily occurrence and
rain forests predominate.
The opposite phenomenon of drought is also frequent. January through March and July through
September are the dry seasons, when abnormally dry periods cause shortage in the water supply to
crops and urban centres.
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4. EUROPE AS AN IMPORT CONTINENT
About Europe
European Union is consisting of:

 27 countries
 Size: 4 million Km2
 Political headquarters: Brussels
 Inhabitants: 505 million
 Languages: 23 official
 Literacy rate: 98
 Inflation rate: 1,20 %
 Unemployment: 12.1%
 GDP: 12,894 Trillion Eur
Image EU 1 – Country map of Europe
Political & Legal

The European Union is a single market. This means that goods, capital, services, and people can move
freely among the member countries. Over the years the import of goods into the EU from developing
countries has increased. Also the composition of imports from developing countries is changing in
favour of manufactured goods.
The market access to the EU is difficult for many exporters of developing countries due to factors like:
1. The diversity of European Market, as it is a group of different national and regional markets offering
different opportunities and approaches.
2. The European market also has a Higher competition level. Which forces companies to continuously
increase the product quality, faster product innovations, shorter product life cycles, lower product
prices, and providing better services to their clients.
3. To comply with regulations and market requirements of international standards, marking, label and
certificates.
4. Restrictions in terms of tariff and non-tariff barriers such as quota restrictions.
[3]
European Economy
The creation of the single market and the corresponding increase in trade and general economic
activity transformed the EU into a major trading power. The EU is trying to sustain economic growth
by investing in transport, energy and research, while also seeking to minimize the environmental
impact of further economic development.
20
Although Europe counts for only 7% of the world’s population, the EU's trade with the rest of the world
accounts for around 20% of global exports and imports. The EU is the world’s biggest exporter and the
second-biggest importer. Around two thirds of EU countries’ total trade is done with other EU
countries. [4]
Like in other continents, different states have different economic strengths and weaknesses.
However, the true strength of the European continent is its average economic performance, which is
one of the highest. Even the least performing states of the European continent have higher GDPs than
countries in other continents. [5]
As the European countries are (moving towards) a single market system, the exporters are to be
cautious when choosing agents and distributors for their products to ensure success in the European
markets. In addition, the single currency (the Euro) is making cross-border markets and distribution
possible as well. The level of competition has increased in the EU due to reduction of boarder and
market barriers. Exporters should take a great care in choosing a distributor so that exporter is well
informed about the latest changes made in the EU requirements along with information about the
specific industry in which exporter is planning to launch the product. The pre-EU systems are in some
countries still in place although in a modern EU version, and as such business customs and national
legal differences, are still in place [3]
Image EU 2 - Annual GDP forecasts per country
Since the summer of 2012, financial market conditions in the EU have improved substantially. As
financial and political leaders still trying to resolve this. But this improvement has not yet resulted into
the daily life economy. Economic activity has been disappointing in the second half of last year(2012)
and there are only now some signals from leading indicators that GDP in the EU is improving. [6]
The labour market, however is a serious concern. The employment rate is forecasted to shrink further
for some quarters, and unemployment remains unacceptably high in the EU as whole. In the Member
States largest adjustment to solve this is needed. [6]
21
The relief in financial markets and the aimed recovery have to be used to press with the political
agenda to ensure the sustainability of public finances. But also to overcome financial fragmentation,
implement growth-supporting structural reforms, lift employment and strengthen the architecture of
EMU. [6]
In the light of high unemployment, domestic price pressures are expected to remain subdued. Core
inflation has been falling very gradually in 2012 and is expected to hover at a rate around 1.8% in the
EU and 1.7% in the euro area. [6]
European Union countries apply the EU tariffs customs duties, which are based on the international
Harmonized System (HS) of product classification. Duty rates on manufactured goods from outside the
European Union generally is less than four percent and are usually based on the CIF-value of the goods
at the port of entry. [6]
Social
The EU faces challenges in its demographic future. Most concerns centres on several related issues: an
ageing population, growing life expectancy and immigrant flow.
Life expectancy (which rose by eight years between 1960 and 2006) could continue to increase by a
further five years between 2006 and 2050 and could result in a larger proportion of people surviving
to the ages of 80 and 90 – an age when their health situation can often be delicate. [7]
The ageing population will also have an impact on social protection and public finances. On the basis
of current policies, ageing will have a serious impact on public spending. Budgetary issues of this type
could compromise the future balance of pension and social protection systems in general, and perhaps
even the potential for economic growth or the functioning of the single currency. [7]
There is substantial movement of people within the Union i.e. internal migration; this has traditionally
followed two patterns:
The need to attract, acquire, leverage, and retain customers, remains a primary concern to business.
Revenue growth through customer acquisition and retention is as important a requirement in e-
commerce as it is in other business. Customers, especially in the Western business culture, count speed
of service as a key reason that they do business with a company. [8]
Technology
Research helps boost economic growth, create more and better jobs, and ensure the EU's
competitiveness in the global economy. The EU encourages investment in research and technological
development (R&D) and actively supports it in selected areas. [9]
The EU has set itself the objective of spending 3% of its gross domestic product (GDP) on research by
2020. Investment has nevertheless stagnated at around 1.84% (since 2005) compared to over 2.5% in
the United States and 3% in Japan. [7]
Information technologies, and especially the Internet and mobile telephony, have enabled the
development of the Information Society. This sector represents nearly 4 % of employment in the
European Union (EU). The EU intends to promote the development and dissemination of new
information and communication technologies (ICT) The EU completed the liberalization of the
European telecommunications market in 1998. This framework has since been reformed twice: in 2003
and 2009. [7]
A uniform system of protection of intellectual property rights, ranging from industrial property to
copyright and related rights, is aiming to found and stimulate creativeness and innovation within the
22
European Union. Respect of the basic principles of the internal market (the free movement of goods
and services and free competition) is based on standardization of intellectual property at European
level. [7]
Northern European countries have the highest e-commerce penetration ratio. The three largest
traditional markets are the United Kingdom, Germany, and France. Internet penetration continues to
climb in Europe, and with its head start in wireless communications future prospects for e-commerce
look bright. However, growth has been constrained somewhat by telecommunications regulations. [8]
Environment
The European Environment Agency aims to build on the EEA's Environmental indicator report 2012,
with the key objectives and targets in EU environmental policy and legislation for the period 2010–
2050. It focuses on selected environmental and resource policy areas, specifically:
• energy;
• greenhouse gas (GHG) emissions and ozone-depleting substances;
• air quality and air pollution;
• transport sector emissions of greenhouse gases and air pollutants;
• waste;
• water;
• sustainable consumption and production (SCP);
• chemicals;
• biodiversity and land use.
Growing environmental agenda and community awareness. As such the importers in EU are
increasingly demanding environment friendly produced goods and urge companies to carry a social
code of conduct.
Some European countries emphasize cooperative relationships, while other countries focus on
competition and market processes in their corporate governance frameworks. Europe is not a
monolithic bloc of countries. Its strength and weakness at the same time is its variety of management
styles and cultures. European managers are still facing very different business environments, cultures,
and corporate governance issues. [10]
General European Trend & Developments
Outsourcing
The value chain in Europe is not as long and complex as it used to be. More and more producers
outsource their production (partly) to other countries. Reasons vary from lower prices, speed of work,
quality, high volumes, closer to target markets, etc. A low price is still an important argument although
managers are getting more conscious about a good price - quality ratio.
23
More organic / natural products

Customers are more conscious about their health and recognize the advantages of nutritious food
products. But not only food products, also clothes made from organic fibres which are avoiding skin
irritations etc. are preferred. Stores and supermarkets that only sell organic products are gaining
momentum.
CSR - conscious buying

Customers prefer products that have Ethical values. Garments produced by children in bad
circumstances are not accepted anymore. Factories which produce carbon free / with low pollution,
are preferred. Adding such a social value is an important (marketing) argument.
In this sense people require a level of transparency of their suppliers/producers. As people are more
critical, they want to know what they are buying, and from whom. Buying products out of countries
with a good reputation is therefore important.
Internationalisation
Employees are working now in other countries as of the Schengen agreement. Companies are looking
for new international markets to sell. Producers buy in other countries. This as transport time is
shortened faster and cheaper, and communications are easier because of technical developments.
One might conclude that trade is not only from one country to another (neighbouring) country
anymore, but continent to continent (e.g. LAM to Europe) As a result The Netherlands is often used as
a logistics and business gateway to the rest of Europe.
Changing shopping behaviour

How and where people buy their products is changing. This because of the increased use of ICT,
Customers are better informed and able to compare prices all the time. With the improved
transportation possibilities, products are delivered at your doorstep. Some steps in the buying chain
are even skipped because of this. Customers buy directly from producers whereas agents or
distributors are not involved anymore.
Increasing role of ICT

People have access to new ICT tools; small powerful computers, mobile smart phones and high speed
internet connections. Everyone is better informed and prepared about new innovations, products and
prices. This by consumers as in business.
Authenticity
As a result of ICT, highly competitive product market, a dens and spoiled population, customers are
looking for authentic and original products. Those that stand out from the crowd, have an original
design, innovative functionality, produced from authentic materials, produced by small craftsmen
shops, etc.
From east to west?
24
On one side the consumer market opportunities are also moving to Eastern European countries. As
economies are now more open, labour in these countries are cheap and hired sooner also seen the
open labour laws. The size of the middle class is growing steadily, or even rapidly in some countries.
On the other hand production in the Far East is not as eminent as it used to be, because of increased
prices, different communications habits, decreasing qualities, etc. This opens new opportunities for
the Western hemisphere.
25
5. RESULTS - SECTOR SPECIALTY COFFEES (SC)
Introduction to the SC sector and its analysis

The SC sector in the VCA, focuses on specialty types of coffee outside of the traditional product sold
worldwide as a commodity, which is used to mix with other coffees and make a better quality blend.
Colombian coffee is one of the country’s flag products known all over the world; however, there is very
low penetration of origin-specific and specialty coffees from Colombia in the European market. The
traditional sales of Colombia have been more focused in supplying the American market. The US
market purchased 43.5% of total Colombian exports [5] and the sales are mostly made in green
product, which means not roasted and requiring processing from a third party abroad to transform
and package it for the end consumer. Due to this, there is not enough knowledge in producing end
product for the European or any other market.
The term 'specialty coffee' originated in the United States. It was initially used to describe the range of
coffee products sold in dedicated coffee shops, in order to differentiate these coffees from coffee
generally available through supermarkets and other retail outlets. The term 'gourmet' is also used but
is now applied to so many products that it has lost all relevance [14].
In 1982 the Specialty Coffee Association of America (SCAA), defined specialty coffees as “well prepared
coffee, from a single origin and a distinctive taste“ [22]. According to the SCAA Specialty Coffees can
be divided in 5 types:
Coffees of Origin: Are coffees that come from a country region or farm with a number of unique
characteristics due to their special growing place and are sold to the consumer without mixing with
other types, origins or qualities.
Organic + sustainable Coffees: Organic are those cultivated without the use of agrochemicals such as
fertilizers, fungicides, and insecticides. Cenicafé chapter of SC’s includes organic as part of the
sustainable coffees which also include those with a CSR practice or label such as Fair Trade, UTZ, or
friendly with birds [22].
Flavor Coffees: Are coffees who have receives a certain flavor during the roasting process by adding
elements or resins from certain flavors such as vanilla, chocolate, hazelnut, amaretto, strawberry,
among others. They alone account for a 40% of the specialty coffee market.
Full Roast Coffees: Also called Vienesse, Full City or High Roast [25] are those coffees with a superior
degree of roasting than traditional and are destined to the preparation of espressos and cappuccinos.
It is not necessarily single origin and can be blended.
Decaffeinated Coffees: Those coffees that are subject to a process to extract the caffeine contained in
the green bean. They represent the 10% of specialty coffees and are usually blended.
The Specialty Coffee Association of Europe (SCAE) defines SC as “a crafted quality coffee-based
beverage, which is judged by the consumer (in a limited marketplace at a given time) to have a unique
quality, a distinct taste and personality different from, and superior to, the common coffee beverages
offered. The beverage is based on beans that have been grown in an accurately defined area, and
which meet the highest standards for green coffee and for its roasting, storage and brewing.” [24]
Both SCAA and SCAE include origin, high quality and unique taste to their definition of specialty, but
while the European entity has a more open definition, the American association categorized the type
of specialty. Nevertheless, the main difference between the two definitions is that for the European
Association SC’s are an end product and crafted, which means processed [14] and is the definition on
which this study will be based.
26
Given this lack of precision in definition it is extremely difficult to describe the market in a global way.
The best approach appears to be to look at the specialty market from different country or regional
viewpoints. However, the very notion 'gourmet' or 'specialty' suggests some degree of exclusivity [14].
Until there is general agreement on what constitutes ‘specialty coffee’ it is not possible to accurately
quantify how much is produced, or how much is consumed. Except to say that the general consensus
appears to be that specialty coffee in all its different forms may be approaching 10% of world
consumption [14], with nearly 20% of adult ages 25-29 consuming SC’s, and two-thirds of all adults
consuming coffee at least once per week [16]. Consumption in Western Europe is dominated by
roasted coffee, which accounts for around 85% of consumption. Soluble coffee consumption has
remained relatively steady at around 6 million bags for the past 10 years.
Coffee production in Colombia is unique with three high mountain ranges and valleys with multiple
micro-climates to allow for coffee harvesting all-year round. There can be identified two periods of
coffee production concentration: the main harvest period from October to December, produces 60%
to 70% of the total and the second harvesting period from April to June, the “mitaca” crop, harvested
mainly in the central coffee region of Colombia [2]. The production of Colombian Coffee has declined
heavily since 2008, due to “La Niña” weather phenomenon, which has brought severe rainy seasons
and diminished the overall production. Other aspects such as bad fertilizing due to high costs, poor
maintenance and attention of the farms, which translated into an increase in rust disease “roya” and
the borer worm “broca”, have participated in the production decline. As a result, the country, which
used to be number 2 in world production of coffee behind Brazil, is now positioned in the 4 th place of
world coffee producers after Brazil, Vietnam, and Indonesia.[1] As a result there is an on-going interest
in developing new strategies in adding value and re-thinking the old strategy of selling green coffee at
high international prices.
Although Colombia has always focused more in exporting to the American market, Western Europe
represents the highest consumption of coffee in the world. Statistics show that the EU consumes 36%
of the world’s coffee with Germany consuming 7%, France 4% as well as Italy, 4% and the rest of
Western Europe consuming 21% of the world’s coffee. The countries that follow are United States
(17%) Brazil (14%) and Japan (6%) [17]. The consumption of coffee per capita in Western Europe is
also much higher than in other parts of the world with the first 8 nations in the top ten of per-capita
consumption located in Western Europe [17]. Mainstream consumption in the last years has decreased
which lead to a decrease in prices at retail point, compromising quality to retain margins. On the other
hand there has been an increase in the consumption of specialty coffees of higher quality, making the
market more divided in the past years and marking a clearer differentiation between mainstream
coffee and specialty [18]. This market has a great potential but also great challenges for Colombian
exporters. Western Europe still imports a vast majority of their coffee in green format, with
approximately 45’000.000 bags of green coffee imported versus only 1’200.000 bags of processed
coffees (Roasted, decaffeinated, and soluble) [18].
The information contained in this report was gathered through desk research (information obtained
from documents, Internet search, specialized market databases and sector organization databases);
and field research carried in Colombia and Europe through interviews to sector experts of both
companies and BSO’s. The respondents’ identities are kept private and they will be referred to as
Specialty Coffee Expert (SCE) and a consecutive number to identify them. They are:
SCE1: Retailer Company – Europe.

SCE2: BSO Expert – Europe.
SCE3: CSR Expert – Europe.
SCE4: Export Company – Colombia.
SCE5: BSO Expert – Colombia.
27

Demand and Trends in Europe - SC

5.2.1 European demand for SC
Overview of coffee consumption
According to the International Coffee Organization (ICO) EU is the world largest importer of coffee,
accounting for 66% of worldwide imports equivalent to 4 million tons, in 2008. The second and third
largest importers are the US (24%, 1.5 million tons) and Japan (7%, 423.602 tons) [18].
Germany is the leading EU importer, followed by Italy, France, Belgium and Spain [25].(See Table SC 1)
Period May '11 -Apr '12 May '12 - Apr '13

Germany 21 118 682 22 022 689
Italy 8 275 329 8 866 470
France 6 984 426 6 743 934
Belgium 5 781 290 5 509 432
Spain 4 825 080 5 194 769
UK 4 165 530 4 104 092
EU 70 455 037 72 402 779
Table SC 1 – Imports of coffee in Europe (in thousands 60 kg bags)

Approximately 4% of the green coffee imported to EU is re-exported primarily to the US market. The
last decade, global coffee consumption has grown consistently at around 2.5% a year, from 6.3m
tonnes in 2000 to 8.1 tonnes in 2010. In traditional markets such as Western EU, Japan and the US
consumption grew 12%, in exporting countries 57% and in emerging markets such as Eastern Europe
and Asia by 46% [20]. Therefore, the growth has shifted from traditional markets, which do not have a
significant growth, to emerging markets, which are growing faster. Furthermore, domestic
consumption in producing countries has been increasing highly over the last years.
European market for Processed Specialty Coffee
As it was mentioned in the introduction, high quality of specialty coffees refer to distinctive flavors,
which are the result of the unique characteristics from the soil in which they are grown. In some cases
this is translated in ethical norms and benefits to producers through premium prices. In addition, the
specialty coffee industry promotes to spread knowledge towards making consumers more aware of
coffee characteristics, production costs, amount of labor required, and all the conditions involved in
the production and marketing process. According to SCAE, specialty coffee represents around 5 to 10
percent of Europe's total coffee market and around 10 percent of total world coffee production. This
market has proven unperturbed by the economic downturn with an annual growth of 1 to 2% [27].
28
In Europe the coffee consumption is divided mainly in two market segments; the retail that accounts
for 70% and the consumption out-of-home to which corresponds the other 30%. This last one refers
to consumption in the workplace, restaurants, coffee bars and through vending machines. In relation
to certified coffees, governments that implement sustainable procurement policies are emerging as a
new segment. Also the consumption at home of SC is becoming popular and another segment is
becoming apparent.
Processed coffees on the other hand are a completely different story since Europe is the main
processing region for coffee in the world and big corporations have been dedicating to this business
for decades. Therefore, the overall contribution of roasted coffee imports from Developing Countries
accounts for only 0.6% of total roasted coffee imports by the EU, indicating that exports of roasted
coffee remain a limited market for DC coffee producers. The main supplies of roasted coffee to the EU
market are sourced inside Europe, which is home base to large roasting companies such as Nestlé,
Kraft, Tchibo, Lavazza, Sara Lee, Melitta, Illy, and Segafredo Zanetti [30]. In spite of this, between 2006
and 2010 there was a considerable increase in volume (3.7%) and value (7.9%) of processed coffee
imported to the EU from DCs.
The countries whose imports of processed coffee from DC’s represent the biggest share in their market
are: Slovenia (20%), Italy (3.9%), Cyprus (1.9%), and the UK (1.6%). In terms of total imports of roasted
coffee regardless of their origin the biggest importers in Europe are: France (24%), Germany (11%) and
Netherlands (10%). Brazil is the largest Developing Country supplier of processed coffee to the EU,
representing 39% of total imports from DC’s, followed by Bosnia & Herzegovina with 11%, China with
7.4% and Colombia with a 6.9%. In the period 2006-2010 Colombia’s exports of roasted coffee to the
EU decreased approximately 19% while other DC’s increased their exports by 10% over the same
period.
Northern EU
Specialty coffee in EU is a niche market in a continent in which the offer of good quality coffee is highly
available. Mostly the real enthusiasts searching for something different compose the specialty target.
The Northern EU specialty market is part of the world´s largest market for coffee. There is in this region
a massive increase in the number of micro-roasters operating. Usually they serve local areas, or very
select targets via web. These small producers will need to depend on specialty importers or agents to
access efficiently to this market. The entrance of huge Europe´s roasters into this sector is probably
happening also because they appreciate its potential. Therefore the competition of small specialty
roasters is high and probably their market share less in comparison to the US case. For exporters the
area to cover is broad, with a broad variety of preferences for quality coffee.
The largest coffee market in Europe is Germany with a market share of 23% [8]. The total coffee
consumption in 2012 was of 526,860 MT [9]. In the country are a considerable number of roasters
from which Tchibo and Kraft Foods are the main players. Germany is also the largest organic food
market in Europe however the organic coffee imports were just 8,400 MT in 2009 and 7,620 in 2010.
Despite this substantial decrease some companies are making efforts to have more sustainable coffee.
Such is the case of Kraft foods, which aims to reach its goal of 100% sustainable coffee by 2015.
The Netherlands compared to Germany, Italy and U.K. has the highest consumption per capita. The
average coffee consumption per day is three cups a day. In 2010 the consumption of roasted coffee
reach 120,000 MT [9]. The biggest player in the Dutch market is Sara Lee with the brand Douwe
Egberts, which has a market share of 50%. In the country the market for sustainable and certified
coffee is growing rapidly. The largest supermarkets use 100% certified coffee for private labels and Fair
Trade or Organic for private specialty products. The coffee industry collectively committed to increase
by the year 2015 the market share of sustainable produced coffee to 75%[10].
The United Kingdom is the fourth largest coffee consumer in Europe with a market share of 8.3%. The
country consumption in 2009 was of 193,000 MT or 8.3% market share of the total [11]. The UK stands
for having a preference for the consumption of instant coffee. Currently this one represents the 75%
29
while roasted and ground coffee just reach 25%[12]. The UK consumers have accepted the Fairtrade
widely. The country accounts for the second country with highest per capita consumption of Fair-trade
after Switzerland. Overall the UK consumer is very critical and the certifications are not enough. It is
important for these buyers to verify ethical and environmental practices throughout the value chain.
Southern EU
The Southern EU specialty market is mainly Italy, which behaves completely different from all the other
EU countries. The country is the second biggest consumer of coffee in Europe with a market share of
15%[8]. The consumption in 2001 was 349,000 MT. In contrast to Germany the main roasters are small
businesses that supply the local market and there are some few well-known internationally
corporations like Lavazza, Illy and Segafredo. So there are over 1,500 independent roasters that supply
to a multiple number of Eastern European markets as well as small roasters that operate nationally.
These roasters usually acquire ready-made, ready-to roast green coffee blends from specialty
importers to offer mainly to the espresso consumers segment. Even though of these small specialty
roasters are still successful in the market, they are facing a strong competition from larger and medium
roasters whom introduce the single serve pod systems. These have been growing at an annual rate of
20% over the last few years.
In Italy Fairtrade coffee consumption in 2008 was just 371 tonnes but is currently growing according
to FLO. And although the organic market is popular in the country, the one for organic coffee just
accounts for the 0.5% of the total.
Certified Coffee
In recent years, sustainable coffee initiatives such as Fair Trade, Rainforest Alliance, UTZ Certified,
Nespresso (AAA), Starbucks (CAFE), among others, have thrived with growth rates that diminish the
conventional coffee markets for the last decade. (See Image SC 1)
Conventional
Gourmet
Organic
Fairtrade
Starbucks
UTZ
Nespresso
Rainforest
0 20 40 60 80
% of growth
Image SC 1 – Annual average growth rate of 3rd party verified and private labels (2006-2009 sales)
Source: World Coffee Conference 2010 [23]
30
The great majority of certified countries come from Latin America, where Mexico and Peru are the
major providers [23]. Unfortunately there is a large gap between sustainable coffee volumes available
and actually purchased. Besides the obvious reason that the demand for sustainable coffees does not
match the production levels, some other factors play a role in explaining the current gaps.
Firstly, the demand for coffee depends on various attributes of quality, including taste and origin. Not
all the sustainable coffee available matches the buyer’s criteria. Coffee standards systems indicate that
to match supply and ensure demand, it is necessary to have on offer a broad range of qualities and
origins. Secondly, double and triple certifications blur statistics of sustainable coffee volumes [13]. This
basically means that very little production of certified coffees is actually purchased as an added value
product; not all certified coffees are specialty coffees. This is an important distinction for the purpose
of this study that should be taken into account when placing certified, sustainable or organic coffees
into the specialty coffees segment.
Image SC 2 shows certified coffee production volumes in 2010 and projections for the following
decade, versus the quantities actually purchased as sustainable. It is quite obvious that a vast majority
of the certified coffees are not purchased as such. When coffee is produced sustainably, but not sold
as a sustainable product, the potential benefits of preferential market access, more direct commercial
relations and premiums may not be available. Nevertheless, a major objective of implementing coffee
production standards is to improve the livelihoods of producers. Although prices and premiums are
important variables in this regard, they are often not the only or even the most important elements
that determine the overall sustainability of a given producer.
As it happens with habits, trends and likes; European countries have differences in their preferences
and the penetration of certified coffees. In Germany, certified coffees represent 3% to 7% of the total
coffee consumed. This country prefers greatly organic coffees, representing 90% of certified coffees,
and 10% Rainforest Alliance. Italy on the other hand, has very low interest in certified coffees with only
1% of the total of coffees being certified. 50% of these are organic and 50% Fairtrade. In the UK
Fairtrade is very strong with 90% of the certified market followed by 10% of Rainforest Alliance.
Certified coffees represent 20% of the total of consumed coffees. In the Netherlands, the penetration
of these types of coffee is between 38% and 40% with UTZ dominating the market at 90%, followed by
Fairtrade with 10%. [13]
31
Image SC 2 – Volume of available and purchased certified and verified coffees in 2010 and future
projections (in thousand MT). Source: TCC [13]
For organic coffees, Peru and Mexico are currently the largest producers in the world, with tens of
thousands of tons of coffee beans, mostly harvested by small indigenous farmers. Other leading
producers in organic coffee are Honduras, Ethiopia, Indonesia, Colombia and Nicaragua.
Roughly 50% of the world supply of organic coffee is produced by small farmers’ organizations, which
are members of FLO-International (Fair Trade Labeling Organization). The other half of the world
production is supplied by small farmers’ organizations, which are not FLO-registered although some
are members of Fair Trade programmes, and by private small, medium and large-scale farmers not
belonging to Fair Trade programmes [23].
Image SC 3 – Willingness to pay more for certified products. Source: GlobeScan market research for
FLO International (Label Perceptions Survey) [23].
Another important aspect to take into account when considering a certificate strategy is the willingness
of consumers in paying a premium price for such products. Image SC 3 shows how much extra would
some countries consider paying for a certificated coffee. In Switzerland for instance, 71% would
consider paying extra. 6% of the Danes, Norwegian and UK would be willing to pay 20% more if the
coffee is certified and this certificate is trustworthy [23] while only 1% of the French would be willing
to pay so much more and only 54% would even consider paying more at all. This reveals that
consciousness and willingness to pay extra for this type of products do not always go hand in hand and
that as with many other points, Europe is everything but unified, reinforcing the idea of independent
strategies to enter markets per country.
32
5.2.2 European trends - SC

World coffee consumption has grown steadily around 2.5% per year. Growth is fastest in emerging
markets in Eastern Europe and Asia, and in producing countries [13]. It is estimated that the global
consumption of coffee year 2010/11 was 130.9 Million Bags; consumption referring to imports of 60
Kg bags of green coffee for roasting and packing. Of this total, 69.4 MB were consumed in importing
ICO member countries, 20.5 MB were consumed in non-member countries, and the remaining 41.0
MB were consumed in producing countries [14]. There has been very little growth in coffee
consumption in Western Europe over the last five years, with consumption showing possible declines
[14]. This decline has forced big companies to reduce costs in production by lowering quality to
preserve margins. On the other hand, the same reduction in quality may be responsible for an increase
in the growth of consumption of specialty coffees in Europe [27].
Domestic gourmet coffee

As a result of the global economic crisis, the consumers prefer to drink coffee at home and in this way
have fewer expenses. The roasters are responding to this trend by introducing into the market single-
serve coffee systems (such as Nespresso and Senseo), which make easier to have fresh made coffee at
home, together with the introduction of specialty or single origin products into the main distribution
channels so consumers can now have gourmet coffee at home every morning. Nespresso report a 30%
increase in sales in a year basis since 2006. These premium products give the consumer the possibility
to have a gourmet coffee and the convenience to enjoy the coffee in the comfort of its home, at any
time of the day.
This trend can be seen clearly in developed markets such as Western Europe, North America and Japan
were the high quality coffee is becoming more popular.
Affordable luxuries
Consumers are becoming harder to please, more demanding and are no longer satisfied with just
anything. They are looking for an overall experience, which make them feel their money was well
spent. Luxurious and expensive products are no longer in demand, consumers expect from common
products the highest quality and standards. Consumers have become savvier and are using technology
to research, compare, review and find the best offer. Therefore more than price, intangibles as the
sustainability degree of coffee play an important role nowadays.
There is an on-going focus in the fast food chains sector on selling high-quality specialty coffee that is
the case of Mc Café and Burger King. SCE3 said during the interview “over the past years the European
coffee drinker has become more and more sophisticated, so the demand for delicious coffee is
growing” and the retailers are aware of this increasing opportunity selling coffee everywhere.
Coffee is becoming the next wine

Consumers are interested in recognizing flavor’s and scents. SCE3 mentioned that there is a movement
of special coffee experiences in Scandinavia and Copenhagen in which people are really pushing
boundaries in specialty coffee. They want to become experts and to be educated through the
exploration of their senses about food quality and sensory experience. SCE1 explained “There is a lot
of people talking about single origin, farmers, variety, processing, the freshness, the cup tasting, and
very sensational flavor profiles. That is a very relevant, but in the whole market place is still a very small
movement”. There are every time more coffee connoisseurs who are looking for better coffee
experiences and who are very knowledgeable about different qualities and flavors. They are looking
all the time for more exclusive products.
33
Quest for origin

As a citizen it is hard to know and trace down the food origins and processing. In industrialized
countries people are increasingly feeling alienated from the food sources, as a consequence they want
to connect with the origin as a way to be reassured of the quality of what they drink. Even though
consumers are overwhelmed by unlimited options of certified and sustainable coffee, they just want
to know where and how this product has been produced and handled. More (and better) information,
especially on-line is making consumers aware and more sensitive to the needs of developing (food
producer) countries and to understand the real origin make them feel that they are giving some
support. A global study found that 33% of European and North American consumers are willing to pay
more for products and services that give back something to society [15]. The coffee industry is ideally
relevant for sustainable production and social change. This is what consumers want to see. During field
research was also mentioned by SCE3 “We believe in a more sustainable future for coffee, we pay a
premium price on the quality and we buy coffee mostly through direct relationships with farmers or
with like-minded coffee traders who also believe in the same philosophy, with complete transparency
to the farm level of the producer”. It can be concluded that is aspect is important not just for end
consumers but also for importers.
Continued growth in sustainable and responsible consumption

As mentioned previously, sustainability and CSR practices are a growing trend. A strong trend among
large retailers is to set up their own private standards (Salisbury’s 100% Fairtrade coffee & tea, Albert
Heijn’s Puur & eerlijk, Carrefour’s Solidair, EcoPlanet and Bio, Lidl’s organic brand Fresh Meadow).
These labels facing the customer are rapidly growing and impact directly the growing home
consumption trend described above and reach a niche market interested in knowing where their
products come, under what conditions and the impact of their consumption.
Young adults, serious coffee drinkers

The consumption of cups per day by consumers between 18 and 24 years is an increasing trend. This
market segment have has a different view of coffee, resulting from the coffee cafes culture. That is the
case of Starbucks, which report a 10% growth in sales volume worldwide during FY09/10 and a 6%
increase in the number of stores in EU.
This generation made these cafés their place to socialize and hangout. A clear example is the Starbucks
chain, which improved their coffees with different flavours, creams and flavours, this results in more
appealing coffees for younger generations. SCE1 referred and explained with detail this trend. He
stated that when they started the business, a lot of teenagers did not drink coffee because it was
perceived as a beverage only for the older people. He mentioned “It was very boring, and always the
same kind of house brand supermarket coffee blends”. The interviewed said that this trend started
around 1996 – 2000- 2005 and this was growing within student cities, also from the atmosphere of
being in a coffee house, with music, reading material and socializing. He refers to a new type of out of
home coffee drinking. At the end SCE1 concluded “I think this is one of the trends we have been part
for a long time and it is still very relevant. And I think it will be growing to less cosmopolitan areas.”
5.2.3 Legal Requirements

Complying with the food safety requirements is not as simple as it may sound. The EU’s food policy is
comprehensive and one of the strictest in the world. It ensures that food is traceable throughout the
food chain, from the farm, where the food is grown to the Table SCs, where the food is consumed by
EU consumers (so-called ‘farm-to-fork’ approach). As such, all actors in the food supply chain, including
34
producers and exporters in developing countries, are involved in making sure that only safe food enters
the EU market. [29] The food policy of the EU consists of two basic elements that govern food products
that enter the EU. They are:
Legislation on the safety of the food. (Regulation (EC) 178/2002), also known as The General Food
Law, lays down general definitions, principles, obligations and requirements which apply to all food
brought on the EU market.
Food Control. (Regulation (EC) 882/2004), which lays down the control regime for food. These controls
can be carried out at all stages of import and marketing in the EU.
Within these regulations there are very important aspects to take into account for the SC sector. These
are:
Hygiene management HACCP (Hazard Analysis Critical Control Point) It is a methodology, based on
principles, which food processors, packagers and distributors must use to identify the potential hazards
that can be introduced while the food is under their care. These principles included: Compliance with
the EU microbiological criteria for food; Procedures to achieve the hygiene targets of the Regulation;
To follow procedures necessary to ensure hygiene; Compliance with temperature control
requirements; Maintenance of the cold chain (when required); Sampling and analysis. The safety of
the food upon entry in the EU heavily depends on hygiene procedures practiced during the handling
of the product from production site to the borders of the EU. For this reason, many EU buyers require
their food suppliers outside the EU to practice hygiene procedures equivalent to those established in
the EU.
Food Labelling. Directive 2000/13/EC lays down the requirements of all pre-packed food products sold
in the EU. As from 13th of December 2014; EU Regulation 1169/2011 on the provision of food
information to consumers will apply. Defines the rules about labelling requirements for allergens,
genetically modified food, gluten-free labelling, lot marking, packaging, nutrition labelling, organic
labelling, packaging gas, sweeteners, liquorice, phytosterols & phytostanols, quinine and caffeine.
Above all, labelling food products may not mislead consumers about the characteristics of the product
and attribute health claims without EU authorization.
Packaging and packaging waste. The Directive 94/62/EC rules the materials permitted for all types of
packaging which vary depending on the content of the package; the amount of material used (and
eventually turned to waste); concentration of heavy metal in packaging; reusability, recyclability,
technical specifications and labelling of materials contained in the packaging. These regulations vary
in different countries of the EU (such as UK and Netherlands) especially in terms of the amount of
material used to avoid unnecessary waste.
Maximum Residue Levels (MRLs). Maximum amount of pesticides in food allowed in the EU. Ensures
that pesticide residues don’t constitute an unacceptable SC risk for consumers. It is lay down by the
Regulation EC 396/2005, which is fully harmonized and applies equally in all state members.
Supply and Trends in Colombia - SC

5.3.1 Colombian trends - SC
Specialty Coffees to reach a growing niche market in Europe.
Colombian organizations like FNC and Proexport are aware of the importance of competing with
differentiated specialty coffees. Some strategies like building the retail coffee brand and stores Juan
Valdez Café which has variety in origin, strength, and presentation (soluble, ground, beans, pods,
decaf). There is a recently increased initiative from other smaller parties to sell their high quality coffee
pushed by the low world coffee prices which have been decreasing in the past years (see Image SC 4)
35
and the general concern of coffee growers about, the appreciation of Colombian Peso against the US
Dollar which makes exporting at low market prices an even worse deal. There is a need for
differentiation. The quality and the reputation are already built. Recently, Colombia participated with
organic and specialty coffees and other products in BioFach 2012 in Nüremberg, Germany where they
exhibit the potential and interest in this sector.
Colombian farmers increasing interest to produce Specialty Coffees.

With the recent growth of the specialty coffee market in U.S. and E.U, new opportunities arise for
growers to earn premium prices for their crop, as long as they are willing to adopt the production and
post-handling practices that increasingly informed customers are expecting of them. Lately this new
lucrative coffee niche have been given Colombian growers a new incentive to replace coca production
with alternative crops. The increased income that farmers can receive from specialty coffees
production is driving them to return to this licit crop. Specialty coffee also is a possibility for farmers
that cannot expand the size of their farms, to earn more from the same plot of land. The Specialty
Coffee exported by Colombia has had a rapid growth from 220,000 in 2006 to over 2,000,000 in March
20012. *USAID Specialty Coffee Program (April 2012)
Adoption of CSR practices by producers.

Similar to what happens in many sectors, CSR practices that are visible to the end consumer are a
major trend in many developed countries and perhaps Europe is the forerunner of this trend. The case
of Fair Trade and Sustainable coffees is already very present in supermarkets on products to prepare
at home, and coffee retail chains also use it as a marketing strategy to attract niche market and charge
a premium price. This trend that is generated in importing countries is reflected in producer countries
creating a constant pull to adapt these CSR practices. The interviewed managers of roasted coffee
companies in Colombia believe that to adapt certification schemes will increase the company´s
competitive advantage and this is result mostly of international stakeholders’ pressure. During desk
research data was found that restate this trend. According to the manager of the FNC. The supply of
Colombian coffee with some level of certification has grown rapidly in the last decade. In 2004 the
country had 1.745 certified producers, six years later in 2010 the number increase to around 100.000.
So is clear how Colombian growers are producing coffees through differentiated protocols that are
promoted in worldwide markets to the most demanding consumers.
Increase of exports of Specialty Coffees in South Korea and China.

Colombia has started to trade at an increasing rate to Asia, and in the coffee sector, China and South
Korea are two destinations where exports have increased. New economic agreement like the FTA
agreement with South Korea and increasing exports to China which has always been a traditional tea
drinking nation but whose younger population are gradually adopting western habits are awakening
to this sector. It is expected to grow 7.8% between 2011 and 2016 which taking into the account the
massive population is represents a great potential.
36
Image SC 4 – Price of the Colombian coffee. 2009-2013. Source: Grupo Bancolombia.
Image SC 5 – Colombia’s coffee production of the last four decades. Source:

USDA.
37
5.3.2 Colombian supply - SC

As mentioned in the introduction of this section, the production of Colombian Coffee has decreased in
the last four years mainly due to the weather phenomenon “la niña” and diseases like coffee rust or
“roya” and cherry borer or “broca”. Apart from this, there is an on-going tree renovation program lead
by the FNC that has the near-term effect of lowering output until these trees reach maturity. This has
led to the lowest production in Colombia of the last 40 years. [1] (See Image SC 5) Although 2012
forecasts predicted an even lower production for 2013, the beginning of the year already started to
show an increase in the production for 2013 of 8.5 percent from the previous year to 8.3 million bags
as a result of good weather conditions and the first economically viable harvest of rust resistant
varieties planted in 2010. [2]
Moreover, Colombia is not just a producer of green coffee beans, but also has become a producer and
trader of roasted coffee. Among the main producing regions of roasted specialty coffee stand out
Nariño, Cauca, Guajira, Cesar, Tolima and Huila. The country´s coffee processed industry consists of
129 enterprises, 12 of which almost constitute the big industry and handle nearly 85% of production
for domestic consumption [31]. These roasters market their own brands. The FNC also create one of
these brands “Buencafé” as one of their strategies. As the coffee institution of the country, the FNC
provides technical support to these companies and sells them coffee if it is required.
Colombian coffee is also transformed and utilized by industries of candy, soft drinks, medications and
cosmetics, among others. Currently the types of Processed Coffees produced in the country are,
roasted coffee beans, roasted granulated coffee, decaffeinated roasted coffee, soluble lyophilized
coffee and coffee extracts.
Exports of Colombian Roasted Coffee
As mentioned in the previous section, despite the low production of the coffee sector there is a steadily
increase in exports of processed coffee in recent years. From 220,000 bags of 60 kg exported in 2006
to about 1,800,000 bags of 60 kg in 2012. [32]. The only slight decrease was in 2012 (See Image SC 6),
resulting probably from seven percent decline of green coffee exports because of the sector crisis.
38
Image SC 6 – Exports of processed coffee from Colombia in U$ and Kg worldwide.

Source: Proexport.
This increase in exports of processed coffee can be attributed largely to the work done by the FNC.
Since 2002, the organization designed an added-value strategy, which promotes projects that seek to
generate increased value for coffee producers in the country. This strategy includes several programs;
Specialty Coffee development and promotion, creation of lyophilized coffee factory and the previous
mentioned brand “Buencafé”, and the establishment of Procafecol a company that markets Colombian
coffee with added-value in national and international markets through the “Juan Valdez” brand. These
initiatives of added value and penetration of new segments have resulted in changes in the traditional
coffee exports of the country (See Image SC 7). For the purpose of this study, attention is focused on
the Specialty Coffee program, as the others do not reach the premium characteristics defined
previously.
39
140%
120%
100%
65% 67%
71% 69%
80% 78%
79% 79% 79%
82% 81%
60% 88%
91%
35% 33%
40%
29% 31%
21% 21% 22%

19% 21%
20% 18%
12% 22% 27% 22% 26%
9% 12% 13% 14% 15% 15% 17%
0% 2% 5%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Especiales Valor Agregado Estándar
Image SC 7 – Colombia: Exports of standard coffee and with added value 2000 – 2001 (millions 60kg
bags) Source: FNC
The National Federation of Coffee Growers (FNC) estimates the surplus returned to growers for
specialty coffees by 2011 in US$ 125,7 million. This represent a considerable growth compared to the
9,1 million of 2003, as part of the strategy of the main coffee organization in Colombia in bring added
value to the product and the sector that has been hurt in recent years. [21] (See Image SC 8)
140
125.7
118.1
120 107.6
100
85.8
80
63.9
60 47.8
40 34.6
22.2
20 9.1
0
2003 2004 2005 2006 2007 2008 2009 2010 2011
Image SC 8 – Surplus paid to coffee farmers for Specialty Coffees in Million US$. Source: FNC.
40
Colombian Processed Coffee Exports destination

The main export destinations for Colombian Processed coffees worldwide are the US (39%), Mexico
(15%) and Russia (13%) (See Image SC 9). Is important to note that three Latin-American countries
Mexico (15%), Ecuador (5%) and Chile (4%) import a considerable volume of Processed Colombian
coffee.
An interesting finding was that the EU/EFTA countries that buy more processed coffee from Colombia
are not in every case the same ones with the overall greatest consumption or the ones that import
more green coffee beans in the EU. Although the first two buying countries of Processed Coffees from
Colombia are Germany (53%) and the U.K. (13%) which might be expected, the following ones Belgium
(13%), Poland (8%) are not. Denmark (4%) with a population of 5,5 million and France (4%) with a
population of 65,5 million, surprisingly represent the same percentage (See Image SC 10). There is no
correlation (except maybe for the top two) between the population and the percentage in purchase
within the EU/EFTA, nor with the purchasing power of the country.
Denmark Poland France Canada

2% 2% 1% 1%
Japan
Belgium 2%
2%
URSS
4%
Chile
4%
U.S.
39%
Ecuador
5%
Germany
10%
Russia
13% México
15%
Image SC 9 – Colombian Processed coffee exported worldwide in percentage (2012).

Source: Proexport
41
Belgium
13%
Poland Denmark
U.K. 8% 4%
13% France
4%
Spain
2%
Sweden
2%
Italy
1%
Czech Republic
0%
Netherlands
Austria 0%
0%
Germany
53%
Image SC 10 – Colombian Processed coffee exported to EU/EFTA in percentage (2012).

Source: Proexport
It is important to highlight that despite the growth in exports that the Colombian processed coffees
are having, the exports to EU are decreasing. A part from Germany (3%), Italy (21%) and Czech Republic
(105%) which had an increase the rest of the EU/EFTA countries, have had a decrease in exports of
these products. The exports have practically increased and decreased every other year. This shows
how the commerce with EU/EFTA does not a match with the increasing production of roasted coffees
in the country (See Image SC 11).
The exports of these products to the EU market are still considerably low, compared with the exports
of green coffee to the EU which account for U$ 688.210.000.[3], or to exports of processed coffees to
the U.S. At the time of the interview, SCE8 proved this fact. According to them, Poland was the country
where they had more experience in exports, while Germany, France and Scandinavian countries are
their main targets for the near future.
42
8.000.000
FOB US$ exported of Toasted & toasted decaffeinated
7.000.000
Belgium
Denmark
6.000.000
Spain
Estonia
5.000.000
Finland
France
4.000.000
Italy
Lithuania
3.000.000 Netherlands
Poland
2.000.000 U.K.
Czech Republic
1.000.000 Sweden
0
2009 2010 2011 2012
Image SC 11 – Colombian Roasted and roasted decaffeinated coffees exported to

EU/EFTA in FOB US$ (2012). Source Proexport
Source: Proexport
As mentioned previously, Colombia has traditionally exported more Coffee to United States, the
experts interviewed consider Europe a better destination for Specialty coffees. SCE8 considers that
“Europe knows better the product; is better developed in specialty coffees than the US.” SCE6 believe
that “Europeans are better educated about coffee”, and in general, experts interviewed in Colombia
see Europe as a market with a great potential which has been underexploited and where there is a lot
to learn but also a lot to get from.
To further increase the exports of processed coffees there is a need for an increase in Colombian
roasters aimed at exports, knowledge of roasting types and technification, together with knowledge
of what the European market wants in roasting in order to successfully supply this market.
For a country like Colombia, undergoing economic development is a profiTable SC business to
commercialize products with added value, not just because of the increased revenues that they
represent, but also for their contribution to employment growth and technological developments,
which benefit the producers. Furthermore, Specialty Coffees enhance the implementation of
sustainable techniques, and therefore become an important alternative to solve the harvest and
postharvest challenges faced by growers
43
5.3.3 Overview of competitors

Until now, there is not a general agreement on what constitutes specialty coffee is difficult to quantify
how much is produced, how much is consumed or how much is imported/exported. So to accurately
establish who the competitors within the sector are, is also a difficult task because the numbers vary
according to what is considered as specialty coffee. In this section the competitors were divided into
three segments considered the most relevant to specialty coffee.
According to the general consensus seems to be that the specialty coffee in all its forms can count for
about 10% of global consumption. Developed countries exported in 2010 the 96.7% of global roasted
coffee despite the fact that almost no coffee is produced in these countries (See Table SC 2). This
suggests that while developing countries are the main producers of coffee green beans, the roasting
process and manufacture of the final product is done in developed countries. This indicates that
roasted coffee exports are still a limited market for developing countries and deprives these countries
of receiving premium prices and advantages participating higher in the global value chain.
Exports ($billion) Share in world exports (%)

Level of
Processing Developed Developing Developed Developing
World
countries countries countries countries
Not Roasted 17.38 1.54 15.84 8.9 91.2
Roasted 5.78 5.59 0.19 96.7 3.3
Table SC 2 – Worldwide exports of not roasted and roasted coffee. Source: Trade map
The roasted coffees of high quality are generally considered the specialty coffees. This industry is likely
to have an increasing differentiation between the commercial product and the specialty artisan
business. Both can be successful, but seems that the specialized segment of the artisan coffee has
experiential characteristics that makes it move away from the commercial one. This may represent an
added value for developing countries trying to compete with large European roasters as Colombia.
Under these circumstances competition for specialty-processed coffees in EU was classified between
Macro-roasters or the industrial business, Micro-roasters referring to specialty artisan business and
coffees that are processed/roasted in the country of origin.
Macro-roasters (See Table SC 3), are large multinational companies that usually supply low-cost
generic products in supermarkets or in cafés with their own brands. In recent years these companies
have been paying attention to what specialty coffee is doing. For instance Douwe Egberts now is
offering seasonal coffee while Lavazza and Nespresso are making coffee pods. These companies are
now focusing more on freshness, styles and trends. The increase of specialty coffee in a multinational
scale will probably continue for the coming years. These large international players are dominating the
coffee trade and compete with them is a difficult task. What usually happens is that these giant
multinationals will buy new and attractive brands and become bigger and bigger.
44
Germany Italy Netherlands

Macro-roasters Lavazza (premium Douwe Egberts (roaster &
Kraft foods (large market roaster) market leader in country)
player) Segafredo (premium Cook & Boon Koffie
roaster) (roaster)
Illy Café (premium "De Drie Mollen" (larges
Melitta (roaster)
roaster) EU provate label roaster)
Tchibo (Importer & Mauro Demetrio SpA Smit & Dorlas
roaster) (large roaster) Koofiebranders (roaster)
Table SC 3 – Main macro-roasters in Germany, Italy & the Netherlands
Micro-roasters are artisanal small to medium sized companies (See Table SC 4). Are characterized for
having a gourmet approach, which means that attention is paid to every detail. Recently these types
roasters began to find direct trade as a way to lower their costs while still providing quality. By going
directly to the origin, they will reach agreements make with the growers to ensure a supply of quality
beans and be less influenced by coffee brokers. These companies may represent direct competition
for Colombian processing companies but may also be interested in distributing their products because
besides roasters they are sometimes also traders. The competitive advantage that these micro-
roasters have is that they are regional; so they know well the local market. This could represent a
disadvantage for Colombian companies that try to enter to the same market and compete with them.
Germany Italy Netherlands

Hochland Kaffee (roaster Caffé Agust (importer & Algra Mocca (premium
Micro-roasters
& supplier) roaster) roaster)

Bonafede (roaster & Mokito Spa (roaster and Neuteboom (roaster &
trader) supplier) supplier)
Caffé Kimbo (Trader & Simon Lévelt (Certified
roaster) coffee roaster)
Quijote Kaffee (roaster)
Bocca Coffee (Certified &
Caffé Costadoro (Roaster) Fairtrade roaster)
Table SC 4 – Important micro-roasters in Germany, Italy & the Netherlands
Coffees processed in the country of origin, refers to other developing countries exporting to the EU
market. According to the CBI study Roasted coffee in the EU: a road less traveled for DCs, Colombia
occupies the fourth place in exports of roasted coffee from developing countries to the EU with 6.9%
after Brazil (39%), Bosnia and Herzegovina (11%) and China (7.4%). For these countries to enter the EU
may represent a huge challenge, however a differentiator that they might have is to offer sustainable
and single origin coffees.
45
Logistic
Price Levels Quality Levels Volume Levels
Costs
COLOMBIA MICRO-ROASTERS BASE BASE BASE BASE
Micro-roasters Macro-roasters Micro-roasters

Hochland Kaffe (roaster &
supplier) lower (-) lower (-) equal (=) lower (-)
Bonafede (roaster &
trader) lower (-) lower (-) higher (-) lower (-)
Quijote Kaffee (roaster)
equal (=) lower (-) equal (=) lower (-)
GERMANY
Kraft foods (large market
player) lower (-) lower (+) higher (-) lower (-)
Melitta (roaster)
lower (-) lower (+) higher (-) lower (-)
Tchibo (Importer &
roaster) lower (-) lower (+) higher (-) lower (-)
Caffé Agust (importer &
roaster) equal (=) lower (+) higher (-) lower (-)
Mokito Spa (roaster and
supplier) equal (=) equal (=) lower (+) lower (-)
Caffé Kimbo (Trader &
roaster) lower (-) lower (+) equal (=) lower (-)
Caffé Costadoro (Roaster) higher (+) equal (=) higher (-) lower (-)
ITALY Lavazza (premium
Macro-roasters

Segafredo (premium
Illy Café (premium
roaster) equal (=) lower (+) higher (-) lower (-)
Mauro Demetrio SpA
(large roaster) lower (-) lower (+) higher (-) lower (-)
Algra Mocca (premium
Micro-roasters
roaster) equal (=) equal (=) equal (=) lower (-)

Neuteboom (roaster &
supplier) equal (=) equal (=) equal (=) lower (-)
Simon Lévelt (Certified
coffee roaster) lower (-) equal (=) higher (-) lower (-)
Bocca Coffee (Certified &
Fairtrade roaster) equal (=) equal (=) equal (=) lower (-)
NETHERLANDS
Douwe Egberts (roaster &
Macro-roasters
market leader in country) lower (-) lower (+) higher (-) lower (-)
Cook & Boon Koffie
(roaster) lower (-) lower (+) higher (-) lower (-)
"De Drie Mollen" (larges
EU provate label roaster) lower (-) lower (+) higher (-) lower (-)
Smit & Dorlas
Koofiebranders (roaster) lower (-) lower (+) higher (-) lower (-)
Table SC 5 – Competitor Analysis
Table SC 5 shows the comparison of the previous mentioned competitors with Colombia as a base.
“Lower”, “higher” and “equal” represent how the performance indicator in that country is in relation
to Colombia. The positive (+) or negative (-) signs represent if this difference is positive or negative in
terms of competitiveness.
46
5.3.4 Opportunities for the SC sector.

Colombia has an already gained reputation as a producer of top quality coffee. This reputation appears
to be greater in United States than in Europe. These following aspects can translate into big
opportunities for more penetration and success of Colombian Processed SC in the EU. Mainstream
coffee drinkers and quality coffee drinkers are dividing in Europe in the later years. This marks an
opportunity to invest in a niche that is getting gradually more differentiated between the general,
mainstream coffee of an increasingly low quality and decreased consumption and a higher quality
specialty, niche product of increasing market. This sets fertile ground for Colombian specialty coffees
further incursion in EU/EFTA countries and expansion to other regions.
 The European end-consumers are gradually becoming more aware and interested in CSR
issues. In coffee this practices can be also associated with higher quality. By embracing this
CSR and making it visible to the customer can build a stronger relationship with the customer.
 Colombia has several coffee regions with different climate and altitude conditions which make
the country really unique to produce really differentiated specialty coffees of origin. If these
differences are well communicated and positioned in Europe, together with CSR labels there
can be a greater impact in niche high quality markets.
 Many EU customers in different sectors are interested in the story behind the products they
buy. As SCE8 mentioned, “people want to know what they are consuming”. This goes hand in
hand with CSR practices but applies more to the product of specific origin.
 Organic coffee is starting to develop in some regions like Sierra Nevada but the experience in
this aspect is less that with CSR practices and labels. Europe is a forerunner in organic trends,
and with the help of CBI this type of specialty coffee can be can develop even further for this
niche market.
 There is opportunity for improvement in packaging to meet the European standards and sell
the product to right target market. It is not only about a great product, but how that product
is perceived. In this aspect Colombian standards are quite lower than European. Convincing in
the importance of design, branding and packaging is necessary to give the right impact in a
demanding, higher priced market. Quality has to be perceived and communicated first and
then proven with the product.
 Specialty coffee in Europe focus in quality rather than volume. Quality is the strong point of
Colombia while volume is decreasing. The issue is that this quality is not necessarily known by
the end consumer due to old time strategy in selling green for improving blends. Marketing to
communicate this quality is a job BSO and government in Colombia have to work on as SCE5
suggested.
 Incursion in other growing markets such as Eastern Europe and Russia, which has increased
interestingly its consuming habits from mainly low-quality soluble coffee to increase the
consumption of roasted coffees. This marks a gradual shift to higher qualities. For this Europe,
and Netherlands in particular can play a crucial role as commerce contact and partner.
47
5.3.5 Opportunities in markets outside Europe
 USA/Canada: all sized-roasters, whereby the gourmet roasters have high interest in high-
quality Colombia Coffee.
 Japan: In general all sized-roasters buy higher quality coffees, however the last 2 years the
premiums paid by Japan are declining.
 Russia: Growth in higher quality coffees from soluble to roasted. Increased from 15% to 20%
roasted coffee. 80% is soluble. Per capita consumption decreased but better quality
consumption increased. Previous Image SC 9 shows that is currently the third country where
Colombia is exporting more processed coffee, after U.S. and México.
 China: Is a very attractive market for specialty coffee businesses. Because is the world´s
densely inhabited country and even if it has been traditionally a tea drinking country, the
younger generations are switching to coffee. For the last 15 years coffee consumption per-
capita has been on rise.
Export Value Chain – Specialty Coffees
After having presented the general overview of the SC sector, the European demand and its supply
situation in Colombia and the trends in the sector on both sides, a visual representation of the Value
Chain was created to analyze the interconnection of different aspects along the value chain in this
sector, stakeholders, bottlenecks and assets.
Image SC 12 presents graphically the structure of the value chain. In this Image SC we have
represented the following information as follows:
• Value chain pillars indicating the sequential touch points in the chain.
• Stakeholders which have a role in every one of the pillars.
• Bottlenecks that hinder Colombian exports of the coffee sector.
• Assets of the Colombian TF&F sector to successfully export to Europe and the world.
 Most crucial pillars that contain the most important bottlenecks according to experts (marked
in light gray).
48
5.4.1 Specialty Coffees: Value Chain Analysis
Image SC 12 – Value Chain for Specialty Coffees.
49
Overview of stakeholders
5.5.1 Stakeholders – Actors
The actors for this sector have been divided between Exporters, on the Colombian side, and Importers
from Europe. Exporters are either companies that roast coffee for export who buy their coffee from
selected farms or cooperatives of growers; or growers specialized in producing high quality single
origin specialty coffee. Importers are classified in Coffee houses, those who sell prepared coffee to be
consumed on the spot or to go or who sell a selection of coffees by origin to be consumed at home;
Gourmet markets, those grocery stores specialized in gourmet products; Organic shops, selling only
organic products: Roasters of SC’s and traditional Supermarkets. In the case of supermarkets, Specialty
Coffees are practically 100% certified with some kind of CSR label. In the case of Sainsbury’s in the UK,
100% of their coffee sold is Fair Trade. Table SC 6 shows a sample of these exporters and importers on
both sides.
Procafecol CO
Café Quidío CO
Café San Alberto CO
Café Azahar CO
Café Ginebras CO
E&D Café CO
Roaster Amor perfecto CO
Café Sierra Azul CO
Café Tayrona
Exporters
CO
Cafés Baque CO
Cafés el Abra CO
Coffee Gold CO
Dia CO
Finca el Resumidero CO
Coop. Caf. Manizalez CO
Coop. Caf. Antioquia CO
Cafexcoop CO
Growers
Finca el Descanzo CO
El Tesorito CO
Actors
Finca Primavera CO
Finca el Aguacate CO
Simon Lévelt NL
Coffee Company NL
Coffee House Artisan Coffee UK
Dethlefsen & Balk DE
Cafés el Magnífico SP
Marqt NL
Wholefoods market UK
Gourmet Market Kochhaus DE
Importers
Lafayette Gourmet FR
Casa Gispert SP
Eko Plaza NL
Kate's Organic Market SW
Organic shop Bio Prestige FR
Naturalia FR
SUperBioMarkt DE
Albert Heijn NL
Tesco UK
Supermarket Aldi DE
Lidl DE
Carrefour FR
Table SC 6 – Stakeholder Table SC (Actors)
50
5.5.2 Potential Colombian companies with interest in CBI programme

According to the FNC, there are 77 companies currently exporting roasted coffee. These companies
meet the CBI criteria of processed specialty coffee since the product they export is already processed
and packed for consumption instead of the traditional green coffee. A complete list of these companies
can be found in Appendix SC1.
The companies in Table SC 6 are an illustrative sample of selected companies with export experience.
There was found that in Europe largest roasters rely on traders for their supply rather than dealing
directly with producers or producer groups. Trading companies are large players and are the closest to
the farmer therefore they have to secure quality of production and volume. Therefore these
companies established different guidelines to acquire sustainable coffee and are involved in the design
and implementation of training programmes to improve and protect the economic, social and
environmental conditions at the beginning of the value chain. In this way they can help to increase the
production of sustainable coffee.
5.5.3 Stakeholders – Supporters
Corpoica CO
Knowledge
SENA CO
Chambers of Commerce CO
Proexport CO
Commerce
CBI NL
BSO's General
Sippo CH
IDH NL
Sustainability
CSR Europe BE
Occicafé CO
Asoexport CO
Comitato Italiano Caffe IT
Guild
Associazione caffè Trieste IT
Deutscher Kaffeeverband DE
ACAFETO CO
BSO's Sector
SCAE EU
Supporters
Quality FNC CO
Kaffe.no NW
Table SC 7 – Stakeholder Table SC (Supporters)

Supporters are divided in Table SC 7 between BSO’s who support companies in general and sector-
specific BSO’s. The BSO’s general in this Table SC are either Knowledge providers for different sectors
(in agriculture, technical training, etc.), organizations dedicated to facilitate Commerce on either side
of the value chain, and BSO’s that look after Sustainability practices in multi sectors without favoring
51
a particular label. BSO’s for the sector are sector Guilds (for SC in particular such as Occicafé and
Asoexport in Colombia; or Deutscher Kaffeeverband and Comitato Italiano Caffe in Europe.) and
Quality assurance BSO’s (such as FNC in Colombia and SCAE in Europe).
There are many associations in Colombia for growers especially, these are the ones that were more
dedicated to specialty coffee production and export and had considerably larger size.
A more detailed list and explanation of these supporter organizations can be found in Appendix SC2.
5.5.4 Stakeholder – Influencers
ICA CO
FNC CO
DIAN CO
Policy
Antinarcotics CO
National
Min. Agricultura CO
Incoder CO
Bancoldex CO
Influencers
Finance Banco Agrario CO

Analdex CO
Knowledge Cenicafé CO
CVC CO
Sec. Agriculture CO
Corpoantioquia CO
Local
Policy CARDER CO
CRQ CO
Corponariño CO
Cortolima CO
Table SC 8 – Stakeholder Table SC (Influencers)
Influencers are those organizations that have a strong influence in the sector’s policies or provide
financial aid to this and other sectors. Their politics can facilitate or difficult exports in general and they
are normally located at a government level. These Influencers are divided in those who influence at a
National or Local (regional) level. In the first group, governmental organizations can be found such as
Ministries, tax agency (DIAN), rural development (Incoder), and agricultural sanitation and supplies
(ICA). The regional entities are mainly CAR’s (Regional Autonomous Corporations) and Secreataries of
Agriculture. The Knowledge influencers are these organizations dedicated to the research and
development of the sector (Cenicafé in this case). The Finance influencers are at a national level and
they provide financial support for entrepreneurship towards exports in general (Analdex, Bancoldex)
or specific for the agricultural sector (Banco Agrario, Finagro). These entities are big and complex and
often subject to state bureaucracy. Nevertheless, their politics affect directly the development of the
sector. (See Table SC 8).
A more detailed list and explanation of these influencers can be found in Appendix SC2.
52
5.5.5 Main Stakeholders

Image SC 12 shows a complete view of the value chain, the pillars, bottlenecks and the stakeholders
related with the pillars and bottlenecks listed. Based on information gathered from desk and field
research the following stakeholders where listed as the most relevant for solving the listed bottlenecks
taking into account CBI’s scope and reach.
Table SC 9 shows these stakeholders classified in how interested would be in joining a CBI program;
and the influence these stakeholders could have in the resolution of those bottlenecks through a
programme.
Interest of stakeholders in the Influence of stakeholders in the

Stakeholders program program
1 CBI HIGH HIGH
2 PROEXPORT HIGH MEDIUM
3 ICA MEDIUM HIGH
4 COOPERATIVES MEDIUM HIGH
5 CENICAFE MEDIUM HIGH
6 SCAE LOW HIGH
7 FNC LOW HIGH
8 SENA MEDIUM HIGH
9 CORPOICA LOW LOW
10 MESA TÉCNICA MEDIUM HIGH
11 UNIVERSITIES MEDIUM HIGH
Table SC 9 – Stakeholder interest and influence
The information in Table SC 9 helped to organize the following Image SC 13, which places the
stakeholders in an assessment grid using the criteria mentioned previously as the X & Y axis and whose
position indicates the type of interaction and involvement in a CBI programme the stakeholder should
have.
53
10
00
2 1
11
8
9 7
Image SC 13 – Stakeholder assessment grid.
Overview of the main bottlenecks

The Value Chain Graphic shows a number of bottlenecks that hamper the development of the sector
in its goal of incrementing exports to the EU/EFTA countries. The following Table SC shows the most
relevant bottlenecks according to desk research and experts interviewed taking into account the
possibilities and programmes of the CBI. The Table SC specifies if a certain bottleneck is critical, can be
solved in short term (4 year period), which organization(s) can provide the solution to that problem,
and the possibilities of the problem not being solved in the short term. (See Table SC 10)
54
PROCESSED SPECIALTY COFFEES

Short
Observed Risk of NOT being
Critical term Organization providing
bottlenecks in solved in short
(Y/N) Solvable solution
VC term
(Y/N)
Small
producers can't
N Y CBI/COOPERATIVES/ MID
afford CSR
lables.
CBI/CORPOICA/CENICA
Technical FE/
Y Y MID
assistance SENA/UNIVERSITIES/M
ESA TECNICA
Few roasters
N N CBI/FNC/SCAE HIGH
FOR EXPORT
Little
differentiation CBI/PROEXPORT/FNC/
Y Y MID
in qualities SCAE/MESA TECNICA
levels/types
Low quality in CBI/DESIGN
Y Y LOW
packaging STUDIOS/PROEXPORT
Branding/mark CBI/PROEXPORT/SCAE
Y Y MID
eting in EU /
Lack of market
knowledge of Y Y CBI/PROEXPORT LOW
the EU
Contact with
specialized Y Y CBI/PROEXPORT/SCAE LOW
niche buyers
Table SC 10- Value Chain constraints analysis.
Overview of opportunities for Value Chain Development

The bottlenecks discussed above in this report represent difficulties for the sector in competing in the
European market. These main bottlenecks, if solved, can create a big impulse to the sector and increase
the positioning and sales of Colombian SC’s in Europe. Table SC 11 shows these bottlenecks, why do
they difficult exports, how can the problem be tackled (with the help of CBI) and which CBI module can
address this issue.
55
PROCESSED SPECIALTY COFFEES

Can it be addressed
Observed Why does it difficult
How can it be solved? by a CBI module? If
bottlenecks in VC exports?
yes, which?
CSR labels are a
Implement labels in coffee
growing trend for
grower’s cooperatives. Share
Small producers exports to Europe. Not
expenses between EU buyers ECP Certification
can't afford labels having them can limit
and CO producers. Negotiate a
access to certain niche
premium price.
European markets.
Most growers are small
Providing technical assistance
with small capacity
Technical assistance in increasing productivity ECP Export Capacity
needing more
in production without compromising quality Building
production efficiency
from a single farm.
to meet EU quantities.
Creating awareness of the
Most BIG roasters advantages of exporting
product is for local roasted. Requires investment
consumption, and in roasting capacity,
Few BIG roasters ECP Export Capacity
don’t meet quality machinery and training in
production FOR Building/Business
requirements for different roasting techniques.
EXPORT Development
Europe. Micro roasters Roasted SC for export is not
are producing specialty high volume, therefore big
coffees for export. local roasters are not a
necessity at the moment.
Differences in qualities Through communication BSOD Export
Minimal and types are not well strategies and sector branding, marketing &
differentiation in communicated. tastings in gourmet niche Management / ECP
quality levels/types Customer is not aware markets, and strategic Market Entry/MI
of them. partnerships in EU. Export Intelligence
Train producers and exporters
in packaging design and
development. Support the
development of high
packaging standards. Develop
Lack of design and
technical guidelines for
branding in packaging
successful packaging. ECP Export Capacity
Low quality in can make an excellent
Encourage packaging Building / HRD
packaging product look cheap.
development in partnership training on labeling
Lowers the overall
with educational institutions.
quality of the product.
Provide examples of good
packaging design and
materials in Europe.
Investment in packaging
design & branding.
56
Investment in specialty fairs.

Promote the product as 100%
roasted Colombian coffee, and
organize tasting events of
these varieties of coffee.
ECP Export Capacity
Strategic partnerships in EU.
Building/Market
Processed/specialty Country specific / per region
Entry – MI Market
Branding/marketing coffees from Colombia market strategy. Promote the
Intelligence – BSOD
in EU are not well known in hand-made production
Export
the EU. processes in the country.
Development and
Develop a certification
Promotion
programme for 100%
Colombian roasted coffee.
Develop promotional events
for SME´s. Support strategic
alliances.
Market studies in trends and
HRD Market Access
country specific information
Requirements,
for the sector. Educate in
Many countries have Market Research,
market access requirements
different EXPRO / ECP Export
for different countries.
Lack of market characteristics. No Capacity
Support for international visits
knowledge of the strategy to approach Building/Market
of SME´s to the EU as well as
EU Europe per country. No Entry – MI Market
agricultural field trips to
knowledge of likes and Intelligence – BSOD
Colombia. Identify and define
trends Export
the productive capacity to
Development and
determine clients and markets
Promotion
according to it.
Support creating networks,
meetings and trainings to
Buyers are not familiar connect the right buyers with
Contact with with specialty coffees the producers in Colombia.
BSOD Export
specialized niche from CO, therefore Better promotion of the sector
Intelligence
buyers other options are more and differences in origin. More
frequently considered presence in More presence in
Baristas' events, organizations
and trainings.
Table SC 11 – Solution design.
Validation Sessions in Colombia with company experts and BSO’s defined 4 bottlenecks as the most
important ones from this shortlist. These bottlenecks where chosen taking into account the CBI’s
capabilities and scope of their programs. These bottlenecks are:
 Low Quality in packaging
 Branding/marketing in the EU
 Lack of market knowledge of the EU
 Contact with specialized buyers
57
The description of their importance and the solutions proposed and discussed can be seen highlighted
in bright pink in Table SC 11.
For a future program, the main CBI would need certain BSO’s to be involved in the programs. Some of
these must be partners from the beginning; some would come at certain specific stages, but are
certainly important for the success of the programs in the SC sector. These are:
From start:
 Proexport: Partner for all programs for all the sectors. Responsible for promoting exports from
Colombia. They have and active role from the beginning in selection of companies, motivation
to those participating and main contact with Colombian exporters.
 FNC: The National Federation of Coffee Growers (Federación Nacional de Cafeteros) is the
main ruler for the sector in Colombia. They represent and protect the brand of the Colombian
Coffee to the world and look after the quality of the product to be exported. They will play
more of a passive role in the beginning of the programs and will pass to become active when
their assistance, regulatory and technical knowledge is needed. Overall, it will be important to
keep them informed about the programs for the sector from the beginning.
 Chambers of Commerce/ Corfecamaras: There are many coffee regions providing SC’s and they
are not associated as such in the country, but they are more likely to associate per region or
municipality. These municipalities have their own independent Chamber of Commerce. All
chambers of commerce are represented by Corfecamaras. Their role would be to help contact
and unite SC roasters, and bring first-hand experience from different ex exporters while
participating in the programs.
At later stages:
 SCAE: The European Entity would enter to play a role in later stages of the program when
needed. Roles would be to connect with European buyers, help to get European information
in trends, consumption, and preferences per country and to help to communicate the SC’s
from Colombia within Europe.
 UTP (Pereira Technological University): This university located in the coffee region in Colombia
has broad knowledge on SC’s. The Technical board is located there. Their role would be
technical in certain programs or stages when technical assistance is required.
 Technical Board (UTP + several technical stakeholders): Union of several technical stakeholders
that are more aware origins and processes for SC’s. Their role would be technical in certain
programs or stages when technical assistance is required.
 Universities: In other coffee regions outside the main coffee region (Eje Cafetero) the
universities can be of great technical assistance and possess specific knowledge for their
region. Their role would be technical in certain programs or stages when technical assistance
is required.
 SENA: Main organization of the government dedicated to provide technical and professional
learning to all productive sectors in Colombia. Mainly technical role at certain stages of certain
programs.
5.7.1 Opportunities SC
Colombia can offer a very diverse range of specialty coffees and has potential to grow as a multiple
regional center for coffee, quality, production processes, favorable geographical location and the
experience in the sector.
58
Market the diversity through a country strategy

Bring buyers and final customers to an exploration of regions and altitude conditions country have to
offer and which make possible the production of diverse coffee origins. For this the country can be
basically divided in three main zones for specialty coffee production, Northern, Central and Southern.
All these regions have different climatic, topographic and cultural differences, which could be
marketed.
 Central (Caldas, Risaralda, Quindío, North of Valle, Antioquia, Cundinamarca and north Tolima)
Dry and wet periods throughout the year. Coffee produced have fruity and herbal
characteristics
 Southern (Nariño, Cauca, Huila and south Tolima) Very close to the equator and coffee is
produced at lower temperatures. Coffee has increased acidity, medium body and smooth
flavor with citric and sweet characteristics.
 Northern (Magdalena, Casanare, Santander, Santander North) In this region the coffee is
grown at lower altitudes and higher temperatures, therefore crops are more exposed to
sunlight and protected by different levels of shade. This coffee has medium acidity, the flavor
has nut and chocolate characteristics, and it has more body.
Promote the handmade processes that help to reach premium quality

There is a lot of knowledge, tradition and hand-made (manual) processes to produce different varieties
of coffee. Improve the quality of information communicated and transmitted to importers and final
consumers. This will certainly give added value of the final product. Highlight that harvesting coffee by
hand results in a higher-quality product as well as higher involvement of coffee growers in the industry.
Creating in this way greater social impact to them and their families. This represents a response to the
increasing social awareness of European consumers.
Relate and make a link between CSR issues and origin regions
Each of the regions of Colombia is very diverse in terms of political, social and economic situation.
Because of this diversity development plans in the country are orientated to generate solutions and
growth per regions or clusters. It is important to work with these entities to understand the current
and future plans about the development of each region in order to generate greater impact and
generate sustainable growth. This can orientate and guide the search and choice of participants and
stakeholders for the various programs were CBI can participate or to align future strategies.
Support the creation of new contacts to strengthen a network of connections

Currently producers and SME´s are limited to sell to few importers. These limited relations harm both
sides, producers and roasters because they are not able to maximize their sales and profits. On the
other hand buyers are not able to expand their input volumes in order to supply their clients. The end
result is the decrease in productivity. CBI can enable different moments to support creating networks,
meetings, trainings, workshops, agricultural field days, international networking safaris. Open
moments to exchange contact information to later do businesses.
Support ready to export companies to enter EU market

During field research was found that some new brands are ready and willing to export their products.
But they are searching for markets different from EU because they perceive the region as highly
59
saturated, with a lot of competition and many strict regulations. Even though they have the product
and characteristics to be successful in the EU market they are not sure of how and where to start. CBI
can guide and accompanying process, where SME´s get acquainted with the EU market variety and
characteristics to develop an entry strategy. In this way SME´s can reassure their qualities, adjust
products, develop strategies and be ready to compete. Knowing where to go and planning how to get
there will help these companies to grow in abroad markets.
Learn and share overseas experiences and knowledge

BSO´s and associations representatives have a clear vision of challenges that the national sector is
facing. Support and organize visits, workshops and conferences in order to learn from others with
similar issues in other parts of the world. Invite to face-to-face encounters to understand other realities
and innovate later in a collaborative ways. This will lead to create new contacts, connections and
networks in which is possible rely or work together afterwards. E.g. topics relevant to climate
conditions planning, financing, international cooperation programs etc.
Corporate Social Responsibility

Corporate social responsibility (CSR) is a form of corporate self-regulation that companies generally
incorporate in their business model. Refers mainly to economic, social, environmental and ethical
criteria that help a company to monitor and ensure the compliance with legal requirements, ethical
standards and international norms. CSR is a process that seeks to create awareness and sensitize
companies in their responsibility when acting or taking decisions, in order to generate a positive impact
in the society through its activities. During this study the criteria refers to create more sustainability in
coffee plantations, roasting companies and the coffee sector in the country.
The first criteria “economy” aims to develop an economically sustainable business finding the balance
between land productivity and consumer demand for products.
The expansion of the coffee sector in the twentieth century had strong multiplier effects on the
Colombian development process; it offered the possibility of using surplus land and labor. It stimulated
the growth of the industrial sector and gave a boost to finances, trade, transport and the services
sector. But as mentioned above the Coffee sector in Colombia, has gone through tough times in recent
years. Weather conditions and pests, competition from other countries and the low prices in coffee
market with a Colombian exchange rate has impaired the profit margins for many small farmers. The
previous conditions were combining to deteriorate the potential of the most mature agricultural sector
in the country. There is a matter of national pride in the sector and a necessity to bring it back to a
healthier state.
Recently, around 50,000 coffee farmers marched in protest for what they consider a lack of support
from the government in solving the addressed issues and protecting the income of all these families
who now see it unprofitable SC. For many coffee growers, the current situation is the worst they´ve
seen in decades. Negotiations were held and some agreements were made, one of those the payment
of PIC (Protección al Ingreso Cafetero) which benefits mainly medium and large farmers. Therefore
there is still discontent from small farmers who are the most affected struggling with low prices and
low exchange rates. Recovering this sector and creating a better life condition to these families will
have great impact in the most important agricultural sector in Colombia.
The social criteria emphasizes relationships of stakeholders both in internal environment (with
fulfillment of legal duties to shareholders and employees of the company) as in the external
environment (customers, communities, society in general, government); in addition, it must also
impact on the entire productive chain; promoting the generation of direct and indirect jobs, and
creating programmes or projects that promote the sustainable production and processing of coffee.
60
Historically the sector has had significant importance as a source of job creation and development not
just for the growing regions (which concentrates the most rural population) but of the entire country
and it represents a model to follow for other agricultural sectors. There are in the country 563
thousand Colombian coffee growing families, of which 96% are conformed of by rural families that
have less than 5 hectares of coffee plantations (averaging 1.5 hectares/farmer) [19]. This small farm
size translates into a modest household income for coffee growers. While their farms are small,
Colombia´s coffee growers have access to technical assistance and credit and FNC guarantees market
for their product. Due to the high degree of institutionalization, the coffee sector in Colombia has
successfully implemented programs to guarantee the Colombian origin of its coffee.
FNC is actively involved in the welfare and social development of the coffee producers. These programs
vary according to their purpose: education, health and infrastructure. During the past five years, the
organization invested over U.S. $38 million in education for Colombian coffee growers. Such is the case
of the programme “Escuela y Café” with the aim of incorporating coffee related topics into the
curriculum of primary and secondary schools with the objective to educate the next generation of
coffee growers. FNC also invests in education through training programs on the analysis of coffee
production, as well as issues related to business administration, that aims to increase profit margins.
On the other hand increasingly, young Colombians are abandoning their rural villages to look for jobs
in the cities, preferring to sell merchandise or have an informal business rather than staying in their
family´s farm. For them is not attractive to stay in the field and there is a risk of losing an entire
generation of young workers, because they do not see how the coffee growing can be a real business.
Is necessary to create incentives to keep workers from moving to somewhere else with even worst
conditions.
To address the poor healthcare faced by these coffee grower families, FNC together with other
institutions create the program “Seguridad Social a través de la Salud”, by which families receive
medical care through a government subsidies system. Also in coffee regions, even though the
conditions have improved communities are still exposed in case of refusing to pay extortions to
organized crime.
In relation to the Specialty Coffee subsector, with the recent growth of this market in the U.S. and E.U.,
coffee growers have had the opportunity to earn premium prices for their crop, as long as they are
willing and able to adopt the production and post-harvest handling practices that their increasingly
informed consumers expect of them. This new lucrative niche has given Colombian farmers an
attractive alternative in which they can penetrate.
Environment
Environmental protection and sustainability are vital to the success of the coffee industry. Therefore,
much of the work of FNC and its coffee research institute Cenicafé, is dedicated to understand the
relationship between coffee cultivation, the environment and discovering techniques that minimize
environmental impact in all production processes of coffee. This includes active participation in the
conservation of water, soil and forests, together with biodiversity projects and the implementation of
waste management practices. However this work has been deteriorated by other projects that are
affecting coffee growers. The country grants licenses to hydroelectric, mining and oil exploitation
projects to multinationals, which affect or displace entire communities and also harms the ecological
balance in the coffee regions.
Fair operating practices

The Coffee sector in Colombia is characterized for having a leading role in sustainability and standard
setting. The number of coffee farms verified and/or certified under different international
61
sustainability labels or protocols has sharply increased in Colombia during recent years. By the end of
March 2013, a total of 162,039 farms fulfilled different sustainability protocols required by customers
worldwide [19] An 8% of global green coffee exports is sustainable (est. 17% of production). An average
growth of 20-25% over past years with major sustainability commitments from big international
players with presence in Colombia (Nestle, Kraft, Sara Lee, Tchibo, IDH, among others) has also given
an impulse in the on-going adoption of CSR practices in Colombia.
The major sustainability initiatives implemented in Colombia or in the process of implementation are:
 Rain Forest Alliance
 UTZ Certified
 Fair Trade
 4C
The role of CBI in this aspect can generate a great impact in different fields.
 Promoting more production of specialty coffees over the commodity model so prices are less
volatile.
 Support and partnership in implementation of CSR practices that can create an added value of
their product taking into account, as explained before that most farms are small and can’t
afford a label on their own.
 Connection with potential buyers or partners for Organic products, together with technical
assistance in the production of this special coffee.
 Assistance in the selection of the right CSR initiative for different producers.
The coffee sector in Colombia has been one of the most protected ones and government and FNC have
constantly provided assistance, financial and technical support to the farmers but this seems to be not
enough at the moment. Although there is a general discomfort about the current situation, there is
much respect for the sector and is one were CSR practices, fair trade and CSR has been applied for
many years.
Risk assessment
The Value Chain Constraint Analysis (Table SC 7) shows if the mentioned bottlenecks are critical for
the futures success of a CBI program and therefore for the future increase in exports to the EU; if these
issues can be solved in the short term of a program; and the risk they will not be solved appropriately
in the short term.
In this part we will analyze external factors that should be taken into account in the risk assessment of
this sector, and also the most crucial bottleneck specific to this sector and their risk they represent in
the future success of a program.
62
5.9.1 External factors

Political
 Difficulties obtaining visas: Not critical.
As it was discussed during the validation sessions, Visas create a barrier for spontaneous travel and
generate extra costs. Nevertheless travel is done if planned ahead. Proexport and CBI can help in
making these travels as fruitful as possible.
 Struggle between farmers and the government: Critical
Currently there are a series of protests from the agricultural sector in Colombia. The fact is that the
sector is struggling because of several reasons including lack of government support, poverty,
revaluation of COP, FTA’s importing more than exporting, and lack of competitiveness. This is a critical
issue, but programs such as the ones CBI has go actually in the interests of these sectors instead of
corporations bringing more equity to an important sector of Colombia.
Economic
 Revaluation of COP: Not critical.
This aspect is quite polemic. Exchange rate has affected considerably income of farmers used to
obtaining good prices by international stock prices and the exchange between COP and US$. Here it is
not considered critical since the sector is not competing in commodities regulated by international
prices but by in added value products less susceptible to stock prices and less affected by exchange
rate. It is, non-the less, an important matter.
 Investment: Critical
As it was mentioned in the Validation Sessions, investment is always critical in this and other sectors.
Money is normally an issue in developing countries and that represents a barrier especially for entering
new markets. With the help of CBI and other institutions private and public, this barrier can be solved
and better investments can be planned.
Social
 Less interest in growing coffee: Not critical
In recent years, and as it was discussed in this report, there has been a decrease in the production of
the sector due to revaluation and climate conditions which had made on one hand, less interesting
and profitable SC for farmers who have switched to other crops; and on the other hand, has lower
production due to not optimal conditions for harvesting., among others. SC are not a volume market,
but rather niche, which with the current conditions will provide enough product of excellent quality to
the EU market.
 Drug/guerilla related issues: Not critical
Most coffee regions are not regularly locations for illegal drug harvesting in Colombia, and the sector
has traditionally been prosper and peaceful.
63
5.9.2 Internal factors (most important sector’s bottlenecks)

 Low quality packaging: Critical.
 Branding/marketing in EU: Critical
 Lack of market knowledge of the EU: Critical
 Contact with specialized buyers: Critical
These aspects are described in Table SC 7 more deeply; but the most important is that these aspects
are solvable by programs of the CBI in collaboration with the above-mentioned BSO’s during the length
of a program.

Colombia has built a strong reputation in the quality of their coffee worldwide. Nevertheless, in Europe
this is not so well known, especially to the end consumer. In order to change this situation, Colombian
companies, and sector BSO’s must take action to tackle a number of bottlenecks, being:
 Most producers are small farms and cannot afford CSR certifications.
 Few roasters production for export.
 Limited product differentiation.
 Need for marketing and product communication in the EU
 Lack of market knowledge of the EU/EFTA countries.
 Need of more contact with specialized buyers.
As it was explained during this section of the report, there are other bottlenecks that are important to
the sector and whose solution would greatly benefit the presence and competitiveness of Colombian
Specialty Coffees in Europe. These issues are not independent from one another and their solutions
must be a combined effort in order to have the desired effect.
Colombian is a country more used to exporting green coffee, but recent issues such as climate,
revaluation of the Colombian Peso, low international prices and replace of coffee trees to reduce the
effect of rust in plantations had lowered the production and made the green coffee export less
profitable SC which has led to re think strategies for the sector. New generations of Colombians have
started to develop a different relationship with coffee, with more demanding quality in the
consumption and realizing the value of their different origins to produce quality coffee that can
compete outside the commodities market.
Because of the traditional business model of selling green coffee, few roasters are dedicated to process
and pack coffee for export. The main roasters are dedicated to the local market. There is a need for an
increase in capacity for roasting, technification in the process and better technological capacity to
compete with final product in a very competed market.
Europe, as a more demanding and highly consuming coffee region is a market that still needs to be
explored but represents great opportunities. The overall decrease in quality for regular coffee found
in supermarkets due to a search for lower costs from the producers has also made the market for
specialty, high quality coffees to grow. Producers are not aware of consumer demand for traceability,
therefore investment in this attributes is slow. In the specialty coffee industry, consumer definition of
quality includes social, transparency, location and taste attributes. For this it is crucial to understand
the differences in European preferences in the different countries, which is a matter that is not
exclusive to taste, but also, as mentioned above in traceability and social responsibility.
64
More consumers are looking for gourmet coffees and supermarkets are responding to this by
introducing gourmet products and single origin coffees that appeal to this growing niche. In this case,
the need for certification in CSR is a must. Labels that the consumer can relate to, traceability in origin
and fair trade are aspects that are related with this niche. Consumer demand for product attributes
that suit their tastes and social priorities has driven growth in product differentiation across the food
industry. This trend drove the growth in the coffee specialty market. Unfortunately, Colombian
growers are mostly small farms that can’t afford certification with international labels without the
support of bigger producing companies, local or foreign.
Together with these aspects is the need for a branding effort to position the country and its different
origins and characteristics in coffee to the consumers in this niche. Better packaging, communication
and promotion have to be applied to the products. These efforts must go hand in hand with knowledge
of the market and connections with European niche buyers, which are much more segmented than
the big roasters and brands that commercialize blend coffee and require perhaps a bigger effort from
Colombian BSO’s and producers.
In order to overcome these circumstances, the SC sector requires taking action in the following fields:
 Increase and modernize roasting capacity.
 Perform country-specific market studies.
 Establish and increase connections with European buyers.
 Associate internally for certification and production
 Associate with European roasters or brands producing specialty coffees
 Invest in certification and CSR labels
 Promote SC’s origins and characteristics in the EU.
 Invest in packaging design and communication of products
 Expand to growing markets in Eastern Europe through the Netherlands
Specialty Coffees is a growing market and Colombia has a good reputation build in the industry, which
facilitates the successful entry in this market. Nevertheless there is plenty of competition from
products from countries with better marketing in origin products such as Kenya, Ethiopia, Guatemala,
Costa Rica and Brazil. Without the marketing knowledge, better communication of product, brand and
country; CSR label relating to the conditions in which the coffee is produced and traceability of the
origin it will be difficult for the sector to compete in Europe. Perhaps strategic alliances between
growers producing specialty coffees, combined with strategic partnerships in the EU, for certifications
and distribution will impulse the exports and positioning of this products.
Aspects like costs of logistics although important, are not as crucial as they are in other sectors where
volumes are higher there is a stronger competition in price and the transport chain is more complex.
Market intelligence and communication on the other hand are, as discovered in this study, much more
crucial for the success of the sector.
65
Result Chain
Impact Sustainable economic development (better returns than exporting green beans)
Increased exports of the sector
Outcome Strength demand through country Specialty Roasted Coffee quality recognition
Improved EU market linkages
SME´s are promoted by BSO´s as a part of

SME´s create a network of niche specialized buyers
country programme
SME´s participate in interantional trade fairs, SME´s receive visits and participate in national
conferences, etc. fairs to promote their products
SME´s are ready to approach in a more professional way

their target market
SME´s understand the EU market requirements and get

Output ready to export to the selected ones
(enterprise
level) SME´s develop packaging design of their products suited SME´s use certification label on their products to
to EU market strength consumer demand in markets abroad
SME´s develop export strategies according to their

productive capacity and products
SME´s increase & improve understanding of EU market

needs & opportunities
SME´s define their production capacity for EU market
BSO support promotion & recognition of micro-

roasted Colombian Coffee Companies
BSO organize agricultural visits & trade fairs for

importers interested in Specialty Rosated Coffee
BSO develop together with partners a

certification programme for 100% Colombian
Roasted Coffee
Ouput
(Service/market
BSO develop collaborations to support and
level)
develop programmes for the sector
BSO develop trainning programmes for SME´s
BSO is able to develop an improved Roasted

Specialty Coffee sector export strategy
BSO is able to provide SME´s export intelligence

on attractive EU markets
Activities ECP modules HRD modules BSOD modules
Image SC 14 – Result Chain.
66
References Processed Specialty Coffees (SC)
[1] Coffee World Markets and Trade. (2012) USDA – United States Department of Agriculture. Circular
Series December 2012. http://www.fas.usda.gov/psdonline/circulars/coffee.pdf
[2] GAIN Report – Rust resistant Varieties begin to show results. (2013) USDA – United States
Department of Agriculture.
[3] Trademap. (2012). Trade Statistics for international business development. International Trade
Center. http://www.trademap.org/
[4] Proexport (2012) Panela, uchuvas y cafés orgánicos de Colombia en Biofach 2012.
http://www.Proexport.com.co/noticias/panela-uchuvas-y-cafes-organicos-de-colombia-en-biofach-
2012
[5] GAIN Report – Colombian Coffee Production Will Rebound in 2013. (2013) USDA – United States
Department of Agriculture.
[6] CBI Market Information Database. (2012) CBI Trade Watch Coffee, Tea & Cocoa.
http://www.cbi.eu/
[7] China, un interesante mercado en crecimiento para el café. Café de Colombia al 100% (2012)
Edición # 7 http://www.cafedecolombia.com/
[8] International Coffee Organization ICO (2010). International coffee figures.
[9] European Coffee Federation ECF (2011). European coffee report 2010/11
[10] Koffie en Thee (KNVKT) (2010). Intentieverklaring – 9 november 2010: Naar drie kwart duurzame
koffie in 2015
[11] Ministry of Foreign Affairs of the Netherlands (CBI) (2011). Reports on: Coffee in Germany, Coffee
in Italy, Coffee in the Netherlands, Coffee in the UK.
[12] Allegra (2010). Project Café 10 UK (Summary)
[13] Coffee Barometer (2012) Tropical Commodity Coalition for sustainable Tea, Coffee and Cocoa.
[14] The coffee exporter´s guide (2012), International Trade Center.
[15] Mi casa es tu casa (2012) http://www.trendwatching.com/trends/micasaestucasa/
[16] The History of Coffee (2009) Gourmet Coffee Lovers http://www.gourmetcoffeelovers.com/
[17] Coffee consumption (2006) SASI Group (University of Sheffield) and Mark Newman (University of
Michigan) www.Worldmapper.org
[18] European Coffee Market Situation (2009) Specialty Coffee Association of Europe (SCAE)
[19] Colombian Coffee insider (2013) Federación Nacional de Cafeteros.
http://www.federaciondecafeteros.org/
[20] US AID – Compete (2010) A regional strategy for the specialty coffee value chain in Eastern Africa.
[21] Café de Colombia. (2012) Programa de Cafés Especiales, componente clave de la estrategia de
Valor Agregado de la FNC. Federación Nacional de Cafeteros. http://www.cafedecolombia.com/
[22] Cafés especiales, capitulo 10 (2011) Sistemas de Producción de Café, Fundamentos sobre
sistemas de producción. Cenicafé.
[23] European and Belgian Market for Certified Coffee (2010) BTC, Belgian Development Agency.
(2013) International Trade Centre. http://www.thecoffeeguide.org/coffee-guide/
67
[24] About Specialty Coffee. (2013) Specialty Coffee Association of Europe SCAE. www.scae.com
[25] Coffee Roast Types (2012) Gourmet Coffee Lovers. http://www.gourmetcoffeelovers.com/
[26] Trade Statistics (2013) International Coffee Organization http://www.ico.org/trade_statistics.asp
[27] Specialty coffee resilient in European Downturn (2012) Business Recorder.
http://www.brecorder.com/
[28] Fairtrade and Coffee (2012). The Fairtrade Foundation.
[29] EU Legislation: General Food Law. (2012) CBI Market Intelligence. www.cbi.eu
[30] Roasted coffee in the EU: a road less travelled for DCs (2011) CBI Market Intelligence. www.cbi.eu
[31] Café de Colombia (2011) http://cafedecolombia.weebly.com/exportaciones-e-
importaciones.html
[32] USAID Specialty Coffee Program (April 2012) Final Report. ACDI-VOCA
68
EXPORTADORES CAFÉ TOSTADO-CAFÉ DE COLOMBIA

Actualización Julio de 2013
CIUDAD RAZÓN SOCIAL E-MAIL TELÉFONOS DIRECCIÓN PAGINA WEB DEPARTAMENTO
1 Ciudad Bolivar Agropecuaria Farallones S.A. info@agropecuariafarallones.com (4) 8411367 Calle 48 46-78 Antioquia
2 Itagüí C.I. Coltrillas S.A.S. coltrillas@coltrillas.com (4) 2773708 Calle 32 # 41 - 63 Itagui Antioquia
Carrera 54 79 AA Sur - 40 Bodega
3 La Estrella C.I. Madrid S.A. saldamoli@une.net.co (4) 3092244 Antioquia
149
Carrera 33 7 - 29 Of 503 Ed
4 Medellin Café de Santa Barbara S.A.S. pmechavarria@gmail.com (4) 3540354 Antioquia
Bianco
Cooperativa Agrícola Cafetera
5 Envigado exportaciones@coagracafe.com.co (4) 4445801 Carrera 42 54A- 155 Of 101 Antioquia
COAGROCAFE
Cooperativa de Caficultores de Andes
6 Andes info@cooperandes.com (4) 8414211 Carrera 50 49 A - 52 Antioquia
Ltda.
7 Itagüí Fábrica de Café Don Quijote Ltda. cafequijote@une.net.co (4) 3722052 Diagonal 40 32-93 Loc 102 Antioquia
8 Medellin Hkfe S.A.S. hkfe.sas@gmail.com (4) 2763083 Circular 6 66B - 163 Antioquia
Industria Colombiana de Café
9 Medellín welcome@colcafe.com.co (4) 2856600 Calle 8 Sur 50-67 Barrio Guayabal www.colcafe.com.co Antioquia
S.A.S.(COLCAFE)
10 Medellín Inversiones Jaramillo Angel S.A. info@cafedelafonda.com (4) 4115057 Circular 76 37-51 Antioquia
11 Rionegro Juan Carlos Paipilla Martinez jpaipilla@hotmail.com (4) 5311607 Carrera 59 37-49 Antioquia
12 Medellín Olmos Hajduk & CIA Ltda olmos@une.net.co (4) 2647777 Carrera 76 49-86 Antioquia
Processed coffee exporters.
Productora y Comercializadora Carrera 54 29C-20

Appendix SC1
13 Medellin productora@une.net.co (4) 2352915 Antioquia

las Vegas S.A.S. Unidad Industrial de Belén
14 Bolivar Vargas Restrepo y Cia S.C.S. tbucaros@edatel.net.co (4) 8411928 Calle 48 47B - 29 Antioquia
15 Barranquilla Daha Group S.A.S. diazhansmartin@hotmail.com (8) 2785999 Carrera 82 106 - 38 Atlantico
C.I. Inversiones Internacionales de
16 Cartagena mluz@ciinvescol.com (5) 6658573 Centro Calle Roman 5 - 48 Bolivar
Colombia S.A.S.
Carrera 37 B 10C-41 Granjas
17 Manizales C.I. Comercializadora de la Loma Ltda cidelalomaltda@une.net.co (6) 8739090 Caldas
Estambul Manizalez
69

18 Manizales Casa Luker S.A. luker@epm.net.co (6) 8879510 Carrera 23 64B-33 Torre A Caldas
56 Garzon P & S Negocios S.A.S. pscafecolombia@outlook.com 3128013269 Carrera 6 6-43 Apt 201 Huila
Parque Industrial Juanchito
19 Manizales Descafeinadora Colombiana S.A.S. gerencia@descafecol.com (6) 8747410 Caldas
Malteria Km 10 Via al Magdalena
57 Santa Marta Sierra Coffe S.A.S. C.I. info@sierracoffee.com (5) 4220403 Carrera 13 27-73 Magdalena
20 Chinchiná Invercafe Ltda invercafe@hotmail.com (6) 8501371 Carrera 5 13A-34 Caldas
Asociación de Productores
Kilometro 1 via la Union - Pasto
58 La Union Agropecuarios de la Union Nariño contacto@asprounion.com.co (2) 7265915 Nariño
Vereda la Merced
21 Manizales Orlando Arteaga Castaño
(ASPROUNION) cafetisquesusa@une.net.co (6) 8739100 Carrera 37 B 10C - 41 Caldas
Industria Cafetera de Nariño S.A.S. Km 7 via Panamericana surCalle 64 A #21-50 Edif.
59 Pasto
22 Manizales marcel.albornoz@morasurcocafepuro.comcontabilidad.morasurco@yahoo.com/
Selecto Exportadores S.A. C.I. (2) 7217681
mauricio.duque@selectocoffee.com (6) 8900600 secretaria.morasurco@yohoo.com www.selectocoffee.com
Nariño Caldas
"Incafen S.A.S" Catambuco
Portal del Cable Of. 1205
Vereda el Descanso, Parcelación la Norte de
60 Villa del Rosario Flor de Maria Omaña Olivares flor_omana@hotmail.com (7) 5709086
expocosurca2722@gmail.com/ Calle 4 4-35
(2) 8279336 - Barrio Piedecuesta
Acequia, Antigua vía Timbio - Troje,
23 Timbio Expocosurca S.A. C.I. Santander Cauca
info@expocosurca.com.co 8278109 Diagonal al colegio Carlos Alban
61 Quimbaya Café Aborigen S.A.S. cafeaborigen@gmail.com (6) 7520100 Calle 12 10 - 09 (A.A. 298 Popayan) Quindío
Parque Industrial
24 Valledupar Café Don Valle S.A.S. cafedonvalle@hotmail.com (5) 5823355 Cesar
Manzana B Local 15
62 Armenia Café la Morelia S.A.S. gerencia@cafelamorelia.com 3146252321 Carrera 13 8N-67 Of 201 Quindío
25 Bogotá Banca Exportadora S.A carlos.julian@banexport.com (1) 2128724 Carrera 11 71-40 Of. 801 Cundinamarca
exportaciones1@cafequindio.com.c
63 Armenia
26 Café Quindio S.A.S
Bogotá Britt Colombia S.A.S. jmora@britt.com (6) 7495970 (1) 3849070 Carrera 19 33N-41
Calle 23 116-31 Bodega 41 Quindío Cundinamarca
o
27 Colombian Mountain
Bogotá Coffee Ltda.
C.I. Biocoffee C.I. jrosales@santamariatrade.com (1) 8044028 Km 6 vía Montenegro- Calle 76 55 - 34 Cundinamarca
64 Montenegro hsarria@cafecmc.com (6) 7411371 Quindío
S.A.S. Pueblo Tapao
28 Bogotá C.I. Café Santana S.A.S. cafesantana@live.com (1) 3175903 Calle 74 15-80 Of 202 Cundinamarca
Comercializadora Aroma de Colombia cafearomadecolombia@hotmail.co
65 Armenia (6) 7371815 Calle 51 6-106 Bodega 4 Quindío
S.A.S. m
29 Bogotá Café Montaña Roja S.A.S. monredkf@hotmail.com (1) 3455836 Calle 63 18-24 Cundinamarca
Café y Compañía S.A.S.- Café & Co
66 Pereira
30 Bogotá Café Brisal Ltda info@cafemariscal.com.co (6) 3373346
juan.zuluaga@interpanelsa.com Av 30 de Agosto 87-88 La Villa
(1) 3463763 Carrera 19 # 66-36 Risaralda Cundinamarca
S.A.S.
Entreverdes Asociación
Bogotá de S.A.S.
Café Devotion nelsonv@cafedevotion.com (1) 4111523/64
31 Calle 19 9 - 50 Ofi 11-05 Edificio Carrera 69B 17A-22 Cundinamarca
67 Pereira Productores de Cafes Especiales oscartru67@yahoo.es (6) 3251202 Risaralda
Diario del Otun
32 de Pereira
Bogotá Coindagro S.A.S. coindagro@etb.net.co (1) 6297287/89 Carrera 7A 123-24 Of. 502 Cundinamarca
Finca Barcelona Vereda Miravalle,
68 Apia Flor de Apia S.A.S. asesoriaintegralelial@hotmail.com (6) 3336819 Risaralda
Km 1 Via Apia -Vitermo
Carrera 32 # 9 - 48 Barrio Ricaurte
33 Bogotá Coodecafec Ltda torre.coodecafec@gmail.com (1) 2017166 Cundinamarca
Zona industrial Pensilvania
69 Dos Quebradas Grancafé S.A.S. blanca_aguirre9@hotmail.com (6) 3324453 Carrera 14A 50-21 Risaralda
Parque Industrial San Jorge Bodega
34 Mosquera D´Origenn S.A.S. carlos.afanador@dorigenn.com (1) 8933432 Cundinamarca
70 Bucaramanga Juan Jacobo Baron Rubio juanbaron8513@hotmail.com (7) 6999407 Central de Abastos Bodega 4 2 Carr Occ Km 19 Santander
Carrera 13 No.96-67, Of. 301
71 Bucaramanga Bogotá
35 Eurotrading
Trilladora y Tostadora C.O.C.I.
Catapuri S.A. Ltda eurotradingcafe@yahoo.com
hector.uribe@cafecatapuri.com.co (7) 6719438 (1) 7029203 Calle 12 15-47 Santander Cundinamarca
Edificio Akori
36 Bogotá Fajad Inversiones S.A. proyecto_oscar@hotmail.com (1) 6160580 Calle 93 13-32 Of. 406 Cundinamarca
70
71

37 Bogotá Fincas Aliadas S.A.S. fincasaliadas@gmail.com (1) 3208303 Calle 95 71 - 45 Torre 3 Apt 1503 Cundinamarca
38 Bogotá Golden Bean Colombia S.A.S. patricia.lozada@gbcoffee.com (1) 2266595 Calle 106 56 - 62 Ofi 701 Cundinamarca
CARRERA 4A No. 53-27 Of. 201
39 Bogotá In Conexus S.A.S. avillanueva@inconexus.com (1) 2494983 Cundinamarca
Barrio Chapinero Alto
40 Bogotá Maria del Pilar Rodríguez Larrota matiascolina123@gmail.com 3123711889 Calle 152 58-50 Colina Campestre Cundinamarca
41 Bogotá Mert S.A.S marco@mertsas.com (1) 3214121 carrera 7 # 80-49 ofi 201 Cundinamarca
andreadelpilar.pachon@juanvaldezc
42 Bogotá Pod Col Coffee Ltda (1) 3137342 Calle 73 8-13 Piso 3 Torre A Cundinamarca
afe.com
Promotora de Café Colombia S.A.
43 Bogotá imelda.pena@juanvaldezcafe.co (1) 3106371 Calle 73 8 -13 Piso 3 Torre A www.juanvaldezcafe.com Cundinamarca
PROCAFECOL S.A
Promotora de Inversiones Vargas
44 Bogotá fredygayon@pinvar.com (1) 2844224 Calle 12C 7-19 Piso 16 Cundinamarca
Rubio S.A.
45 Bogotá Racafé & CÍA S.C.A trade@racafe.com (1) 6118700 Carrera 11 82-01 Piso 5 Cundinamarca
Carrera 98 25G-10 Bodega 11
46 Bogotá Rans S.A.S. ranssas@hotmail.com (1) 2980200 Cundinamarca
Centro el Dorado
47 Bogotá Restcafe S.A.S. exportaciones@cafeoma.com (1) 2440820 Carrera 42A Bis 13 - 83 Cundinamarca
48 Bogotá SKN Caribecafé Ltda Mtorres@skncaribecafe.com (1) 3265125 Carrera 9 73-24 Cundinamarca
Sociedad Exportadora de Café de las
49 Bogotá Cooperativas de Caficultores mainbox@expocafe.com (1) 3437050 Carrera 7 74-36 Piso 3 Cundinamarca
Expocafé S.A.
50 Bogotá Telmo J. Díaz y CIA S.A. oswaldo.acevedo@cafemesadelossantos.com
(1) 2850385 Av 39 14-82 Cundinamarca
Trilladora Tostadora de Café Tritocafé
51 Bogotá gerencia@ingesecltda.com (1) 4035366 Carrera 69 Bis 24 - 10 Sur Cundinamarca
S.A.S.
52 Bogotá Vive Café S.A. lfvelez@amorperfectocafe.net (1) 2485796 Calle 64 3A-29 Cundinamarca
53 El Pital Amigos AMG Ltda. amigoltda@yahoo.es (8) 8327294 Calle 9 14-29 Huila
Carrera 5 10-03 sur
54 Neiva Coffee Company Huila Ltda lfcollazos@coffeecompanyhuila.com (8) 8700528 Huila
Zona Industrial
55 Neiva Dumar del Huila S.A.S. ubaldo1760@hotmail.com (8) 8672110 Carrera 7A 18 - 47 Sur Huila
72
73

72 Cali C.I. South Commerce Group S.A. jibohorquezc@scgtrading.com (2) 8920900 Carrera 2 Oeste 2 - 41 Piso 2 Valle del Cauca
73 Cali Café Granja la Esperanza S.A. C.I. info@cafegranjalaesperanza.com (2) 4482657/53 Calle 33 9 -21 Valle del Cauca
Industria de Productos Alimenticios
74 Cali gerencia@aguilaroja.com (2) 5504294 Carrera 5 21-48 Valle del Cauca
del Cauca S.A.
75 Cali Seguridad y Gestion Ltda C.I. segescomercial@hotmail.com (2) 6680655 Calle 22N 6N-39 www.segesltd.com Valle del Cauca
76 Cali Tostadora de Café Versalles Ltda. ventas@cafeversalles.com (2) 8813917 Carrera 7 23-96 Barrio San Nicolas Valle del Cauca
Trilladora, Comercializadora y
77 Sevilla Procesadora Colombiana de Café S.A. tricafe@telecom.com.co (2) 2198474 Carrera 52 59 - 918 Valle del Cauca
-Cafexcoop-
74
Appendix SC2
Supporters
 Corpoica (Corporacion Colombiana de Investigación Agropecuaria) The Colombian
agricultural research corporation is the sanitary and phytosanitary leading authority in the
country. This institution generates and transfers scientific knowledge and technological
solutions through research and innovation services and products for the agricultural sector in
Colombia. (Seeds, agricultural inputs, agroindustrial products).
 SENA (Centro Nacional de Aprendizaje) The National Center of Learning is an organization
that provides technical training and education for activities in all sectors.
 Institute Alexander von Humboldt. Institute focused on research in the biological resources.
It is a scientific institution focused in the study and monitoring the biodiversity in Colombia.
 Proexport is the entity in charge of promotion of international tourism, foreign investment
and non-traditional exports of Colombia. It identifies market opportunities, design strategies
to enter new markets and supports the internationalization of Colombian companies.
 Chambers of commerce independently located in the cities serve as center for the registry of
public records of commercial proponents and non-profit entities of private nature. They look
after the general interests of the commerce to the government and to the merchants
themselves.
 CBI is the Center for the Promotion of Imports from developing countries. Entity of the Ministry
of Foreign Affairs of the Netherlands. Provides specialized assistance to exporters from
developing countries and to European Union importers. Designs programs to aid particular
sectors in selected countries to facilitate the success in the European market.
 Sippo is the Swiss entity for the promotions of imports to the EU, Switzerland and EFTA
countries. They provide information about product requirements, matchmaking, and training
for companies to enter successfully in the EU/EFTA market.
 IDH Multi-national organization co funded by the Dutch, Swiss and Danish governments that
works with private companies and governments for the development of environmental
practices, sustainability and reduction of poverty. It accelerates and up-scales sustainable
trade by building impact oriented coalitions of front running multinationals, civil society
organizations, governments and other stakeholders.
 CSR Europe is the European Business Network for Corporate Social Responsibility. Business
reference point for social responsibility issues. Includes case studies, publications, current
activities and databank search.
 Occicafé (Association of High Quality Coffee Producers Southwest Huila). Guild of Huila
region looking after the interests of their members and serving as consolidation for volume,
quality assurance and implementation of CSR labels.
 Asoexport (National Association of Coffee Exporters) Guild of Colombian Coffee Exporters in
general.
 Comitato Italiano Caffe (Italian Coffee Committee) Committee for the wellbeign of the coffee
production and customer satisfaction in Italy.
 Associazione caffè Trieste Association for the coffee industry in the city of Trieste, main
producing coffee region in Italy and oldest coffee association in the country.
75
 Deutscher Kaffeeverband (German Coffee Association) reprensent the interest of practically

all businesses related to coffee in Germany; green coffee, coffee roasters, cmanufacturers of
roasting machinery, coffee shops, and sustainable organizations among others.
 ACAFETO (Association of Specialty Coffee producers from Fresno, Tolima)
Influencers
Government Institutions
 Ministry of Commerce, Industry and Tourism is the maximum authority ruler of the policies
in Colombia for all economic activities in industry, commerce, and tourism. It looks after the
competitiveness and positioning of Colombia in foreign markets.
 Ministry of Agriculture and rural development is the maximum authority in Colombia for all
activities, policies, regulations, statistics, aids and development of the agricultural activities in
Colombia. ICA, Incoder, Banco Agrario, Finagro, Corpoica and others are entities of this
ministry.
 CAR - Corporaciones Autonomas Regionales (Autonomous Regional Corporations) are
corporations in each region that defines plans, projects and policies for natural resources,
environment and sustainability. They are CRA (Atlántico), CORANTIOQUIA (Antioquia)
CODECHOCO (Chocó), CAR (Cundinamarca), CAM (Magdalena), CARDER (Risaralda), CAS
(Santander), CRQ (Quindío), CVC (Valle del Cauca), among others.
 Secretaries of Agriculture. Generate integration and development of the agricultural
subsectors in a city or region and the impact in the local economy. Protect the agricultural
vocation. Inter-institutional coordination of agricultural guilds for the development of
programs of conservation, rational use of natural resources, and provide technical assistance
when necessary.
 ICA (Instituto Colombiano Agropecuario) The Colombian Agricultural Institute designs and
implement strategies to prevent, control and reduce biological, chemical and health risks that
may affect animal and vegeTable SC species and therefore agricultural, forestry, fishery and
aquaculture production. It aims to achieve a competitive agricultural production to contribute
to achieve the exports objectives in the country.
 DIAN (Dirección de Impuestos y Aduanas Nacionales) The National Direction of Taxes and
Customs controls taxation for all exports and internal commerce in Colombia and customs and
import duties from products or services entering the country. It controls the financial safety of
the State.
 Incoder (Instituto Colombiano de Desarrollo Rural) The Colombian Institute for Rural
Development executes rural development policies, in coordination with communities and
public private institutions related to agriculture. Facilitates access of rural people to productive
and social factors to help improve their quality of life and socioeconomic development.
 FNC (National Coffee Federation). Maximum entinty representing the coffee sector in general
in Colombia. Owner of the ‘Café de Colombia’ brand and the processed coffee brand Café Juan
Valdez’ as well as the known character. The FNC looks after the quality standards of all the
coffee that is going to be exported from the country as well as providing technical support and
training to the growers.
 SCAE (Specialty Coffee Association of Europe) is a trade association for members looking
for coffee excellence, with members in more than 70 countries around the world (not
necessarily European). Is an organization lobbing for the quality of coffee with public and
private sectors.
76
Financial Institutions
 ANALDEX is a private institution, which objective is to promote and strengthen Colombia´s
export activity, promote the country´s Image SC abroad, and support the design and
implementation of national export policies. It also advice national and international
organizations with the goal of strengthening exports and identify actions and services that
facilitates the process of exporting Colombian products
 BANCOLDEX (Bank for External Commerce) is a financial institution whose main objective is
to finance the needs for working capital and fixed assets of companies of all sizes and all
sectors of the Colombian economy.
 FINAGRO (Fondo para el financiamiento del sector agropecuario) Agricultural financial fund
is an alternative financing institution for the agricultural sector.
 BANCO AGRARIO State-owned commercial bank linked to the Ministry of Agriculture
specialized in financial services for the rural sector and habitants.
References - Intro chapters

[1] US Embassy website: Bogota-Colombia - News - Bilateral Topics - Economic trade
[2] European Commission: Colombia Country Strategy Paper 2007-2013
[3] Ministry of Industries, Production & Special Initiatives Government of Pakistan: Smeda
exporting to the EU - import regulations in to the EU
[4] European Union: How the EU works - the economy
[5] Economy watch: Europe Economy
[6] European Commission: European Economic forecast - winter 2013 - European Economy 1-
2013
[7] European Commission: 2011 -Commission Staff working paper
[8] American Institute of Physics: Journal nr. 29 – by Zita Zoltay Paprika
[9] European Commission: working paper - Creating an entrepreneurial Europe
[10] International Journal of Asian Management (2004) Article - European cultures and
management styles
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FINAL SECTOR RESULTS - SC

FINAL SECTOR RESULTS - SC

1. VCA PROJECT DESCRIPTION ......................................................................... 6

Project consortium ...................................................................................... 7

Project methodology ................................................................................... 7

General project process ............................................................................... 8

Project Scope .............................................................................................. 9

2. EXECUTIVE SUMMARY ...............................................................................10

General findings & recommendations ........................................................ 10

Summary of sector results ......................................................................... 11

Ranking the stars ....................................................................................... 14

3. COLOMBIA AS EXPORT COUNTRY ...............................................................17

About Colombia ........................................................................................ 17

Political & Legal ......................................................................................... 17

Colombian Economy .................................................................................. 18

4. EUROPE AS AN IMPORT CONTINENT ..........................................................20

About Europe ............................................................................................ 20

Political & Legal ......................................................................................... 20

General European Trend & Developments ................................................. 23

5. RESULTS - SECTOR SPECIALTY COFFEES (SC) .................................................26

Introduction to the SC sector and its analysis ............................................. 26

Demand and Trends in Europe - SC............................................................. 28

Supply and Trends in Colombia - SC............................................................ 35

Export Value Chain – Specialty Coffees ....................................................... 48

Overview of stakeholders .......................................................................... 50

Overview of the main bottlenecks ............................................................. 54

Overview of opportunities for Value Chain Development ........................... 55

Corporate Social Responsibility .................................................................. 60

Risk assessment ........................................................................................ 62

Conclusions and recommendations ............................................................ 64

Result Chain .............................................................................................. 66

References Processed Specialty Coffees (SC) .............................................. 67

Appendix SC1 ............................................................................................ 69

Appendix SC2 ............................................................................................ 75

References - Intro chapters ........................................................................ 77

This Value Chain Analysis for Colombia is executed by:

Ms. Juliana Niño

This assignment was given by

ACRONYMS & ABBREVIATIONS

B2B Business to Business

1. VCA PROJECT DESCRIPTION

Image PD 1: Interactive Workshop

Visualizations of main Value Chains findings

Image PD 2: Example of Value Chain Analyses visual

General project process

Image PD 3: Project Phases

General findings & recommendations

GENERAL CROSS SECTOR CONCLUSIONS

Summary of sector results

2.3.2 Processed Specialty Coffees

2.3.3 Natural Ingredients

2.3.4 Tropical & Exotic Flowers & Foliage

Conclusions & Recommendations

2.3.6 IT Outsourcing (ITO) Services

Conclusions and recommendations

Ranking the stars

Image ES 1 - Sector Ranking Table

2.4.1 Sector programme recommendations

2.4.2 Sector Priority Recommendations