09 April 2008
Juan Valdez Travels the World, Sends Profits Home to Colombia
Strong brand management boosts Colombia’s federation of coffee farmers
Washington -- For more than 40 years, Colombian coffee has sold for a price 20 cents per kilo higher on average than coffee from other countries.
"Every single kilo, for 40 years. That's a lot of money," said Michael Ryan, a professor at George Washington University in Washington.
Colombian coffee, sold under the Juan Valdez trademark, brings premium prices on world markets in large part because of Colombia's effective marketing and a copyrighted logo in global trade.
Ryan, who directs the Creative and Innovative Economy Center at his university, said Colombia's success in the global coffee trade holds lessons for other developing countries seeking to increase their returns on commodity exports.
"There is no better example of a successful developing country trademark and brand strategy than what the Colombians have pursued," Ryan said. The U.S. government asserts that intellectual property protection promotes the economic interests not only of global corporations such as Microsoft and Pfizer, but also of industries and companies in developing countries.
As far back as 1959, the Colombian Federation of Coffee Growers hit on the idea of going to a New York advertising firm, Doyle Dane Bernbach, to promote Colombian coffee to Americans. The following year the fictional Juan Valdez -- wearing his sombrero and leading his mule Conchita -- appeared on American television. The two have been commercial fixtures ever since.
The head of the intellectual property division of the Colombian coffee federation, Luis Fernando Samper, explained that the creation of the Juan Valdez persona has been instrumental in selling Colombian beans around the world.
The Colombian federation emphasizes that the Juan Valdez logo does not represent a brand, but rather the origin of the coffee. The federation demands that packages of coffee bearing the logo consist of 100 percent Colombian coffee. “No blending allowed!” it says.
Over the years, in attractive commercials, the Juan Valdez character has explained that Colombian beans are grown and picked by dedicated men, with little or no help from machines, in excellent climatic conditions -- plenty of rain, sun and volcanic soil. The campaign illustrates demand for Colombian coffee in humorous, sophisticated settings. For example, planes, trains and automobiles would make 180-degree turns to get Colombian coffee. The campaign has won numerous industry awards.
"The National Federation of Coffee Growers of Colombia decided that, for consumers to appreciate good coffee, they should be educated about what makes good coffee, including how soil components, altitude, varieties and harvesting methods create good flavor," Samper said in a press release commemorating the 40th anniversary of the Juan Valdez logo
The ingredient branding effort has worked, Samper said. Today, 95 percent of American and Canadian coffee drinkers are aware that Colombia grows coffee, and Juan Valdez is a familiar name to almost 80 percent of Americans. Consumers in Europe and the Far East now are exposed to the Colombian coffee campaign on a regular basis.
As coffee consumption evolved, so did the campaign. In the 1990s, with the surge of espresso bars, which brought a new generation of younger coffee drinkers, Juan Valdez found himself the central figure in a "Grab Life by the Beans" advertising campaign. The ads featured Valdez having fun with diverse adventures or extreme sports, such as surfing, snowboarding and hang-gliding.
During the beginning of the 21st century, the Juan Valdez character has continued to enjoy significant popularity. In September 2005, it was named Advertising Week’s "Advertising Icon of the year." During this contest, organized in New York, Juan Valdez received more than 200,000 votes and defeated the Geico Gecko, the Energizer Bunny and the Wrigley Company’s Doublemint Twins.
If higher profits from commodity exports were attainable merely by hiring a Madison Avenue advertising firm, certainly many other governments of developing countries would have done so.
The secret behind the secret, according to Ryan, has been the creation of a democratic, corruption-free growers' federation that looks after the welfare of the more than 500,000 Colombian coffee growers. The federation is funded by taxes levied by the Colombian government on coffee exports. In contrast to government practices in many coffee-exporting countries, the Colombian government does not keep the tax revenues, but returns them to the federation, which provides coffee-growing regions of Colombia with thousands of schools, hospitals, bridges and highways. More important, the growers are guaranteed a minimum price for their coffee even in periods during which prices are weak in the international market.
"Colombians have had 80 years to construct their federation … so people in developing countries who seek to learn from and adapt the model for their national circumstances should remind themselves that Rome was not built in a day," Ryan cautioned.
