Starbucks, the United States-based coffee chain has purchased a record 110 barrels of Jamaican Blue Mountain coffee or 60 per cent more than last year, in a deal slated to grow the exposure of the luxury bean, acording to the Coffee Industry Board (CIB).
The Fortune 500 company also plans to widen the coffee's availability by increasing its distribution tenfold into 500 premium stores.
This larger store presence, up from 50 stores last year, will give the local coffee increased brand exposure in the US market, CIB head Christopher Gentles told the Financial Gleaner in an interview.
Blue Mountain coffee would have arrived at Starbucks last month following its April shipment. It will retail at about US$5 (J$430) per cup, amongst the priciest in the world.
Gentles revealed that privately owned Gold Cup Coffee Company won the contract to supply the chain with 110 barrels or 7,700 kilogrammes. The coffee is valued at least J$20 million, based on Financial Gleaner estimates utilising the minimum price set by the regulator of some US$30 per kg.
The company directors at Gold Cup were not available for comment up to press time.
Gold Cup, headquartered at Constant Spring Road in Kingston, sources its coffee from Amber Estate farms in the Blue Mountains, based on information from listings of the former's phone number linked with the latter's website.
Amber Estate was started by Blue Mountain coffee entrepreneur and consultant surgeon Dr Charles Lyn in 1994. However, coffee has been farmed on those lands since the 1800s.
Abbey Green Estates describes itself online as the highest farm in the Blue Mountains at 4,500 feet, with the only gateway to the famous Blue Mountain Peak.
The Starbucks deal builds on last year's successful 'pilot' purchase of 70 barrels which quickly sold out.
"The pilot went very well last year, so they decided to increase the quantum of coffee purchased," said Gentles. "But we haven't got any feedback yet."
Jamaica tried for years to break into the US market in a substantial way but faced two hurdles - the majority of its coffee was committed to Japan, and the high cost of the coffee. The global recession has reduced Japan's demand for local coffee forcing Jamaican dealers to find new contracts.
Total coffee export sales dropped 37 per cent between April and January 2011 to US$16.8 million compared to year earlier levels, according to the latest Bank of Jamaica statistics. Despite the decline, coffee remains the island's second-largest crop earner of foreign exchange with Japan consuming some 85 per cent of the total crop.
Last year, the government-owned Wallenford Coffee supplied Starbucks with 70 barrels of coffee representing the first purchase by Starbucks of Blue Mountain coffee in years.
"We have offered this coffee only a few times before in our history," said Starbucks on its website last year.
Wallenford, currently up for sale, is the largest licensed processor and exporter of coffee beans. The company is projecting improved financials this year at a J$1.5-million net loss from J$820 million in total income, according to the Jamaica Public Bodies report.
It, however, made a net loss of J$163 million and J$466 million for fiscal years 2008-09 and 2009-10, respectively.
Gentles said that Wallenford Coffee Company will release its information memorandum this month, revealing detailed financial statements and company assets.
Starbucks recorded April 2011 second-quarter net income of US$261.6 million, or 20.4 per cent higher than the same quarter last year based on efficiency measures. At the same time, its total net revenues increased 10 per cent to US$2.8 billion
"Starbucks record fiscal second-quarter results reflect solid performance and execution across all of our businesses," said Howard Schultz, chairman, president and chief executive officer, in a statement accompanying the results. "Our sales, traffic and customer trends all point to the expanding power of the Starbucks business and brand. And our 40th anniversary celebration continues to resonate around the world, driving strong engagement among our partners and our customers. I saw this firsthand in China, where my visit this week confirmed how ideally positioned Starbucks is to profitably grow its store presence across China in the years ahead," said Schultz.
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