Shared value creation in the Coffee Industry of Minas Gerais Carlos Tarrason Collado Parallel 1.1 Common problems, common markets and shared value creation 11 November 2014
TCI 2014 Shared value creation in the Coffee Industry of Minas Gerais
Jul 15, 2015
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Shared value creation in the Coffee Industry of Minas GeraisCarlos Tarrason Collado
Parallel 1.1 Common problems, common markets and shared value creation
11 November 2014
17th TCI ConferenceSession 1B: Common problems, common markets and shared value creationShared value creation in the Coffee Industry of Minas Gerais (MG), Brazil
11th November 2014Monterrey, Mexico
What is Shared Value?
Shared Value
Competitive advantage CSR
Bottom of the Pyramid
Inclusive business models
Local Economic Development Integrated and sustainable
What is Coffee?
Commodity Arabica in the NYSE
Is it really a commodity like other grains?Little value not really shared
Producer Industry Distribution
Lets see our reality…
Coffee in Minas Gerais
BRAZILProd. 50MiCons. 20Mi
MGProd. 20MiJobs 100.000
WORLD144 Mi bagsUS$ 81 bi
First steps in Minas Gerais1990s
Producer Industry Distribution
+ Quality= Premium
Evolution in Minas Gerais2000s
Producer Industry Distribution
+ QualityCertifications++ Quality= Premium
Minas Gerais today2010s
Producer
+++ Quality
Minas Gerais today2010s
Producer
Regional Brands
Minas Gerais today2014
Industry
Development
20142005 2010
Multinationals
Regional
Specialty
2000
How to help MG >400 industries to compete against
strong multinationals and the concentration of distribution channels
2014
1065%
1200
Nestlé
Smuckers
Strauss
43,5% market
1. Understand business segmentsEXPERIÊNCEPRODUCT
2nd WAVE3ª WAVE
1st WAVE
QUALITYQUANTITY
1. Understand business segmentsEXPERIÊNCEPRODUCT
2nd WAVE3ª WAVE
1st WAVE
QUALITYQUANTITY
• Fresh• Industrial• Gourmet chanel• Drink• Certifications /
Country
• Ultra fresh• Semi artesanal/ art.• Gastronomy.• Experience.• Origin (story of the producer)
• Not fresh• Economies scale• Masive distribution• Product• Brand
Which segment is better for MG cluster?
We went to see where 2nd and 3rd Wave businessmodels are expanding.
Fragmented business with micro, small a medium companies
Business dominated by multinational
companies
EXPERIENCEPRODUCT
2nd WAVE 3rd WAVE1st WAVE
Competition among
Medium and large
companies
50% comom coffee
United States of America (US$)
Seattle, Portland, São Francisco
50% specialty coffee
SpecialtyCoffee Meca
World Reference in new trends and business models
Example 2nd Wave Specialty coffee
small lots fresh grains superior quality
New generation of foodies and roasters
1966
Food Service franchised
Own coffee shops
InstitutionalDifferenciated supermarkets
Growing strategically
A new type of coffe
CA180
Fonte: www.peets.com
32
57
18
8
4
With a good number of coffee shops andgood quality
Menu today
Fresh product made in the day by order,
“small” lots, by hand
Company improving quality day to day with focus on freshness
Recognition of the quality on the price
Portland, OregonExample 3rd Wave Specialty coffee
Sell specialty coffee with >86 points to >1000 coffeeshops, restaurants and shops at the highest price of themarket!
Do they really sell coffee or someting else?
Adam Maclellan
Mainly with own coffee shops and selectedpoints of sale
Build a brand = Identity
9 owncafeteriasPortlandSeattle
Los AngelesNew York
1000 selected
cafeterias
Some highend
restaurantsNYSF
Gourmet naturalfresh
shops andsupermarkets
SEATTLE PINE 12TH
PORTLAND DIVISION BELMONT DOWNTOWN STARK THE ANNEX
NEW YORKW. 29THW. 8TH
LOS ANGELESS. SANTA FE
Identity: Show room + business
Identity: Focus on coffee
Service = Training + Maintenance
Quality = Purchase + green coffee controlquality
Roasting Quality = Equipment + People + Freshness (4 industries in the country)
+ Control Quality
Semi artisanal process
3rd Wave strategiesSpecialized
Service
Marca Branca
Identity
+
+
QualityIdentityService
Quality Identity
Service
3rd Wave = Higher value with the participation of all the value chain actors = Shared Value
Producer Industry Distribution
QualityIdentityService
QualityIdentity
Delivers the experience
First results in Minas Gerais
Firsts results in MG
Recognition to many people working for it..
Thanks to the institutions that support this work
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