Starbucks vs. Juan Valdez

If you find yourself in New York, near Times Square (1451 Broadway, near 41st), step into Juan Valdez coffee and try their hot cappuccino arequipe. Without a doubt the coffee experience here is unique and, in my view, superior to Starbucks. But the chain itself is stuck in neutral, not sure of what it is and where it wants to go. Juan Valdez is an incredibly powerful equity, having defined superior coffee through consistent advertising since creating Juan Valdez icon in 1959. Having succeeded in establishing the equity worldwide, they followed Starbucks in defining "premium coffee experience" in Colombia through their Juan Valdez stores. But when they rolled to USA, that experience was long defined and owned by Starbucks, and Juan will not be able to dislodge them. The US stores are mirrored on the Colombian stores, and there in lies the issue. As Al Ries has counseled many times, it is time to DIVERGE, not converge. Juan, don't try to compete head to head with Starbucks. Instead, create a new space: Juan Valdez is the latino experience of coffee - this is a space Starbucks will never be able to occupy, and one that leverages the demographic trends in America. Lead with the Colombian experience of coffee, but expand your menu to accommodate the Cuban variant, the Brazilian variant and so forth. Open stores all over Texas, California, Southern Florida, Chicago, New York City and other geographies that have significant latino presence. Also have a presence in the cosmopolitan cities of the US where people look for new ethnic food experiences, and give them the anti-Starbucks. Once you have a clear vision of where you are going, the rest will be execution.

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