Café Britt, S.A.

Abstract

Mr. Steve Aronson, CEO and founder of Café Britt, is faced with the decision of how to promote his company's growth and development through international markets, particularly U.S. specialty coffee markets. This case study refers to a highly innovative and creative company. Café Britt has developed new market segments within Costa Rica. It leveraged its international marketing effort by turning its coffee roasting plant into a major tourist attraction for the rising number of international tourists who visit Costa Rica each year. Traditionally, developing countries have exported a wide variety of agricultural commodities with little or no value added. Costa Rica's coffee is no exception. For almost 200 years, this country has exported green coffee beans. The export product is later roasted by multinational companies and retailed in international markets under different brands. Domestically, Costa Rica's coffee consumption reflects the consequences of an export-oriented industry. Only the lowest quality coffee was destined for domestic consumption, that is, produce that is not of export quality. As a result, Costa Ricans had not been able to learn to appreciate good coffee. They considered coffee containing “fillers,” such as sugar or corn, to be good. Given local market characteristics, in 1983 Café Britt foresaw the opportunity to develop a new, high-quality roasted coffee market niche. Its brand quickly gained unquestioned recognition in the domestic market. In 1993 Mr. Aronson was considering what to do about the limited scope for growth afforded by the domestic market's size and potential. Mr. Aronson is also president of other companies that process and export green coffee beans. These other companies exported U.S. $ 22 million annually. Mr. Aronson felt that given his local success with Café Britt, the growth and development potential of his new company could be a key element for the group's growth. In particular, he realized that he could obtain higher prices and margins per ton if he could sell his own packaged brand of roasted coffee in international markets. This management case traces the company's local development since its inception. It also discusses its recent incursion into managing tourism within its facilities. In addition, the case provides information about the company's production and supply capacity, international markets for green coffee beans and roasted coffee, and the recent development of specialty coffees in the United States. Toward the end of the case study, Mr. Aronson considers three specific alternatives to market his product in the United States: sell direct by mail to tourists who visit his facilities in Costa Rica; sell to wholesalers; and contract with a large mail-order company to sell his coffee. The case contains sufficient information for a qualitative and quantitative analysis of all the alternatives, as well as an assessment of other options.