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Building a coffeehouse empire in Mexico
http://www.signonsandiego.com/news/business/20041111-9999-1b...
Chain's rapid growth is generating a buzz in Mexico
By Diane Lindquist
November 11, 2004
TIJUANA ? Roberto Gallegos used to complain there was no place to stop in this city for a cup of coffee before crossing the border to his garden
nursery business in south San Diego County.
Then he started his own chain of coffee shops.
Called D'Volada, the stores have become so successful that Gallegos has sold the nursery operation and now is concentrating on building a coffee
empire across northwestern Mexico.
The shops introduced a new, Starbucks-like concept to the region. Despite the fact that Mexico is one of the world's largest coffee producers,
Mexicans are not big coffee consumers.
"We are trying to train people about what is coffee, what is espresso, what is a latte," said Gallegos, 39. "We offer a lot of different choices."
Diana Ordu?a, who works at a state government office across the street from a D'Volada on Boulevard Sanchez Taboada, said she has become a regular at
the shop, drinking her favorite, cafe carmelo.
"I come for the service and the quality," Ordu?a said.
Since Gallegos opened the first D'Volada outlet three years ago October, the shops have spread across Tijuana and into Mexicali and Rosarito Beach in
Baja California and to Hermosillo and Culiacan in the neighboring state of Sonora. Outlets are planned in Tecate, Ensenada, Cabo San Lucas and
Guadalajara.
"I expected it to be slower, not so fast," Gallegos said. "We should finish the year with 35 stores. Next year, we expect to reach 50. The goal is in
the first 10 years to have 200 stores in all of Mexico."
It was Gallegos' eldest son Carlo, now 17, who, when they stopped at a Starbucks during a family trip to Las Vegas, suggested his father open a coffee
shop in Tijuana. They returned home on a Friday and Gallegos met with an architect on Saturday.
A year and two days later, he opened the first D'Volada in what once had been an empty lot on Avenida Las Americas just beyond the racetrack. The
following week, another store opened. In the first five months, five D'Voladas had been established.
At first, it was a family affair. Gallegos' wife, Maritza, came up with the name D'Volada, which means "in a rush."
"People are in a rush every day in Mexico," Gallegos said.
The first outlets were financed by a brother, aunts, cousins, but by the fifth store, Gallegos began franchising the operation. He sells the name for
$12,000 and offers equipment and supplies for the businesses.
The shops, with their light wood, Ralph Lauren-type colors, glass pastry showcases, paper cups and friendly young baristas, resemble the outlets of
the Seattle company that is the world's largest retailer, roaster and seller of its own brand of specialty coffee.
But there are some important differences between Starbucks and D'Volada, Gallegos said.
The coffee has a strong body like that served north of the border, but a milder taste to appeal to Mexican palates. Although the beans come from
Mexico and Guatemala, Gallegos buys them wholesale in the United States and uses an El Cajon company to do the roasting.
Shops, which are open from 5 a.m. to 10 p.m., are geared more toward people on the move. They are located in spots such as strip malls, where
customers are more likely to find a place to park in crowded Tijuana. There are fewer tables because people tend not to linger. Two of the local
outlets have drive-through windows.
Price is the biggest difference between Starbucks and D'Volada. The U.S. chain typically charges $1.50 for a tall coffee while D'Volada charges $1,
less even than it costs to buy a cup at the local AM/PMs and Oxxy markets.
This, Gallegos said, is his biggest protection if and when Starbucks decides to branch out from Mexico City to northwestern Mexico. The U.S. chain has
ambitious global expansion plans, but resistance to its prices has limited its expansion in Mexico.
"Besides, how many stores can they open in Tecate or Rosarito," he said.
Despite his success, Gallegos said the transition from nursery operator to retail coffee entrepreneur wasn't easy.
He did a lot of testing in local schools and giveaways of coffee blends before coming up with the right product. He advertised the outlet for six
months before opening.
The clean, well-lighted appearance of the stores, the friendliness of the employees and the quality of the products have proved very popular. "We're
always busy," Gallegos said.
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Bruce R Leech
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Location: Ensenada formerly Mulege
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Mood: A lot cooler than Mulege
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Cant Waite Star bucks in Mulege, next Walmart.
Bruce R Leech
Ensenada
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JESSE
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De Volada is a money laundering outfit.
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Dave
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| Quote: | Originally posted by JESSE
De Volada is a money laundering outfit. |
Then I am sure they will be very successful.
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bajalou
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Location: South of the broder
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Now if they add free WiFi, I'll be there
No Bad Days
\"Never argue with an idiot. People watching may not be able to tell the difference\"
\"The trouble with doing nothing is - how do I know when I\'m done?\"
Nomad Baja Interactive map
And in the San Felipe area - check out Valle Chico area |
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wilderone
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" Although the beans come from Mexico and Guatemala, Gallegos buys them wholesale in the United States and uses an El Cajon company to do the
roasting."
Tsk, Tsk - plenty of free trade Chiapas coffee available. That, my friend, is a two-pronged winner - help the environment, balance the NAFTA
inequities, help your fellow countrymen, make a statement, and make a profit. Buy free trade. check it out: www.jaguar-sun.com/chiapas/chiapas56.html
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wilderone
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Better link I think:
http://www.jaguar-sun.com/chiapas/chiapas56.html
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JESSE
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| Quote: | Originally posted by Dave
| Quote: | Originally posted by JESSE
De Volada is a money laundering outfit. |
Then I am sure they will be very successful. |
They already are, their coffe sucks, but the money misteriously keeps flowing in
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