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When we talk about Venezuelan black gold, most of us are more likely to be thinking of oil than coffee, but Hugo Chavez is hoping to change all that. The Venezuelan president came up with the idea of marrying two of his country’s largest national products and using one to boost the other. As of the start of July, the Venezuelan-owned Citgo Petroleum Corp will be selling the new Coffee Venezuela brand at more than 50 service stations in Chicago, Boston, Philadelphia and Baltimore. They hope to have as many as 2,000 service stations selling the Venezuelan brand within a few months.
Alejandro Granado, president of Citgo Corp calls it a ‘win-win initiative for everyone involved’. The oil company makes a profit on the sales, small growers in Venezuela get a new market and U.S. consumers get coffee ‘of extraordinary quality’.
Currently, Venezuela produces about 45,000 metric tons of coffee a year, most of which is drunk at home. The country only exports about 3.5 metric tons a year. Citgo has already imported nearly 50 metric tons of Venezuelan coffee to kick off its new program, and if it is as successful as they hope, they expect to import about 200 metric tons of coffee annually.
The new marketing program owes a lot to the program launched nearly three decades ago by neighboring Colombia, which has been marketing its coffee directly to North Americans and cutting out the middlemen Colombia’s marketing program made fictional spokesman Juan Valdez one of the best known advertising faces in the world, and firmly placed Colombian coffee in the minds of consumers as high quality coffee. Venezuela hopes to do the same with its own brand of Cafe Venexuela.
Granado, speaking at a launch party for the new initiative, said that the new coffee initiative comes directly from the Venezuelan president. “He asked us two or three years ago on behalf of the cooperative coffee growers if we could do something to benefit the market, with our network of thousands of service stations. We said we’d look into it, and we made it happen.”
Venezuela once produced nearly as much as coffee as Colombia, but coffee exports dropped as the country exported more and more oil. In the face of changing energy markets, Chavez wants to diversify its exports so that the economy is not so dependent upon oil. Interestingly, the country has a ringside seat as Colombia now struggles with a truckers’ strike that is crippling the country’s economy by tying up their coffee production and keeping it from reaching the market.
Colombian coffee cooperatives have a 30 year head start in marketing, and recently opened a chain of Juan Valdez-branded coffee bars in large cities across the country. Like the Colombian and Brazilian coffee cooperatives, Venezuela requires coffee cooperatives to put a portion of profits toward social improvements in Venezuela’s coffee regions and a portion to maintaining and upgrading existing coffee facilities.
John Sacharok heads up Golden Valley Farms, the West Chester, Pennsylvania company that distributes Venezuelan coffee in the United States. He says he visited the Andean growing regions in Venezuela and was impressed by improvements to the industry in recent years. They have a great product, he says, but lacked a vehicle to get it to the market. The partnership with Citgo provides that vehicle.
Of course, the proof of the coffee is in the tasting – and Venezuelan coffee tastes great, says one Citgo franchise owner. “That’s the only reason I’m doing it,” Boris Berdichevsky told a newspaper reporter. “I think it’s better than Colombian.”