PCB to franchise high-end Kape Isla coffee shops

To take on entrenched competitors
By MELODY M. AGUIBA
October 28, 2009, 3:56pm

Kape Isla, the coffee brand that extols the world-class quality of Philippine coffee, is eyed to be franchised out by the Philippine Coffee Board (PCB) in a high-end marketing scheme that can compete with multinational coffee retail stores like Starbucks.

More than 10 brands from different "coffee origins" are now being marketed by the PCB through its classy coffee shop Kape Isla at Serendra. But there may be more to come from this retailing business as PCB is now studying a business model for this. The coffee brands sold at the retail shop are Siete Baracos from Batangas, Batangas Brew, Kalinga Brew, Café Amadeo, Mountain Coffee from Benguet, Mt. Matutum Coffee from Bukidnon, and Kape Montana de Cavite, a Liberica and Robusta coffee mix from Cavite which will be introduced soon.

"This can be franchised. That is being studied by the coffee board," said Alejandro D. Mojica, research, development, and extension (RDE) head of the coffee program, in an interview.

The high-end marketing of Kape Isla is seen as the most effective strategy for the Philippine coffee as the country has the niche for having good quality beans for all four coffee varieties — Liberica, Robusta, Arabica, and Excelsa.

"It's not practical for us to compete with Vietnam. It can lower the price for a big volume. But we want to promote our specialty coffee and then sell other volume to manufacturing firms (like Nestlé)," he said.

The market for Philippine coffee locally is big as the country still imports 30,000 metric tons (MT) yearly. Local production is just at 28,000 MT.

Some Philippine coffee brands are already being exported like the Siete Baracos, Gourmet Coffee, and Continental Café. And the same direction of exporting processed coffee can be taken for the Kape Isla brand which is the umbrella brand for the coffees of different origins.

Aside from retailing coffee on a per cup basis at the Kape Isla coffee shop in Serendra, the coffee brands are sold in neatly packed bags at a bigger size than those for instant coffee in the market. The usual sizes are 250 grams and 500 grams.

Quality is assured as the coffee products comply with a Philippine National Standard for coffee. But producers are also eyeing compliance with organic coffee quality, although this requires more costly and more tedious processes as required by the Organic Certification Center of the Philippines (OCCP).

The quality of coffee beans is determined based on aroma, acidity, body, and other criteria.

Unlike other inter-agency boards established by the Department of Agriculture in early 2000, the coffee board has seen its plans realized with extensive cooperation between the private sector, DA, and local governments which have funded farmers' coffee planting, trading centers, or establishment of processing equipment.

Kape Montana, for instance, is owned by the Cavite Coffee Growers Multi-Purpose Cooperative and is supported by the local government, according to Mojica.

But the PCB is also pushing for expansion of coffee land that will make the Philippines coffee-sufficient through the establishment of 40 coffee towns which will be promoted through the One Town One Product (OTOP) of the Department of Trade Industry.

This is estimated to require P6.4 billion mainly for the use of 40,000 hectares of land.