Coffee Consulting

In my site there is a large coffee cooperative.  They grow the coffee in the hills north of where I live and then dry, toast and grind it down the road from my house.  To understand what we’ll be working on, you’re going to need some background on Nicaragua culture.

This is a harsh and huge generalization but Nicas are bad at saving money.  Now I know it’s not their fault; it’s hard to bank money when you’re only making $6 a day.  In addition, not having a physical bank within 30 minutes by vehicle certainly doesn’t encourage the habit.  That being said, it’s also not impossible to save money; there’s a lot of frivolous discretionary spending.  Anyway, I’m getting off track.  Typical behavior indicates that people in my town do NOT buy in bulk.  Again, understandable if you don’t have a refrigerator or just plain don’t have the money.  Example: I need envelopes to mail letters home so I bought a box.  After a couple days the humidity and temperature sealed all the envelopes rendering them completely useless.  Now I purchase envelopes one at a time.  That’s how it works here with everything (except of course our yummy rice and beans).

To tie everything together, that’s how people also purchase coffee.  Nicaraguans never buy coffee in the pound bags like we do.  They buy it in tiny 2oz servings.  Therefore, the coffee coop wants to sell its lower grade coffee in the same single serving size.  The issue is that they cannot match the price of the competitors: $0.15.  They’d like to know if people would be willing to purchase a higher quality in the same size for $0.21.  To find out, we are going to do a market study to find out preference, price sensitivity and brand loyalty.  Next meeting is the 16^th!