Winners see fertile opportunities during times of crisis
When I’m at business or academic forums, I’m often asked to share anecdotes about Café Britt and our secrets to success.
How can a company that was born within Costa Rica’s most traditional industry – an industry that is perpetually in crisis – sustain 850 employees in seven countries, 57 stores, and a thriving on-line coffee business? Even more, how can we manage all this during the worst world economic crisis in 60 years and continue to actively invest in international markets?
I’ll tell you how in two words: irreverent innovation.
First lesson: “Create something new and relevant and you’ll become irreverent.”
When I met Café Britt founder Steve Aronson in 1990, he asked me if I wanted to sell and distribute inside Costa Rica the best “exportation-grade” coffee that the country produced. I didn’t find out until later that Costa Rica’s laws at the time made domestic sale of export-grade coffee illegal.
According to the laws back then, we Costa Ricans were only allowed to drink coffee of “local consumption-grade.” Coffee of this “quality” was first required to be sold at domestic auction and undergo a “dying process.”
In other words, “local-consumption” coffee was of such poor quality that it was dyed a greenish-blue color to ensure that it never, ever be exported!
The country’s coffee mills, by law, were required to deliver to the national coffee auction 10 percent of their crop for domestic sale. In exchange, they were paid less than half of the international market price.
Naturally, the mills delivered the very worst coffee they had. Industry lawmakers didn’t deem Costa Ricans worthy enough to drink the country’s finest coffees. The slogan might have been: “The best to the world, the worst to ourselves.”
At Café Britt we irreverently challenged this system. We told the country’s highest-level industry regulators that we were going to roast Costa Rica’s finest coffee and sell it locally. And what a waste of quality, we said, to have to dye it blue.
We changed the rules. We were the leaders in ending the era of coffee dying and the mandatory coffee auction. For us, this was like the fall of the Berlin Wall!
Our liberating work to topple this “Berlin Wall,” this wall that separated Costa Rican consumers from export-quality coffee, earned us admirers as well as detractors.
Second lesson: “You’ll encounter resistance from the highest authorities.”
By nature, these high authorities, experts and gurus, the oldest and most-respected business chambers' leaders, these “keepers of conventional wisdom” won’t like your irreverent ideas, especially if they’re good ideas. They’ll strongly resist change. Be prepared for it.
Costa Rica has been exporting what we consider some of the world’s finest coffee for 200 years. Before Britt, we exported it as a raw material. In fact, roasters outside the country would often mix Costa Rican coffee with inferior coffees to improve their blends. Coffee drinkers had no idea that it was the Costa Rican component that made their blend taste and smell so good. Costa Rican coffee was a commodity. It had no unique identity abroad.
When Britt launched its plan to export roasted coffee – a value-added product – the experts predicted failure for two reasons:
1. “It doesn’t work that way. We’ve never done that before.” That was the credo of industry experts. I encounter attitudes like this even today. While others were stuck to 200 years of tradition, we at Britt were blazing our own path.
2. I find this second reason fascinating. The experts said that if we were successful in selling fine Costa Rican roasted coffees in international markets, that the world’s big, multinational roasting houses wouldn’t like it. The competition would make them angry. In other words, our role was to continue to be the good “banana republic,” exporting only a raw commodity — and to make sure we weren’t rocking anyone else's boat.
Third lesson: “Use the crisis as a catalyst for innovation.”
When survival is at stake, you see outbreaks of innovation. All crises require profound, timely and unexpected changes. In this environment, those who don’t innovate lose. Those who do, become winners.
The coffee industry’s almost constant state of crisis forced us to reinvent ourselves. We were the first world-class roaster to add value to the coffee we export by roasting it and packaging it in its country of origin.
Over 99% of coffee traded worldwide is exported as a raw material, not as a finished good. All — 100% — of Café Britt coffee is freshly roasted and packaged in its country of origin, this makes us unique.
We created a new, profitable, innovative and technologically advanced industry. And we continue to topple “walls,” cross borders, challenge laws and win over bureaucracies, blazing the trail as we go.
When this economic crisis ends, we’ll see winners and losers. I predict that the “winners” basket will contain the most daring people and companies that took advantage of the crisis as fertile soil for irreverent innovation.-Pablo Vargas, Dec 2009