beyondbrics

By Janie Hulse in Buenos Aires

With half its population tracing roots to Italy, it may be surprising to learn that up until recently Uruguay’s coffee scene was limited and somewhat uninspiring. While coffee drinking is common, most Uruguayans have preferred their self-prepared thermoses of mate, a bitter herb sipped with a metal straw out of a small container.

But coffee snobs can rejoice. A recent influx of high-end Argentinean coffee chains means Uruguay’s more discerning caffeine junkies can now get their fix. 

“Uruguay has a long history of coffee drinking, what is new is the proliferation of gourmet coffee through the expansion of the international chains”, explains Carlos Carro, the manager of the Argentinean Havanna chain´s international network.

Havanna, a high-end coffee retailer known best for its traditional cookies filled with dulce de leche, is moving into Uruguay next month. Already present in eight other Latin American countries and Spain, it’s surprising that Havanna has waited so long to penetrate its neighbour’s market. “At this point, proximity, cultural affiliation and market growth make it hard for us to stay out”, says Carro.

Havanna, operating under a franchise model, will open its first shop in an undisclosed location in Montevideo next month and is looking to expand further in the capital city and in the exclusive beach resort Punta de Este.

Havanna is not alone. Other big Argentinean chains like Bonafide and Café Martinéz already have a presence in Uruguay. McDonalds is also successfully expanding its McCafé in the country. There have even been rumours that local investors are trying to gain the rights to open up Starbucks in Montevideo. (The American coffee giant has spread like wild fire in neighbouring Argentina since 2008.)  But alas, it appears that Uruguay´s market remains too small to interest the Seattle-based group.

But just because it’s small doesn’t mean it’s not beautiful.

According to a study conducted by A.T. Kearney, Uruguay is one of the top ten most preferred countries for business expansion, mostly because it is seen as a launching point for bigger, neighbouring markets. It ranked eighth place in the 2010 Global Retail Development Index (FRDI) together with other countries – big and small -like China, Kuwait, India, Saudi Arabia, Brazil, Chile, United Arab Emirates, Peru and Russia. Slow growth and volatility in more developed markets are prompting investors to look abroad.

While by no means an utopia, Uruguay is one of the safest bets in the Latin American region thanks to years of strong economic growth and a long history of political and social stability. Globalisation has also created more discriminating and sophisticated consumers in Uruguay. Spending money in hand, they are returning to their Italian roots and demanding premium espresso.

Related reading:
Argentina’s poor cousin? not Uruguay, beyondbrics
Latin America’s impressive little guys: Uruguay and Paraguay, beyondbrics
Uruguay file, beyondbrics