Entrepreneurship, Edition 50

Café Punta del Cielo: Story of an Entrepreneur

By: Claudia González Brambila, Luis Arciniega and Daniela Ruiz
Instituto Tecnológico Autónomo de México

Pablo González Cid, founder of the Café Punta del Cielo, discovered his entrepreneurial spirit when he was a young university student and worked as a messenger at a brokerage firm. He realized that to be director he would need to work many years and be promoted to an infinite number of positions, and that, in the end, he might never reach his desired position.

His entrepreneurial spirit was further motivated when, at that age, he was without a car after getting into an accident. It was then that he decided to start his first business: selling fish to restaurants. His hard work allowed him to meet important restaurateurs, who increasingly requested his services, and in this way he was able to grow the business. But there was something he could not quite get used to: the smell of fish.

At that time his family had brought the Gloria Jeans franchise to Mexico, and each time he went to the coffee shops, his passion for coffee grew. It was then that he began to study and analyze what made a cup of coffee taste good. He compared qualities of beans, planting and harvesting techniques, favorable climates and regions, forms of roasting, and even ways of preparation. His enthusiasm and his knowledge of coffee were such that he began to document his findings, and he even ended up writing a book on the subject.

In Search of the Best Cup of Coffee

The more he learned about coffee, the more he wondered why Mexico did not have a brand of this product, as did Colombia or Italy. If Mexico is the sixth largest producer of coffee in the world, and the leading producer of organic coffee, why is Mexican coffee associated with a poor, rural Mexico? Why is the per capita consumption of coffee so low in Mexico? Why are we not known for good coffee? It was then that he took on the task of creating an identity for a Mexican coffee, of the highest quality and with an elegant, modern touch.

With that vision in mind, Pablo set out to find where high quality coffee was planted and harvested in our country. He was convinced that he had to pay well for good coffee beans, and this motivated producers. So with the highest quality raw material, he took charge of roasting and packaging it himself. Roasting was not a major challenge. Packing was another story. Pablo wanted to capture the aroma of the coffee that he had produced. And with that challenge, his spirit of technological entrepreneurship emerged. He spent all of his free time and weekends creating a package that would lock in the flavor and aroma of the coffee, so that people would enjoy preparing the “best” cup of coffee. After five years of trying and some explosions, he finally captured the aroma of coffee in cans with a valve, which prevented the pressure from the aroma from making them explode. In this way, the customer could depressurize the container before opening it, and fall in love with the coffee that he/she is going to drink. This first innovation gave Pablo his first patent.

But the challenge of the “best” cup of coffee was not resolved yet. Preparing a good expresso requires a fine grind and a precise amount of coffee, among other things. It was then that he decided to create a few pods that had a good grind and the exact portion needed to prepare it.

The First Coffee Shop

With these proven innovations, Pablo needed to have an appropriate space to share his love of Mexican coffee with others. It was in 2004 when he opened the first Café Punta del Cielo on the corner of Arquímedes and Presidente Masarik. Of course, the store also reflected the modern and contemporary tone that characterized his product. The location could not have been better, and that was also a result of his entrepreneur zeal. That corner had been abandoned for several years, due to legal issues. Pablo knew that it was important to start on the right foot, and that meant having a good location, which was visible, in a busy commercial area, but the lack of resources limited his options. It was then that he was determined to get the place. The location was ideal, and because of the litigation involved, it was very reasonable compared to the rest of the area. In four months, he worked things out, adapted it, and soon everyone who visited Polanco could see the new Café Punta del Cielo coffee shop.

This coffee shop allowed him to approach the market, and for consumers to try out the entire line of innovative products and beverages. Then new challenges emerged. At that time there was a boom for iced cappuccino, but the 100 percent natural coffee made the milk curdle. Pablo began experimenting again to develop a product in which he did not have to use flavorings or a lower-grade coffee. After many attempts he found the formula, and was able to sell cappuccino in cans. Then came other innovations in drinks and coffee-related items. They included 100 percent natural coffee bean drops, chocolates made with coffee, and various expresso-based drinks.

Pablo was committed to accomplishing his dream and would not rest until it came true. The style of the coffee shop had passed the test, and gradually there were more customers and a sense of loyalty began to develop. But Pablo did not see himself managing a coffee shop all of his life. On the contrary, he knew he liked innovation, not management. He set new goals and went to work to achieve them.

Planning and Managing Growth

Pablo wanted to position Café Punta del Cielo throughout the country, and that meant building the business quickly. The entry of national and imported coffee bars was growing by leaps and bounds, and that forced him think about a different business model. So it was that creativity that made him conceptualize three distribution channels: sales of prepared coffee in coffee shops; sales of coffee to corporations, restaurants and hotels; sales of ground coffee or beans, canned or pods, prepared naturally, in convenience stores and supermarkets.

The first coffee shops belonged to him, but opening new shops required a huge investment that Pablo did not have, so he opted for franchising. Thus, there would be other entrepreneurs who would share the risk and provide the resources to grow.

He also made a list of potential customers who might be interested in offering quality coffee. He knocked on several doors, and the first ones to be convinced of the concept were Liverpool and Grupo Posadas de México. The chef at Liverpool was convinced the flavor and quality of Café Punta del Cielo offset the extra price to be paid, and he was right. Grupo Posadas decided it was a good idea to offer the same coffee in all of its hotels, so Café Punta del Cielo offered full service, including not only coffee, but also water and coffeemakers. By 2005, Café Punta del Cielo had a presence in all of the main cities of the country, with relatively little investment.

With such rapid growth, it was necessary to speed up production to meet the growing demand. He decided to get a bank line of credit. With this new injection of resources, coffee production expanded and the product could begin to be placed in convenience stores and supermarkets.

Managing this expansion was another big challenge. Pablo knew he needed a team to support him in this task, and he did not skimp on hiring the best. At first it was not easy. He had to provide a lot of training, good pay and career plans within the company. The entire management team had as a priority that people working for Café Punta del Cielo should be happy.

The rapid development of the business did not distract Pablo’s innovative concerns. This young entrepreneur had a vision of “positioning Mexican coffee as one of the best in the world,” and that meant also proving the concept abroad. He sought, then, internationalization, and in 2008 he opened the first shop in Madrid, Spain, which quickly earned a good reputation. But Spain is one of the countries with the highest coffee consumption per capita in the world. In addition, Spain and Mexico are sister countries that share the same language, culture and customs. It was necessary to find more difficult challenges. So it was decided to test the concept in a country that did not have a long tradition of drinking coffee and that was very different culturally to Mexico. In 2010, the first shop in Hong Kong was opened.

Innovation continues to be the mainstay of Café Punta del Cielo. There is much to invent and improve. Currently, they are already working on a second generation of coffeemakers, more automated, user-friendly, and that use less energy. Undoubtedly, there is still much to be done, but so far, Café Punta del Cielo has shown that it can contend with the larger competitors in the world and innovate in an industry that apparently was mature. Today, millions of Mexicans (and a growing number of foreigners) recognize the value of The Great Coffee of Mexico.

References

  • Extract from book

    Gonzalez-Brambila, C; Arciniega Ruiz de Esparza, L; Ruiz Massieu, D. (2013) Un Camino a la innovación tecnológica en México: 15 casos de Éxito. Cengage Learning.

Post a Comment

Your email is never published nor shared. Required fields are marked *

*
*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>