You are Leandro Fonseca-Valadares, 45, CEO of Café Sabiá, a São Paulo roasted-coffee company your father founded. The brand is strong, the balance sheet is healthy — and the Brazilian ground-coffee market has stopped growing. The board wants the company's first real diversification. They meet in three weeks.
The situation
Café Sabiá sells roasted-and-ground coffee — R$ 620M in revenue, strong in supermarkets and food-service across the Brazilian southeast. The company is good at three things: sourcing and blending agricultural commodities, a trusted consumer brand built around the daily warm ritual, and a sales force that owns the relationships with grocery and food-service buyers. The core market is mature. Cash is piling up. Standing still is not a plan.
Three diversification moves are on the table. Launch a line of ready-to-drink bottled coffee — chilled, canned, sold cold. Extend the Sabiá brand into hot infusions — premium tea, hot chocolate, herbal blends. Or open a chain of Café Sabiá coffee shops. The board's instinct is the first one: "It's coffee. Stay close to what we know." You want to interrogate what "close to what we know" actually means.