Summary of our market study

The global coffee market has experienced significant shifts and trends starting from 2020. The coffee sector in Italy faced an 8.6% decline in turnover due to the COVID-19 pandemic, heavily impacting hotels, restaurants, and cafes with a 40% turnover loss, and halving the turnover of automatic coffee machines compared to 2019. Conversely, the retail and e-commerce sectors saw increased turnover. Italian coffee imports from Brazil comprised 26.38% of the total, while exports to Germany accounted for 16.46%. Within Italy, the use of pod/capsule coffee machines has surpassed the traditional moka, rising from 28.8% to 39.5% preference. Coffee pods and capsules have captured a significant market share, with capsules contributing 28.4% to large-scale retail coffee sales and registering a growth of +24% in value and volume by March 2020, and pods approaching 20% growth by May 2020. Furthermore, Italian households increased their coffee expenditure from €9.45 per month in 2014 to €11.16 in 2020, with a marked preference for coffee representing pleasure, relaxation, and social interaction. The ecological impact of coffee pods, particularly their carbon footprint and recycling issues, has also gained attention, prompting brands like Nespresso to implement recycling initiatives and introduce more sustainable pod materials..Italian Coffee Market Analysis: A Tradition of Pleasure and Sociability Italy's love affair with coffee remains undiminished, embracing the legacy of pleasure, relaxation, and convivial moments centered around this beloved beverage. Coffee in Italy is not merely a drink but an integral part of the cultural fabric, reflecting a tradition where flavor and social interaction intertwine. Despite the evident impact of the Covid-19 pandemic, notably with significant decreases in coffee consumption at bars, restaurants, and workplaces, the home has solidified its position as the primary setting for Italian coffee consumption. In recent years, the Italian market has witnessed substantial changes in consumption patterns and preferences. Traditional regular coffee, while still at the peak of favorability, has seen a marked decline, dropping from approximately three-quarters to just under three-fifths of the preference scale between 2014 and 2020. This shift has been accompanied by a surge in the popularity of alternative coffee types such as cappuccino, ristretto, and café latte. The market has also seen notable growth in the consumption of higher-priced segments including coffee pods and capsules, which have largely contributed to the increase in average household spending on coffee, soaring from near 10 euros to over 11 euros per month. The penchant for pods and capsules is also reflected in the choice of preparations, as the iconic moka pot has been surpassed in popularity by coffee machines utilizing pods/capsules. This shift underscores a new direction in the Italian coffee trend landscape, with autonomy and convenience playing a significant role in the consumer's daily coffee ritual. Amidst this evolution, sustainable practices have gained traction, but challenges concerning the ecological footprint of coffee capsules persist, with recycling and waste management becoming more pointed concerns. Despite the shifting dynamics of the Italian coffee market, some factors remain relatively constant - particularly the elements of pleasure and sociability that are the fundamental forces driving the market. The clustering of Italian coffee consumers reveals that sharing and pleasure are vital, a sentiment reflective of the nation’s longstanding tradition and fervent coffee culture..### Major Players Shaping the Italian Coffee Market Landscape The Italian coffee industry is characterized by the presence of a few renowned players that have significantly contributed to shaping the country's coffee culture. Here, we delve into some of these influential market actors, each with its own unique story and approach to coffee production, distribution, and retail. **Lavazza Group** is undoubtedly one of the most iconic and respected names in the Italian coffee scene. With a rich history dating back to 1895, Lavazza has become synonymous with Italian coffee, offering a wide range of products that cater to varying tastes and preferences. The company has also been at the forefront of sustainability efforts and innovative product offerings, including eco-friendly capsules. **Illy** is another celebrated brand, known for its high-quality, single-origin Arabica beans. Based in Trieste, Illy has built a reputation around the world for its smooth, rich, and full-bodied coffee. The company emphasizes the art of espresso making and is a significant player in the global premium coffee market. **Massimo Zanetti Beverage Group**, with its flagship brand Segafredo Zanetti, is an international force in the coffee industry. Spanning across various countries with numerous subsidiaries, they cater to different segments, offering everything from beans and ground coffee to capsules and ready-to-drink beverages. **Caffè Borbone** provides a range of products that capture the Neapolitan tradition of espresso. This company has quickly risen to prominence in the Italian market, thanks to its robust and intense flavors that are particularly favored in the south of Italy. **Kimbo** is a well-established brand hailing from Naples, known for its high-quality espresso blends that are an essential feature of the Neapolitan coffee tradition. Kimbo has a strong domestic market presence and has been making significant inroads in international markets as well. **Nestlé Italy** plays a significant role through its Nespresso and Nescafé brands, offering both convenience and variety to coffee enthusiasts. Nespresso's premium capsules and machines have transformed home espresso consumption, while Nescafé is a go-to for instant coffee solutions. **Caffè Trombetta** is one of the older players in the market, with over 120 years of tradition. The company has adapted over time to offer a wide range of products, including pods and capsules, without compromising on the authenticity of Italian coffee. **Caffitaly** specializes in coffee capsule systems and stands out for its innovative approach to coffee brewing. Their machines are designed

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1 Market Overview

1.1 Definition and presentation

Coffee is a beverage with stimulating and invigorating properties obtained from the infusion of roasted and ground beans. Usually served hot, it can be prepared and presented in different ways. Coffees are sometimes blended to create unique flavors. This technique is called "blending."

There are about 124 varieties of coffee in the wild, which can be divided into two main categories:

  • Arabica coffee: sweet, not very full-bodied and with great aromatic finesse. It accounts for 75 percent of world coffee production and its beans contain about 1.5 percent caffeine.
  • Robusta coffee: more full-bodied, bitter and powerful than Arabica, but less aromatic. It accounts for 20 percent of world production and its beans have a caffeine content of about 2.7 percent.

The market can be segmented by product type (whole beans, ground coffee, instant coffee, pods and capsules) and by distribution chain (hotel, restaurant and cafeteria sector; large-scale distribution, retail).

Coffee is the second most traded commodity in the world after oil and the most consumed beverage after water. The global coffee sector is very dynamic. In July 2021, 10.61 million bags of coffee were exported while coffee prices have increased by 51.3 percent since the beginning of the year. Between 2021 and 2026, the compound annual growth rate is estimated at 4.28%.

Coffee is an integral part of Italian culture. In fact, only 3% of Italians are not used to drinking coffee. In 2018, Italian coffee consumption accounted for 11% of total European consumption. However, the coffee market is highly fragmented, with over 90% independent coffee shops and a small number of international chains in the country.

Thecoffee sector's turnover fell by 8.6 percent in 2020. This decline is due to the Covid 19 pandemic. The hotels, restaurants, and coffee sector lost 40 percent of its turnover, and the automatic coffee machine sector halved its turnover compared to 2019. The retail and e-commerce sectors, on the other hand, saw their turnover increase.

1.2 World market

Coffee, which is differentiated into Arabica and Robusta, is the most traded agricultural product in the world.

Arabica coffee, which accounts for about ** percent of production, is mainly grown in Latin America: the world's largest producer is Brazil, which produces ** percent of the total supply. Robusta coffee production, on the other ...

1.3 Domestic market

The coffee market in Italy plays an extremely important role in the country's economy and culture. Representing a deep-rooted tradition and a national passion, coffee is more than just a drink for Italians: it is a symbol of conviviality, art and refinement. In ****, the Italian coffee market recorded sales of *.* billion ...

1.4 Foreign trade

It can be seen that the value of coffee imports was higher than the value of exports in ****, denoting a negative trade balance. The value of exports has grown significantly in the last five years under analysis, reaching a value of $*.** billion (***). The value of imports has also undergone a positive ...

1.5 Impact of the conflict between Russia and Ukraine

The Russian-Ukrainian conflict has had a significant impact on the coffee production industry, leading to higher producer and consumer prices. Geopolitical tensions have generated instability in supply chains, with disruptions in transportation and access to crucial raw materials. This uncertainty has triggered an uptick in operating costs for companies in the ...

2 Demand analysis

2.1 Demand characteristics

Coffee is a significant staple of Italian tradition, which is why coffee consumption tends to be widespread in the peninsula. It can be seen that the monthly household expenditure item has, however, undergone a significant increase from **** to ****, registering +**.*%. Compared to ****, an increase was also recorded, amounting to **.*%.

Item of monthly ...

2.2 Demand drivers

The customs and habits that bind consumers to this drink are diverse: out of *** coffees, about ** are consumed at home, followed by the bar (***). What is also interesting is what emerged about the personal relationship we have with this beverage, especially when we consume it at the bar.

Favorite places to ...

2.3 Geographical distribution of demand

Regarding the geographic distribution of coffee consumption,it can be seen that the values are almost similar across the peninsula. The highest spending value is concentrated in theSouth (***) where consumption is around €**.* per month; this is followed by the Center, with a value of €**.** and, finally, the North of Italy, with ...

2.4 New demand trends

Consumers' perceptions with respect to the efforts of companies active in coffee processing are interesting; it can be seen that **.*% of respondents believe that the priority of companies is to constantly innovate the product, always offering new things that are appealing to customers. For **.*%, on the other hand, companies work carefully ...

3 Market structure

3.1 Market structure and dynamics

To analyze the size of the market under analysis, we look at companies active in the coffee processing sector. From **** to **** (***) there was exponential growth, recording a value of +**.* percent. Despite this positive trend, it can be seen that in **** there was a decline from the value of activity reached in ...

3.2 Value chain

The value chain in the coffee market can be divided into several key stages, each of which contributes significantly to the final product that reaches the consumer.

Cultivation: the first stage in the value chain is coffee cultivation; this stage includes selection of coffee varieties, care of the plants, and harvesting ...

3.3 Distribution channels

In the coffee market, wholesale enterprises play a crucial role, taking care of buying coffee in large quantities from producers or distributors and selling it to retailers or professional traders. These enterprises focus on logistics, product storage, and sometimes roasting and preparation of specific blends. There is a significant growth in ...

3.4 Main actors

3.5 Prices of raw materials

The market in Italy is globally dependent on the world price of coffee, in the sense that this is the price at which wholesalers and exporting and importing companies buy and sell the commodity.

However, although the curve appears very unstable in the graph below there is very little variation is ...

4 Supply analysis

4.1 Product overview

Overview

There are two main varieties of coffee beans Arabica which grows at high altitude (***) and is the most cultivated, and Robusta which grows at a lower altitude and is more concentrated in caffeine. Specifically, the caffeine content of Arabica beans is *.* percent, while that of Robusta beans is *.* percent.

Globally, ...

4.2 Prices charged in the market

Below, with prices from large Italian retailers as a reference, we find the average price of an espresso, considering using * grams to prepare it and excluding the expense of buying the coffee machine.[***]

In the graph below, we find the consumer price index for coffee in Italy, which is the tool ...

4.3 The ecological coffee

Ecological coffee, also known as organic or organic coffee, is a product that is grown following the principles of organic farming, which aims to minimize environmental impact and promote sustainable practices throughout the production chain. Growing ecological coffee excludes the use of pesticides, chemical fertilizers and genetically modified organisms, preferring natural ...

5 Regulations

5.1 Regulations concerning the production, preparation and sale of coffee in Italy

We list below the articles of law and regulations that apply to the coffee sector in Italy.

Regulation No. ***/**** of **.**.****, laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in the field of food safety Regulation No. ***/**** of **.**.**** on the ...

6 Positioning of actors

6.1 Segmentation

  • Luigi Lavazza Spa
  • Illycaffè
  • Kimbo
  • Caffitaly
  • Caffè Borbone
  • Nestle' Italia

List of charts presented in this market study

  • External trade in coffee
  • Main destinations of Italian coffee exports
  • Main countries of origin of Italian coffee imports
  • Annual coffee consumption
  • Coffee consumption by region
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Latest news

Caffè Borbonne makes its mark on the coffee market - 05/06/2023
  • Founded in 1993 as Renda Distributori, it became Caffè Borbone in 2001.
  • The company began with a production site of just 200 square metres, and now covers an area of over 22,000 square metres.
  • In 2022, Caffè Borbone achieved sales of 262.7 million euros.
  • The company is present in 57 countries.
  • Employs around 300 people.
  • Second brand in the sector in terms of market share and first in terms of contribution to growth in the single-serve coffee category in Italy.
  • Leader in the pod sector and third player in the capsule segment.
  • In 2018, Italmobiliare joined Caffè Borbone and holds a 60% stake.

Companies quoted in this study

This study contains a complete overview of the companies in the market, with the latest figures and news for each company. :

Luigi Lavazza Spa
Illycaffè
Kimbo
Caffitaly
Caffè Borbone
Nestle' Italia

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