The coffee market - Italy (2024)

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 hand, is concentrated in Asia and Africa, with Vietnam the leading producer of robusta and the world's second largest coffee producer after Brazil with ** percent of total production. Indonesia is following the same path: it surpassed Colombia's production level in ****, and is now the world's third largest coffee producer.

The main differences between the two varieties are as follows. Arabica coffee contains *.* percent caffeine, while Robusta coffee contains almost twice as much. In addition, the Arabica coffee plant is a fragile tree that grows slowly at altitudes between *** and *,*** meters, while the Robusta coffee plant, named for its hardiness, is grown on the plains between * and *** meters above sea level.

Coffee remains primarily an export crop: nearly three-quarters of the crop is sold on the international market. Traditionally, the European Union and North America are the regions where most is consumed: the two continents account for half of global demand ...

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 euros, showing significant growth from the **** figure of *.* billion euros. In the last five years available in the Istat database (***), a growth of **.* percent is noted.

Turnover of companies active in coffee processing Italy, ****-****, in billion euros (***) Istat

Analysis of the value of coffee production in Italy reveals a significant growth trend, with an increase of **.* percent from ****. The **.* percent rise in coffee production is indicative of several positive factors in the sector, including increased domestic and international demand, improvements in production and roasting techniques, and increased attention to the quality of the finished product.

Value of production (***) Italy, ****-****, in billion euros (***) Istat

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 trend, leading to a **.* percent increase in **** compared to ****.

Exports, Imports and Coverage Rate (***) Italy, ****-****, in millions of dollars (***) UNComtrade

Germany represents a significant market for Italian coffee, being one of the main consumers and importers of coffee globally. Consuming about * cups of coffee per capita per day, Germany shows an increasing focus on product quality, preferring to consume coffee in larger quantities than the typical Italian espresso.[***] This is followed by France (***).

Distribution of exports among the top * consumer countries (***) Italy, ****, % UNComtrade interestingly, more than half of Italian coffee imports come from Brazil (***), with the best quality arabica beans coming from Brazil and the best quality robusta beans coming from Vietnam. This is followed by Uganda and France, with *.* percent and *.* percent of total imports, respectively. Breakdown of imports among the top * supplier countries Italy, ****, % UNComtrade

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 sector, which have been faced with logistical challenges and fluctuations in material prices. Specifically, we see a rise in consumer prices of *.* points(***) from February ****, -the month in which the conflict broke out-, to December ****, -the latest available data.

Consumer price index in coffee Italy, ****-****, base ****=*** Istat

The consumer price index is a reflection of the index ofproducer prices; again, it shows an increase in value of*,*%from February **** (***) to October ****.

Producer price index (***) Italy, ****-****, base ****=*** Istat

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 household expenditure (***) Italy, ****-****, in current &euro Istat

The following data are extracted from a study conducted in **** by AstraRicerche on behalf of the Coffee Promotion Consortium through online interviews with a representative sample of *,*** Italians aged **-**. It can be seen that **.*% of respondents consume coffee every day, while **.*% only once a week.

Frequency with which Italians drink coffee Italy, ****, % Caffebenessere

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 consume coffee Italy, ****, % Caffebenessere

For most consumers, coffee is a recharge of mental strength and physical energy(***) to be shared with others.

Why do people consume coffee at coffee shops? Italy, ****, % Caffebenessere

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 a spending value of €**.**.

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 in their relationship with consumers, trying to establish a strong and stable bond of trust. Undoubtedly, environmental issues are also central, so much so that ** percent of respondents say they believe that companies are committed to reducing environmental impact from the point of view of product packaging and production methods.

What are coffee processing companies most committed to? Consumers' opinions Italy, ****, % Caffebenessere

For coffee consumers, sustainability is a factor of growing importance. The survey shows that for **.* percent of consumers, environmental sustainability is essential. This includes practices such as carbon footprint reduction and sustainable use of resources. Social sustainability, which includes issues such as fair working conditions and support for coffee-producing communities, is a priority for **.* percent of consumers. Finally, ** percent consider economic sustainability, which involves fair compensation for producers and the long-term economic stability of the coffee industry, to be essential. These figures reflect a growing interest in more ...

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 ****, amounting to -*.*%.

Enterprises active in coffee processing Italy, ****-****, number of units Istat

The distribution of legal forms shows an interesting variety. **.*% of enterprises are represented by sole proprietors, freelancers and self-employed workers, underscoring a strong bias toward sole proprietorships. Limited liability companies(***) make up **.* percent, indicating a preference for this legal form that limits members' liability. General partnerships, which imply unlimited member liability, account for **.* percent, while limited partnerships, with a structure that combines general and limited partners, are **.* percent.

Legal form companies active in coffee processing Italy, ****, % Istat Employees in the sector follow the trend of active enterprises; in fact, it can be seen that from **** to **** there was a significant increase of **.* percent. Number of employees of active enterprises in coffee processing. Italy, ****-****, in thousands Istat

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 of the beans. Harvesting: coffee beans are harvested by hand or by machine. This process can vary depending on the location and type of plantation (***). Processing: after harvesting, the beans are processed to remove the outer shell. There are two main methods: wet way (***). Drying: the beans must be dried in the sun or in special machines to reduce the moisture content. Export: green coffee beans are then exported from producing countries to consuming countries. Roasting: crucial stage for flavor development. Grinding: roasted beans are ground into different grain sizes depending on the type of coffee to be prepared (***). Packaging and distribution: after grinding, the coffee is packaged and distributed to various outlets, such as supermarkets, specialty stores, or coffee shops. Retail: the stage at which coffee reaches the final consumer, either in the form of packets to be prepared at home or as a ready-to-drink beverage in coffee shops. Consumption: ...

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 the sector over the past five years, amounting to +**.* percent.

Firms active in the coffee wholesale trade Italy, ****-****, in thousands Istat

Businesses active in the retail trade of roasted coffee, on the other hand, sell directly to end consumers. These may include supermarkets, specialty coffee shops, or e-commerce. These retailers offer a variety of products, from coffee beans to ground blends, capsules, and pods. Growth in the sector here has been steady, with no downward trends. In ****, active businesses grew by +**.* percent.

Active enterprises in roasted coffee retail trade Italy, ****-****, in thousands Istat Finally, coffee shops represent another key element in coffee distribution. They provide a direct consumer experience by serving freshly brewed coffee. Coffee shops can range from traditional establishments to international chains, often also offering additional services such as pastries and snacks. A decrease in the number of coffee bars and other similar establishments of -**.* ...

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 in fact, since it is cents of dollars. The most significant last change, from $*.** USD cents per *** grams (***) in June **** to *.** in February ****, is +*** percent in only a year and a half, but this is equivalent to a price increase of only *.** USD cents, or ** euro cents.

Coffee prices World, ****-****, $USD cents / livre (***) Source: ****

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, Arabica accounted for about ** percent of production and Robusta for ** percent. This breakdown also applies to the Italian market

In Italy, most coffee is consumed at home (***), while **.*% is consumed at bars and **.*% at restaurants. Coffee consumption in an outdoor environment remains important in Italian culture.

Below we detail the different categories of coffee available on the market.

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 that allows us to measure inflation and estimate, between two periods, the average change in the prices of products consumed by households. We see that it increased until ****, then lowered again until **** and to grow significantly again from ****, registering an increase of **.* percent compared to ****.

Italy, ****-****, ISTAT Index Source: ****

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 methods that support biodiversity and soil health.

The benefits of ecological coffee are many for both the environment and the health of consumers. In fact, consuming organic coffee means reducing exposure to potentially harmful chemicals, contributing to the reduction of greenhouse gas emissions, and supporting agricultural practices that protect bird and insect habitat, thereby promoting biodiversity.[***]

Organic certification is a key element of green coffee, ensuring that the product meets strict standards of production and processing. This certification is issued by official, independent bodies and requires producers to follow precise rules to ensure their coffee is labeled organic. The certification process includes regular inspections and detailed documentation of farming and production practices.[***]

In addition, sustainability in coffee extends beyond the environmental aspect to include economic and social sustainability. This concept, known as the triple bottom line (***), emphasizes the need to ensure fair living and working conditions for coffee producers by ...

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 hygiene of foodstuffs Law No.***, **.**.****, and its implementing regulations, concerning the hygienic regulation in the production and marketing of food and beverages Circular **.**.****, No.** and its update concerning guidelines for the development of voluntary manuals of good hygienic practice in foodstuffs EC Regulation No.****/**** of **.**.**** setting maximum levels for certain contaminants in foodstuffs EC Regulation No. ***/**** of the European Parliament and of the Council of **.**.**** and subsequent updates of which the latest No. ***/****, on maximum residue levels of pesticides in or on food and feed of plant and animal origin and amending Council Directive **/***/EC Decree of the Ministry of Health **.**.**** as amended by Decree of the Ministry of Health **.**.**** and **.**.**** - Transposition of Directive No. **/***/EC on maximum residue limits of active substances of sanitary preparations tolerated on and in products Presidential Decree **.**.****, No.*** - Regulations for the hygienic regulation of the production and trade of coffee and its ...

6.1 Segmentation

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