The roasting market - Italy

1.1 Definition and scope of study

Roasting is the process by which a substance, subjected to dryness at a high temperature, is dehydrated, oxidized and partially carbonized. This study will focus exclusively on coffee roasting, and therefore on its consequences on the Italian market. Coffee beans are said to be roasted. Once ground coffee is obtained, there are different markets that are formed, and each of these has its own specificity. While historically ground coffee for moka was the most produced, the portioned sector (capsules and pods) is becoming more and more established.

Despite Italy is considered as the "homeland" of coffee, in the world there are many big producers. Among the three main producers of green coffee are Brazil, Colombia and Vietnam. While Italy is the world's fourth largest exporter of roasted coffee, the country is dominant on the European scene.

Coffee sales in Italy, in stores, supermarkets, hypermarkets and discount stores, increased in value by 10.3% in 2020, compared to 3.5% in the year 2019. The price of coffee per kg, meanwhile (comparison between 2020 and 2019), increased by 7%. It is therefore possible to conclude that this market has not suffered from the crisis due to the pandemic, but has also benefited from it. Differentiating at this point of different segments of this market we can analyze in detail that:

-        Coffee capsules recorded an increase of +26.8%.

-        Coffee pods recorded an increase of +18.2%.

-        Soluble coffee and ground coffee recorded an increase of +3.6% and +3.4% respectively

-        Coffee beans recorded a decline of -5%.

In Italy, there are about 800 companies, to date, active in roasting, with 7,000 employees and a turnover of almost 4 billion, of which a good 35% goes to exports. Of this 35%, the country that is the main beneficiary is the United States, however, a recent trend (since 2013) shows how the United Arab Emirates and China are becoming important recipients of Italian exports.

The main players in this market are both the large roasting houses (Caffè Vergnano 1882) and some medium-small houses of regional production (such as Caffè Barbera dal 1810) and national export.

More and more recent (since at least two years) is the trend of adding coffee to cocktail preparations for pre-dinner drinks. As a matter of fact, coffee is more and more often added in blends based on Vermouth and bitters, flavored bitters, aged distillates such as cognac, brandy, aged rum, but also vodka, gin and grappa. Therefore there is an important opportunity for expansion in this specific sector.