Introduction
Lavazza, the renowned Italian coffee maker, is set to expand its presence in the U.S. market while evaluating the potential of its Brazilian beans before deciding on increasing local production.Context
Lavazza currently produces approximately 50% of its U.S. sales locally at its facility in West Chester, Pennsylvania. This strategic move comes as the company aims to capitalize on the vast size of the U.S. coffee market.Developments
Chief Executive Antonio Baravalle outlined the company's plans during a press conference in Milan, highlighting their intent to boost output to 100%. Baravalle noted that while they are prepared to expand, they must first consider the implications of existing tariffs, particularly the 10% levy on Brazilian coffee imports.He stated that increasing U.S. production would require an investment of 18 to 24 months. The family-owned company, which reported revenues of 3.35 billion euros in 2023—a 9% increase from the previous year—also noted a significant rise in core profit, up 18.6% to 312 million euros, despite a 70% spike in green bean prices.
Despite its expansion plans, Lavazza is not currently looking to pursue further acquisitions, as Baravalle mentioned, "We already have enough on our plate."