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Lavazza continues expansion with North America purchase

Luigi Lavazza SpA, the Italian coffee manufacturer owned by the founding Lavazza family, announced yesterday it plans to acquire a 7% share in US coffee company Green Mountain Coffee Roasters Inc for $250 million.

The deal, expected to close in September, is the latest in a series of acquisitions by the Turin, Italy based company. Over of the last few years, Lavazza has bought coffee-based businesses in Argentina, Brazil, and India. Its most recent venture into Argentina saw the company acquire office coffee services business Coffice for €3.5 million.

This is Lavazza's largest foreign strategic purchase so far.

Lavazza and GMCR announced they plan to work together to develop GMRC's single-serve espresso machines.

In a statement announcing the deal, Lavazza's non-family CEO Gaetano Mele, said: "The distribution agreement we expect to consummate in the near term should represent a unique opportunity to fully develop the potential of the authentic Italian espresso, and espresso-based beverages, in North America."

He went on to say: "We are confident that this investment is but the first step in a wider-ranging collaboration with GMRC in R&D innovative technology and international expansion for both companies."

The deal also allows Lavazza to elect a representative on the GMRC board in the future and purchase up to 15% of GMRC's outstanding shares. 

Lavazza enjoys a 47% share of the retail market in Italy, but faces competition from international rivals such as Nestle's Nespresso brand, which saw revenue growth of nearly 25% in the first half of 2010.

Lavazza was founded in 1895 by Luigi Lavazza and is still owned by the Lavazza family. Earlier this year third-generation honorary president Emilio Lavazza died at the age of 78. (Continue reading here)

Emilio Lavazza was notoriously media shy, only giving one interview in nearly 40 years as the company head. However, Campden FB talked to his son Giuseppe Lavazza, vice president and marketing manager at Lavazza, in 2007 about the success of the business and the work it is doing to make coffee production more profitable and environmentally friendly for coffee growers. (Read the full interview here)

The Lavazza board is made up of six family and three non-family members, who control the company that has revenues of €1.1 billion.  

Picture: The Lavazza family in 2007

 

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