кейси для індивідуальної роботи 2014 н.р. / LAVAZZA SPA, LUIGI IN HOT DRINKS

While Lavazza’s stake in Green Mountain was a shrewd move, the company’s best prospects for growth lie in its alliance with Keurig as an attempt to enter the pod coffee market in the US in its own right.

The US is expected to maintain its position as the biggest fresh coffee market over the forecast period, with sales expanding by US$500 million over the 2011-2016 period. Despite a difficult economic environment, few in the US seem to be willing to trade down to economy coffee. The only compromise many are willing to make is to brew their coffee at home and reduce on-trade consumption. Reflecting this, is the increased penetration of fresh coffee sold in coffee pods. Coffee pods’ value share of fresh coffee sales increased by eight percentage points to reach 9% in 2011.

Overall, fresh coffee in the US is set to post a 1.2% CAGR over 2011-2016 with pods at 12.3% CAGR, while instant will see a CAGR of 2.2%.Growth in off-trade sales reflects the consumer shift to purchasing coffee to brew at home in order to save money. The acceptance of singlecup brewing systems during this period will fuel the growth in off-trade sales of coffee during the economic recovery.

Value sales (US$ billion)

US: Hot Drinks Value Share

Breakdown by Company 2011

JM Smucker Co, The

Starbucks Corp

Kraft Foods Inc

Green Mountain

Coffee Roasters Inc

Unilever Group

Others

US: Coffee Growth by Category 2006/2011/2016

7

6

5

4

3

2

1

0

In absolute value growth terms, the market posing the greatest opportunity is France where some US$688 million of additional sales are expected in the fresh ground coffee pods market by 2016.

A problem Lavazza has to overcome however is that the company currently has no significant market share in fresh ground coffee pods in France, but only in standard fresh ground coffee in which it is the fourth biggest player. France is the ideal logical next step for Lavazza to push sales of its Lavazza A Modo Mio brand and the company should look to do this.

France: Standard Fresh Ground Coffee Value Sales by Company 2011

Lavazza

Segafredo Z

Sara Lee

Kraft

Value sales (US$ million)

Total value growth (US$ million)

Value CAGR

Lavazza Value Sales and Share of

Chained Specialist Coffee Shops 2011

India: Coffee Value Sales by Category 2006/2011/2016

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

The Indian strategy

Hints of focus on at-home market in India

In 2011, Lavazza through its Fresh & Honest subsidiary launched a new coffee pod system - the Lavazza LB 850. Tata Croma is the exclusive retailer for the machine at present although it is also available for sale at select Barista locations.

The attempt to increase its penetration in the offtrade marks something of a change in direction for Fresh & Honest, which has primarily focused on the foodservice channel through its hospitality and corporate clients. The at-home segment, however, is likely to increase in importance for the company.

Coffee pod penetration is very low in the Indian market owing to high price points relative to the average Indian income. The LB 850 retails for around Rs13,500. In 2010, coffee pod sales were negligible in the market. Lavazza’s entry into this segment therefore gives it an early mover advantage. The contribution of sales, however, from coffee pods for Fresh & Honest is likely to be very small for some time to come.

Barista chain evolves its product offer

The Barista chain is divided into two formats, Barista Espresso and Barista Crème. Barista Crème is a new addition to the Barista chain and numbers only 15 outlets thus far across India. It is positioned as a coffee lounge, established to provide a more upmarket and relaxed place to socialise. To that end, the Crème format offers a fairly extensive food menu unlike the Espresso format, which focuses on coffee, soft drinks and desserts.

Lavazza has expanded Barista’s revenue from merchandise to include travel mugs, key chains, business card holders, a range of Barista ice cream for take home and chocolates. The offer of the new Lavazza LB 850 is yet another addition.

In 2011, Lavazza announced that in partnership with Visa it became the first Indian retailer to offer a cash withdrawal facility at point of sale enabling all Visa debit cardholders to withdraw cash from their accounts, as well as pay for their food and beverages at the till.

Lavazza was the leader in the Italian fresh coffee category in 2011 and is synonymous with premium coffee across most of Western Europe. Lavazza A Modo Mio is the company’s best-selling coffee pod system. However, its sales are modest outside Italy.

Lavazza’s entry into the Indian market in 2007 has seen it increase its position in the office vending segment through the Fresh & Honest brand. Thus far the brand has not established a significant market share. The acquisition of the Barista specialist coffee shop chain in India has been followed by efforts to integrate the brand with that of Lavazza.

Lavazza Brand Value Sales Breakdown 2011

Lavazza

Lavazza A Modo Mio

Lavazza offers most of its products under the Lavazza umbrella. Within its domestic Italian market, the company has established a massto premium brand profile, although of late it has been working to reinforce its standing in the upmarket segment, repositioning massmarket labels such as Lavazza Paulista.

In the company’s newer international markets, it has looked for markets with a growing café culture, eg India, Bulgaria and Argentina. Thus far it has not managed to leverage its increased presence in foodservice into the retail market for coffee. However, Lavazza sees these investments as opportunities to raise the profile for its brand such as by gradually substituting the Barista brand of coffee for Lavazza at the Indian coffee chain where the brand is available in fresh ground coffee and fresh coffee beans. However, its weak presence in instant coffee may mean that it could miss the growth opportunities in instant coffee in this market as well.

Value sales (US$ million)

Lavazza: Global Brand Sales by Country 2006-2011

1,400

1,200

1,000

800

600

400

200

0

Absolute value growth (US$ million) 2006/2011

% CAGR 2006-2011