Four years after an IPO intended to give it the financial clout it needed to grow, family-controlled Massimo Zanetti Beverage Group is expanding, entering new markets, and launching products in new channels
Family-owned Italian coffee companies have been faced with some hard choices in the last few years. As the global coffee-roasting industry consolidates, companies such as Lavazza, Illycaffe and Massimo Zanetti Beverage Group (MZBG) have adopted different strategies.
Illycaffe remains fiercely independent. It said recently that it could bring new investors on board in the medium term, but the founding family wants to keep control of the business and has consistently rebuffed overtures from larger rivals looking to buy it. It signed a licencing deal with conglomerate JAB Holding to produce and sell Illy-branded coffee pods that work in rival Nestle’s Nespresso machines, but the company stopped short of giving JAB – the holding company of Germany’s Reimann family and owner of other coffee companies including Jacob Douwe Egberts and Keurig Dr Pepper – a stake in the group. Illycaffe says it has no plans to grow through acquisitions.
Lavazza remains family-owned and has made a number of acquisitions in the last few years – including Mars’ coffee-focused drinks business, Blue Pod Coffee in Australia and Kicking Horse Coffee, a Canadian Fairtrade and organic player – in an attempt to further spread its wings beyond Italy, secure a larger international portfolio and move into new segments of the coffee sector. Those deals followed the acquisition of Carte Noire and Merrild.
North America remains an important target market for it. It is said to have considered an IPO, but has not embarked on one – at least for time being.
IPO has enabled Expansion
MZBG remains family-controlled but initiated an IPO four years ago. It is unique among its peers in having done so, but has followed a similar strategy to Lavazza, making a series of acquisitions and evolving into new segments in the market. It’s strategy that the company’s Chief Operating Officer (COO) Pascal Héritier said has enabled MZBG to achieve many of its strategic objectives.
Speaking exclusively to C&CI in mid- March, Mr Héritier noted that the group was founded almost 50 years ago by Massimo Zanetti and is now one of the leading companies in the coffee industry and has a global presence. He highlighted the group’s vertically integrated position in the value chain as a distinguishing feature. “We are satisfied with the positive effects of being a public company,” he told C&CI. “The management team here intends to continue working on our global strategy. In the last few years growth has been very positive, and we are optimistic for the future years thanks to a strong management team, strong brands and the excellence of our products.”
Growing organically and by acquisitions
Asked if it remained the company’s strategy to remain primarily family-controlled and grow organically and by acquiring companies that complement its existing portfolio, as a recent steady stream of acquisitions would seem to suggest, Mr Héritier said, “Yes, correct. The strategy is to remain a family-controlled company and grow organically, and through strategic acquisitions, in order to focus on new markets, or expand more rapidly where we are already present.”
The Asia Pacific region is one that the company is interested in and MZBG recently finalized the acquisition of The Bean Alliance, a company in Australia. “The Bean Alliance is well-known for its product innovation – in particular in the local roasted channel – and for a focus on sustainability, as confirmed by the many awards and certifications it has obtained,” Mr Héritier explained.
“The acquisition, driven by strongly complementary product ranges and commercial and industrial synergies strengthens MZBG in the Australian market and opens up development opportunities in the APAC market. What is more, in Asia we have recently opened a new branch in China and strengthened our presence in Thailand and Indonesia by opening new showrooms.”■ C&CI
This extract is from an article that first appeared in the May’19 issue of C&CI. Click on subscribe now if you wish to read more informative articles in the current and future issues of C&CI.