illycaffè, record growth with the multi-channel and multi-country strategy

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illycaffè records another year of sustained growth: net profit marks +67.2% on 2022, and Ebitda +18.6%. In a period of growing macroeconomic and geopolitical complexities, and in a sector directly impacted by climate change, “we are very satisfied: our strategy is multi-country and multi-channel, to allow us to manage the situation by minimizing the risk”, explains the to Cristina Scocchia.
Three confirmed investment directions. Firstly, the strengthening of the brand «on criteria of superior quality and sustainability. We firmly use only green arabica coffee, selecting the best 1% of the beans and persevering in regenerative agriculture.” The second area is growth outside national borders, which already today represents 70% of the business: «We are focusing in particular on the USA, a market which is recording excellent results both in online purchases, thanks also to the partnership with Amazon, and in HoReCa. Beyond strategies relating to international growth, multi-channel growth is the third pillar of our strategy: e-commerce is growing everywhere, even in Italy, as are sales in the out-of-home channel”, underlines Scocchia.
Among the complexities to manage, two stand out: the cost of the raw material and that of logistics: «In November 2021, before the pandemic, green coffee was listed on the New York Stock Exchange at 110 dollar cents per pound; it rose to 230, even 240, and today we are at 185, which although lower is still 70% higher than the starting figure. illycaffè’s choice was to increase the price by 3% in 2022 and by the same percentage in January 2023, safeguarding the final consumer also in the name of our being a benefit company”.
As for logistics, costs have increased on average by 30% mainly due to the Suez effect; «It costs more to ship to Asia and the East, but also to America, which is our second market – Scocchia points out – and in general every type of handling is more expensive».
The coffee beans from different origins (Ethiopia, Brazil and other equatorial countries) all arrive in Trieste, where the roasting phase takes place strictly within the company to have total control over the quality, and where all the production is carried out, starting with the most iconic products such as the 250 gram aluminum can. And 120 million of the total 270 million investments contained in the strategic plan updated in December 2023 with a horizon to 2028 are earmarked for strengthening the production capacity of the headquarters. «We invest in what we consider our home, Trieste, also for processing phases that could be carried out in countries with low labor costs. The work began a few weeks ago and the results will also be seen in employment: in the meantime, the transformation of contracts administered indefinitely has begun”, concludes the CEO.