Global coffee giant Lavazza grew global revenues to over €3bn last year, but soaring coffee bean prices hit the group’s profits.

Reporting its global results for the year to 31 December 2023, Lavazza said revenues had increased 13% year on year to €3.1bn, helped by the acquisition of MaxiCoffee in France at the end of 2022.

In single-serve capsules, volumes jumped 15.3% compared to market growth of 3%, aided by the launch of the updated range of NCC capsules.

It said its beans business segment continued to grow, with sales up 6.6% and market share growth of 9.1%.

Geographically, Lavazza Group reported strong growth by value in the retail channel in all markets and particularly in the US (+9.8%), Poland (+21%) and the UK (+8.6%). Italy and France, the group’s most important markets, also recorded increases of 6.3% and 5.8% respectively.

Group EBITDA fell to €263m from €309m as the company sought to limit consumer price increases in an inflationary environment, absorbing part of the cost increase within its margins.

Net profit totalled €68m, compared to €95m last year.

Lavazza said it faced “some major challenges”, particularly rising raw coffee costs for robusta, which peaked during the year at close to $3,200/ton, and extremely high prices persist.

Consequently, this level of inflation in all markets has eroded consumers’ purchasing power and affected industry volumes, with the coffee market reporting a contraction of about 3% in 2023.

“In 2023, the macroeconomic scenario for the industry was extremely complex due to the sharp increase in the cost of the raw material, with prices at record levels for green coffee and robusta in particular,” said Lavazza Group CEO Antonio Baravalle.

“Nevertheless, we chose to limit price increases on our products to protect consumers, maintaining volumes but sacrificing our profitability. Lavazza Group’s robust financial health, however, enabled us to seize major market opportunities and deliver growth through acquisitions, such as the French business MaxiCoffee, achieving record revenues of over €3bn.

“In 2024, we are addressing the current difficulties while anticipating a return to more favourable conditions, with the primary aim of recovering gross operating margin. This will be helped by the sacrifices made in previous years, our solid consumer and customer base, and a constant focus on financial and operational management.”