International brands eye opportunity in Italy’s world-renowned coffee culture

Italian espresso-based beverages have profoundly influenced global café culture | Photo credit: Gabriella Clare Marino

Now exceeding 1,160 outlets, the Italian branded coffee shop market is the ninth largest across Europe. Following another year of slow but steady growth, the market could be poised for a new wave of development as international operators seek to tap into Italy’s world-renowned coffee culture. 
 

Highlighting the scope of opportunities for coffee chains in Italy, World Coffee Portal data shows 84% of Italian consumers surveyed drink coffee and 35% visit coffee shops daily. Italian coffee shop visitors are also quality-orientated, with 83% of those surveyed citing the skill of the barista as key to beverage quality and 55% recognising specialty coffee as important for a high-quality coffee shop. 

However, while Italian espresso-based beverages have profoundly influenced global café culture, the Italian market itself has historically been difficult for international chains to navigate. 

With espresso widely expected to cost around €1 ($1.07), price sensitivity has often made it financially unviable for foreign branded chains to gain a foothold in Italy. Eighteen of the 24 coffee-focused branded coffee chains in the country are domestic operators. 

However, rising inflation has pushed the average cost of a single espresso 15.6% higher over the last 12 months to reach €1.48 ($1.59). Meanwhile, a growing number of consumers, particularly those under 30, are exploring international specialty coffee culture and premium café experiences. 

Significantly, Starbucks has expressed increased optimism for outlet growth across Italy having doubled its footprint in the country last year. The US coffee giant, which is seeking to reach 37 stores nationwide by 2024, also chose Italy to launch its Oleato olive oil infused coffee range in 2023 – a further indication of growing appetite among Italian consumers for new coffee experiences. 

London-based boutique café group EL&N made its Italian debut in June 2022 and became the first branded coffee chain to enter the Italian market since Starbucks, which introduced Europe’s first super-premium Reserve Roastery in 2018 and Dunkin’, which made its debut in the same year.  

Meanwhile, UK-based Pret A Manger entered Italy with a store at Milan Malpensa airport in May 2023 and plans to reach 40 outlets within the next few years. 

The Italian branded coffee shop market added net 10 stores over the last 12 months — the same number of new outlets as in 2021 and 2022. However, the market is forecast to increase by 100 net new stores over the next five years, reaching 1,269 outlets by 2028. 

While many domestic operators, including Caffè Pascucci and La Bottega del Caffè, closed stores last year, market leader McCafé opened 35 net new stores to reach 556 outlets and now holds a 57% share of the coffee-focused segment, further underlining the potential for value-focused brands in Italy.