Robust US sales boost illycaffè’s half-year results

illycaffè reported 16% sales growth in the US, its second largest market | Photo credit: illycaffè

illycaffè has reported a steady rise in sales for the first half of 2023, driven by a strong performance in its key US growth market. 
 

The Italian coffee roaster reported 5% group revenue growth in the six months ended 30 June 2023, with sales in all major markets increasing year-on-year. Group profitability increased 21% compared to the same period in 2022. 

Sales growth was highest in the US, illycaffè’s second largest market, at 16%. The Trieste-based coffee roaster cited its horeca channel as a key performer in the region, with new customer acquisitions and increased out-of-home coffee consumption leading to a 27% rise in sales for the segment.   

Additionally, illycaffè's US e-commerce channel achieved 20% sales growth, primarily driven by distribution on global marketplace Amazon. 

The coffee roaster has cited the US as a key growth market as it seeks to develop its international presence.  

In February 2021, illycaffè sold a 20% stake of its business, worth a reported €200m ($237m), to US investment firm Rhône Capital to accelerate its international expansion, particularly in the US. 

While most of illycaffé’s US growth is expected to be organic, the coffee roaster has not ruled out acquisitions and new partnerships to increase brand awareness and grow its distribution channels. 

In January 2023, illycaffé partnered with Florida-based specialty coffee machine operator Reliant Coffee to introduce its coffee at select retail and premium hospitality locations across the US, including luxury car dealerships, residential buildings, high-end offices and hotels.  

“We are satisfied with the results for the first half of 2023. The growth in all the main markets, particularly in the US and in the key countries of the Eurozone, demonstrates the effectiveness of the strategies outlined in the business plan. At channel level, there was a strong boost in out-of-home (+16%), confirming our leadership position in the super-premium segment,” said Cristina Scocchia, CEO of illycaffè. 

Scocchia also confirmed a new three-year distribution agreement with Hangzhou Onechance Tech to strengthen its packaged retail coffee sales in China’s consumer market. 

“We have decided to accelerate in China, and I am happy to announce that we have just finalised an exclusive distribution agreement for three years with Hangzhou Onechance Tech Group (Chancemate), listed on the Shenzhen Stock Exchange with a market capitalisation of over €800m ($886m). Thanks to this partnership, we will strengthen our presence in at-home channels, particularly online, with the aim of tripling our business over the plan period,” she added. 

Founded in 1933, illycaffè’s coffee is distributed to supermarkets and served across horeca channels in 140 countries. The business also operates more than 175 cafés globally. 

illycaffè reported its strongest annual sales growth in ten years in 2022, with revenues rising 14% year-on-year to reach €568m ($619m).