Nestle, JAB tried to buy premium coffee maker Lavazza
Lavazza, the Italian coffee producer and distributor, has received bids for its business from both Nestle and JAB Holding in recent years, according to a Reuters report. Both of the larger companies declined to comment, the news outlet said.
Giuseppe Lavazza, the company's vice president, told reporters the longtime family business has been the target of various suitors, but that it has rejected all offers. His comments were made at the opening of Lavazza's new headquarters in Turin, Italy.
Marco Lavazza, his cousin who also is a company vice-president, told Reuters: "Being courted is something that pleases us and we talk with everyone ... but we are clear in mind we want to be independent."
Lavazza was founded in 1895 in Turin and is known for its high-quality beans and ground coffee, as well as single-serve pods and K-Cups for Keurig machines. The company sells its product online and distributes it internationally, including in the U.S. through retail outlets such as Walmart and Target.
Nestle has recently taken steps to solidify its position in the premium coffee space, so it's not surprising that the Swiss food and beverage giant would be interested in a successful mid-tier company such as Lavazza with an established global network.
Already the world's largest coffee producer — with such well-known brands as Nescafe and Nespresso in its portfolio — Nestle has been delving deeper into the market through its acquisition last year of Chameleon Cold Brew and the purchase of a majority stake in Blue Bottle Coffee.
These moves were made to better position Nestle to compete with coffee giants Starbucks and JAB, which owns Keurig Green Mountain, Peet's Coffee and Stumptown Coffee Roasters, as well as with J.M. Smucker's Folgers and Kraft Heinz's Maxwell House.
“Nestle’s strategy for coffee ... is to have a variety of offerings in terms of format, taste and price points,” Paul Grimwood, chairman and CEO of Nestle USA, said in a release in November.
As for JAB, its Keurig Green Mountain is busy merging with Dr Pepper Snapple, which will give the Luxembourg-based investment firm a big piece of the U.S. beverage market through its 7UP, Canada Dry, Bai Brands and, of course, Dr Pepper and Snapple products.
U.S. coffee consumption has been increasing as younger drinkers seek out more cold-brew, ready-to-drink and gourmet products. About 64% of American adults drink a cup of coffee each day, the highest level since 2012, according to a survey from the National Coffee Association cited by Reuters. In addition, 48% of millennials said they had consumed a gourmet cup of coffee the previous day.
Any successful company with high-end products is likely to present an appealing target to larger companies looking for synergies and ways to innovate, differentiate and expand in the marketplace. Family-owned or other successful firms — Lavazza's revenue was about $2.5 billion last year — that have been around for a long time and offer a premium and well-respected product are likely to continue attracting interest from potential buyers even if they keep saying "no."