The trend of acquisitions in specialty coffee continues. The day following Chobani’s recent US $900 million acquisition of La Colombe on 21 December 2023, Italian company De’Longhi SpA agreed to spend US $374 million to purchase a 41.2% stake in the iconic espresso equipment brand La Marzocco.

De’Longhi SpA will acquire the stake from parent company De’Longhi Industrial, as well as from other minority shareholders. Together with La Marzocco and Eversys (which De’Longhi fully acquired in May 2021), the Italian small appliance manufacturer will create a powerhouse global coffee equipment hub.

Although La Marzocco will continue to operate independently, De’Longhi SpA will control over 61% of the new business. And there is no doubt the company is gearing up to capitalise on the renowned espresso equipment manufacturer’s branding as much as possible.

So with acquisitions becoming more and more common in the industry, are they the end goal for successful specialty coffee brands? And if so, is this truly beneficial to the wider sector?

I spoke to Benjamin Hohlmann, founder of Kaffeemacher, to find out more.

You may also like our article on why Chobani’s acquisition of La Colombe shows roasters can’t be complacent about RTD coffee.

Behind the acquisition: The history of De’Longhi and La Marzocco

Both De’Longhi and La Marzocco are hugely successful Italian brands, but their relationship extends beyond this. In April 2021, De’Longhi Industrial purchased an additional 33.34% stake in La Marzocco International – increasing its shares to 62.6%.

The move received some criticism from the coffee industry. Shortly after, La Marzocco CEO Guido Bernardinelli publicly stated that only De’Longhi Industrial had shares in the company. Additionally, he specifically mentioned that De’Longhi SpA (the division of the group which manufactures and sells home kitchen and coffee appliances) did not – in a possible attempt to retain La Marzocco’s premium brand identity.

However, De’Longhi Industrial’s stake in the espresso machine company will now reduce to 26.6% as De’Longhi SpA will acquire more than 61% of shares in the first quarter of 2024. La Marzocco International minority stakeholders’ shares will also drop from 37.4% to 12%.

So this means the NewCo will include:

• Small domestic appliance manufacturer De’Longhi SpA, which specialises in coffee and food preparation equipment
• Premium home and commercial espresso machine and grinder brand La Marzocco 
• Swiss superautomatic coffee machine company Eversys – which De’Longhi SpA fully owns
  • All three companies will continue to operate independently

La Marzocco: a “cult” brand

Although De’Longhi is one of the leading entry-level domestic coffee appliance manufacturers, it doesn’t command quite as much respect as La Marzocco – especially in specialty coffee.

Founded in 1927 by the Bambi brothers, the company was one of the first to patent both a horizontal and a dual espresso machine boiler in the mid-1900s. And over the past few decades, La Marzocco has developed some of the most well-known machines in the industry, including:

• The semi-automatic dual-boiler GS in 1970
• The redesigned GS2 in 1982, which was used in Starbucks stores for many years
• In 1990, the company launched the Linea Classic – which became one of its most recognisable machines
• The Linea PB in 2013, which allowed the user to control extraction time and yields
• The Strada AV – the “barista’s espresso machine”
• In 2015, La Marzocco developed the Linea Mini – a dual-boiler home machine with thermal stability technology

Benjamin Hohlmann is the founder of Swiss company Kaffeemacher. He is also a Q-grader, a German Cup Tasters Champion, a Swiss Brewers Cup Champion, and runs a coffee YouTube channel.

“La Marzocco is a cult brand,” he says. “It’s highly regarded in the specialty coffee community and its machines are found in many coffee shops.”

The company’s position as one of the leading espresso machine manufacturers also stemmed from its sponsorship of the World Barista Championship from 2000 to 2008 – helping to establish the pioneering competition.

“La Marzocco is where it is today because baristas worldwide identify with its brand, in stark contrast to De’Longhi,” Benjamin adds. “De’Longhi is known for price-accessible, ‘transition’ coffee equipment which it has built its brand on.”

Could this stifle coffee equipment innovation – or drive it even further?

Considering the history between the two companies, the acquisition was certainly foreseeable. But there are other obvious reasons – including the expertise that De’Longhi and La Marzocco (and Eversys) bring to the table.

Arguably, De’Longhi will benefit the most. The company experienced a 2% decline in full-year 2022 revenue, citing a “tough geopolitical” environment in Europe and “unfavourable inflation dynamics” affecting consumers’ disposable income. 

Its coffee equipment sales that same year, however, were strong – no doubt driven by the brand’s acquisition of Eversys in 2021 and an ad campaign featuring brand ambassador Brad Pitt. So leveraging La Marzocco’s wealth of knowledge and strong brand identity is sure to add to this.

“For B2B customers, a company salesperson can now offer a premium espresso machine and a high-quality super-automatic coffee machine – depending on which product is right for them,” Benjamin says.

La Marzocco, on the other hand, also stands to gain from the business move.

“The merger between Eversys and De’Longhi is huge, and also offers potential for the further development of La Marzocco’s products,” Benjamin tells me. “Eversys has succeeded in developing some of the best super-automatic coffee machines on the market.

“So, are we going to see increasing automation with La Marzocco espresso machines in the future? It’s not unlikely,” he adds.

However, while the three companies are clearly going to leverage one another’s knowledge and brand power, what does the acquisition mean for the wider coffee equipment market?

Well, considering that La Marzocco and Marco Beverage Systems recently surrendered intellectual property rights to their integrated scale technology, other companies can utilise this to develop their own products. So the push for innovation could certainly continue – if De’Longhi permits, of course.

Another sign that acquisitions are inevitable?

Every year, the number of acquisitions in the coffee industry continues to grow – and is only going to continue. Whether you think they truly benefit specialty coffee businesses or not, acquisitions are a huge part of how the industry will evolve and scale into the future.

This then raises questions, however, about how smaller regional businesses can remain profitable, and whether successful brands “need” to be acquired to maintain their place in the market.

“When larger companies acquire smaller ones, there is always the question of whether values and goals will remain the same after the smaller company is absorbed,” Benjamin explains. “I would like to see more smaller companies look towards new solutions.

“Baristas identify with the La Marzocco brand,” he adds. “With this in mind, there should have been transparent communication about ownership and shares two years ago. This could lead fewer people to resonate with the core brand in the future.”

De’Longhi’s acquisition of La Marzocco is a huge milestone for the coffee equipment market, and is sure to shake up the sector for the ensuing years. And with Eversys also a part of the new subsidiary, the three companies could become a force to be reckoned with.

What this means for the wider coffee sector, however, remains to be seen. In an ideal world, innovation in coffee equipment will continue to thrive.

Enjoyed this? Then read our article on why acquisitions are becoming more common in the coffee industry.

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