La Marzocco: The wave of acquisitions in the specialty coffee industry shows no signs of slowing. Just one day after Chobani’s high-profile US $900 million purchase of La Colombe on December 21, 2023, Italian company De’Longhi SpA announced a US $374 million deal to acquire a 41.2% stake in the renowned espresso machine brand La Marzocco.
De’Longhi SpA will acquire shares from its parent company, De’Longhi Industrial, along with other minority stakeholders. By combining La Marzocco and Eversys (which De’Longhi fully acquired in May 2021), De’Longhi aims to establish itself as a dominant player in the global coffee equipment market.
Although La Marzocco will continue to operate independently, De’Longhi SpA will hold over 61% control of the combined entity. It is clear that De’Longhi intends to maximize the value of La Marzocco’s strong branding.
As acquisitions in specialty coffee become increasingly frequent, it raises the question: Are takeovers the ultimate goal for successful coffee brands, and how do they impact the broader coffee industry?
To explore this further, I spoke with Benjamin Hohlmann, founder of Kaffeemacher.
A Look into the Acquisition: The Legacy of De’Longhi and La Marzocco
De’Longhi and La Marzocco, both renowned Italian brands, have a deeper connection than just their shared success. In April 2021, De’Longhi Industrial increased its stake in La Marzocco International by purchasing an additional 33.34%, raising its total ownership to 62.6%.
This move stirred some criticism within the coffee industry. In response, La Marzocco’s CEO, Guido Bernardinelli, clarified that only De’Longhi Industrial held shares in the company, while De’Longhi SpA, the group’s division responsible for home kitchen and coffee appliances, did not—likely an effort to maintain La Marzocco’s premium identity.
However, this balance is set to shift again. By the first quarter of 2024, De’Longhi SpA will acquire over 61% of the shares, reducing De’Longhi Industrial’s stake to 26.6%. Meanwhile, the shares of La Marzocco International’s minority stakeholders will decline from 37.4% to 12%.
La Marzocco: A Revered Brand with a Cult Following
While De’Longhi is a dominant player in the entry-level domestic coffee appliance market, it doesn’t garner the same level of prestige as La Marzocco, particularly within the specialty coffee community.
Established in 1927 by the Bambi brothers, La Marzocco was among the pioneers to patent both the horizontal and dual boiler espresso machines during the mid-20th century. Over the years, the company has introduced some of the most iconic machines in the coffee industry, including
Benjamin Hohlmann is the founder of Kaffeemacher, a Swiss company, and holds titles such as Q-grader, German Cup Tasters Champion, and Swiss Brewers Cup Champion. Additionally, he manages a coffee-focused YouTube channel.
La Marzocco is considered a cult favorite,” he explains, “It holds a prestigious reputation within the specialty coffee scene, with its machines commonly featured in many cafes.”
The company’s prominence as a top espresso machine maker was further solidified by its role as a sponsor for the World Barista Championship between 2000 and 2008, which contributed to the establishment of the renowned competition.
“Baristas around the globe resonate with La Marzocco’s brand identity, which sets it apart from De’Longhi,” Benjamin adds. “De’Longhi is recognized for offering budget-friendly, beginner-level coffee equipment, which has shaped its brand image
Could This Hinder Innovation in Coffee Equipment or Propel It Forward?.
Given the history between the two companies, the acquisition was certainly expected. However, there are additional clear reasons for this move, particularly the expertise that De’Longhi, La Marzocco, and Eversys collectively offer.
La Marzocco: De’Longhi may stand to gain the most from this deal. The company reported a 2% decrease in its full-year revenue for 2022, attributing this decline to a challenging geopolitical situation in Europe and unfavorable inflation trends impacting consumers’ disposable income.
Despite this, De’Longhi’s coffee equipment sales remained robust during the same year, largely fueled by its acquisition of Eversys in 2021 and a marketing campaign featuring brand ambassador Brad Pitt. Thus, harnessing La Marzocco’s extensive knowledge and established brand reputation will likely enhance their performance further.
“For B2B clients, a salesperson can now present a premium espresso machine alongside a high-quality super-automatic coffee machine, based on what best suits the client’s needs,” Benjamin explains.
Conversely, La Marzocco also stands to benefit from this merger.
“The partnership between Eversys and De’Longhi is significant and presents opportunities for advancing La Marzocco’s product offerings,” Benjamin shares. “Eversys has developed some of the top super-automatic coffee machines on the market.”
“So, will we see more automation in La Marzocco’s espresso machines in the future? It’s quite possible,” he adds.
While it’s evident that the three companies plan to leverage each other’s expertise and brand strength, the implications of the acquisition for the broader coffee equipment market remain to be seen.
Interestingly, La Marzocco and Marco Beverage Systems recently relinquished their intellectual property rights to integrated scale technology, allowing other companies to utilize this for their product development. This could potentially sustain the drive for innovation—if De’Longhi allows it, of course.
Another Indicator That Acquisitions Are Unavoidable?
Each year, the number of acquisitions in the coffee industry continues to rise, and this trend is likely to persist. Regardless of whether one believes these acquisitions are beneficial for specialty coffee businesses, they play a significant role in shaping the industry’s future growth and evolution.
This situation prompts concerns about how smaller regional companies can stay profitable and whether successful brands must be acquired to secure their market position.
When larger firms acquire smaller ones, it raises the question of whether the values and objectives will remain intact after the smaller entity is integrated,” Benjamin notes. “I would like to see more smaller businesses exploring innovative solutions.”
“Baristas feel a connection to the La Marzocco brand,” he continues. “Given this, there should have been clear communication regarding ownership and shares two years ago, as this might result in fewer people identifying with the core brand down the line.
De’Longhi’s acquisition of La Marzocco marks a significant turning point for the coffee equipment industry and is likely to disrupt the sector for years to come. With Eversys also included in this new subsidiary, the three companies have the potential to become a formidable presence.
However, the implications for the broader coffee industry are still uncertain. Ideally, we hope to see ongoing innovation in coffee equipment.