Market Report

Lavazza Australia MD Silvio Zaccareo on the goals and challenges of 2021

While 2020 proved no crystal ball is accurate, GCR invited industry leaders to share their hopes, ambitions, and predictions for 2021, in what is likely to be a defining year for the international coffee market.

This year has brought on challenges for businesses and industries across the world. For the coffee industry specifically, we have had to overcome many hurdles – from impacts to supply chains to logistical challenges to supporting our partners through testing times and changing landscapes.

As we look forward, there are clear trends that have emerged from 2020, and others that have always been there but become even more relevant.

Creating premium coffee experiences at home
We’ve seen a big trend this year in creating a premium coffee experience at home – a trend which appears to be here to stay. In Australia, sales of manual espresso and fully automatic coffee machines grew by 34 and 60 per cent respectively this year, and the whole bean segment in grocery increased by 27.1 per cent.

At Lavazza, this trend has been a focus for us with the launch of a new whole bean collection across Australia, Lavazza Espresso Barista. Espresso Barista is our most premium collection to date and came in the midst of Australia’s nationwide lockdown. We are grateful for such a strong consumer response to this product which has resulted in Espresso Barista being one of the most successful coffee innovations of 2020.

Last month, we were also very proud to take out the Canstar award for Best Coffee Beans and Ground Coffee, which was voted by consumers across Australia in 2020 and recognises the premium quality of our coffee.

In the capsule segment we saw sales of capsule machines grow by 22 per cent, with much of that driven at the premium end of the market. In our capsule system, A Modo Mio, we partnered with iconic Italian brand Smeg to bring to market the Lavazza A Modo Mio Smeg Capsule machine this year, which celebrates design and technology further premiumising the at-home coffee experience.

We anticipate Australians will continue to embrace the at-home experience and build new coffee rituals into 2021. We have more exciting innovation to come from Lavazza – watch this space.

The rise of eCommerce
This year we saw huge spikes in online sales across Australia, with last month recorded as the country’s highest ever online shopping month.

Like many businesses no doubt, this is a core pillar in the Lavazza strategy. We have continued to upskill and invest in this space, embracing consumers’ diversifying shopper habits. This work saw the launch of our new website and eCommerce store in May, but we’ve also ensured our products are available through other online marketplaces, so consumers can access our quality coffee no matter where or how they prefer to shop.

The away-from-home sector continues to lead and evolve the coffee experience
This year was a tough year for many of our friends in the hospitality sector, with lockdowns, restrictions and mobility affecting their ability to operate as usual.

In Australia, we have one of the most sophisticated café, dining, and broader hospitality sectors. However, the rise of premium at-home coffee moments has challenged us all to continue to find new and exciting ways to lead the industry and we expect in 2021 the sector will continue to do so.

Outside of traditional methods, we see opportunities to offer consumers a wider range of machines and coffee solutions – whether it be new preparations in hot and cold, coffee’s amazing connection to food, touchless premium coffee-to-go, or vending. This is a trend Lavazza has seen globally and we have made major investments to ensure we have one of the widest ranges of coffee solutions to meet the ever-changing needs of consumers.

A final consideration for the AFH market’s future is the change to Australia’s office spaces. Those in high-rise office buildings are undoubtedly thinking about how the pandemic has influenced the future way of working. This has short- and long-term implications to the coffee industry and the solutions we provide. Lavazza is fortunate to have a wide range of solutions, and we see lots of opportunity here in 2021 and beyond.

Our joint responsibility to protect our natural resources
This year has forced us to slow down in all aspects of life and put more focus on what is important. While sustainability has been top-of-mind for quite a while now, the challenges of 2020 have driven our increased awareness about how we treat our natural resources and the planet. We are all more focused on the products we are buying, what’s in them and the supply chains they come from.

Sustainability has been a part of Lavazza’s brand history and a priority for The Lavazza Foundation for many years.  In 2021 we believe consumers will continue to take a step back and focus more on the origin of their coffee – including the farmers and people that support the full product lifecycle and process. For Lavazza, sustainability and protection of coffee origins is a key initiative and a priority globally.

All of these trends point towards the Australian coffee consumer becoming more passionate, more educated, and expecting more from their coffee. This is a fantastic opportunity for the industry to look at product supply chain, premium innovation, and the experience their brands and products offer consumers. As Lavazza looks towards 2021, we are highly optimistic, and our goals remain ambitious. We have a lot of news and product innovation on the horizon.

As an industry, we need to challenge ourselves to retain the best talent by being people first and meeting the evolving areas of importance of our workforce.

This has become a core tenet of the Lavazza business and we’re proud to be endorsed by platforms such as WORK180 as an employer of choice for women and recognised by Good Company as one of Australia’s Top 40 Best Workplaces to Give Back in 2020.

On a personal level, I’m proud of our work globally, but as importantly on a local level I feel incredibly privileged and proud of our team. We look forward to coming together again in January and making 2021 our biggest and best year yet.

Written by Silvio Zaccareo, Lavazza APAC Business Unit Director and Australia Managing Director

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