While the first half of 2021 saw much of the global coffee industry reeling from new lockdowns and a fresh wave of the pandemic, significant M&A activity and international expansion highlighted the resilience of coffee businesses around the world.
With a new wave of Covid-19 sweeping the world and the reimposition of trading restrictions in many markets, the beginning of 2022 feels eerily familiar to last year. Yet, there have been many positive developments over the last 12 months. The global vaccination roll-out has gained significant momentum, enabling operators to resume trading in some form, and in many cases fully reopen to customers.
Many coffee businesses have also spent the last year diversifying through digital integration and new propositions, including coffee subscriptions and new retail partnerships. Meanwhile, 2021 also saw a significant number of brands expand into new markets, particularly the US. Presented in chronological order, here are ten of 2021’s most significant news stories as reported by World Coffee Portal.
Covid-19 winds back seven years’ sales growth for UK branded coffee shops
At the beginning of 2021, World Coffee Portal’s Project Café UK 2021 report laid bare the impact of Covid-19 on Europe’s largest branded coffee shop market. It showed the £3bn ($4bn) segment suffered a near 40% sales decline over the previous 12 months, with nearly £2bn wiped off the market value. It also showed operators were adapting to new trading realities with delivery, app-based ordering and drive-thru.
Covid-19 wipes out nearly a quarter of US coffee shop market value
Yet more gloom in early 2021 as World Coffee Portal’s Project Café USA 2021 report revealed Covid-19 had wiped nearly a quarter of the value from the US branded coffee shop market. Despite turbulent trading, the report identified the US remained a source of innovation for the global coffee industry, with operators rapidly adapting to Covid-19 trading pressures with drive-thru, digital integration and new trading formats.
De’Longhi reaches agreement to fully acquire Eversys
Italy-based De’Longhi, which has held a 40% minority stake in Eversys since 2017, announced it would acquire the remaining 60% stake in the Swiss super-automatic coffee machine maker for CHF 110m ($118m), bringing the total ‘enterprise value’ of the acquisition to CHF 150m ($161m). De’Longhi would later report record revenues amid soaring global demand for at-home coffee equipment driven by the pandemic.
EG Group acquires UK food-to-go and coffee chain Leon in £100m deal
EG Group, which is controlled by entrepreneur siblings Mohsin and Zuber Issa, reportedly paid £80m-100m ($111m-139m) to take control of Leon’s 42 company-owned and 29 franchise sites. EG Group would later acquire UK bakery and coffee chain, Cooplands, while continuing the roll-out of its franchised Cinnabon stores in the UK.
JAB Holdings creates ‘unrivalled fast casual platform’ Panera Brands
Luxembourg-based JAB Holdings further tightened its grip on the US coffee and food-to-market through the creation of a new business unit, Panera Brands. Bringing together the Panera Bread, Caribou Coffee and Einstein Bros. Bagels brands, the new group comprises nearly 4,000 stores and employs around 110,000 staff across 11 countries. Panera Brands later confirmed it would file for an IPO after attaining new investment for global expansion.
Blank Street secures $25m funding to accelerate micro-retail concept
A small business receives a mighty investment – US startup Blank Street secured $25m series A funding to grow its mobile cart and small-format coffee shop concept in New York from 15 to 100 locations. Highlighting the growing appeal of mobile coffee concepts in the US, in October 2021 Ukrainian coffee capsule maker Boseco announced plans to introduce its mobile e-bike coffee shop concept in San Francisco, with mobile cold brew concept Brewbike later securing $3m investment in December.
Grind raises $30m to fuel at-home coffee business and US expansion
The London-based coffee shop, bar and restaurant raised £22m ($30m) investment to grow its direct-to-consumer coffee business and fund expansion in the US. In early 2021 Grind opened a new 15,000sq ft roastery to keep pace with growing demand. The company forecast 2021 sales exceeding £20m, with 30 million coffee pods expected to be shipped to around 100,000 customers.
Melitta Group takes 70% stake in Italian coffee roaster Corsino Corsini
Germany’s Melitta Group, which posted annual sales exceeding €1.7bn ($1.9bn) in 2020 acquired a 70% stake in premium Italian coffee roaster, Corsino Corsini. The companies have said they will work together to grow their share of the retail, foodservice and vending markets while developing new products and strategies.
South Korea’s A Twosome Place acquired by The Carlyle Group
US private equity firm, The Carlyle Group, snapped up South Korea’s third largest coffee chain from Hong Kong-based Anchor Equity Partners for an undisclosed sum. A Twosome Place, which operates more than 1,400 coffee shops in South Korea, previously changed hands for 450bn won ($422m) when Hong Kong-based Anchor Equity Partners acquired it from CJ Foodville Co in 2018.
Westrock Coffee significantly expands production plants in the US and Malaysia
Westrock Coffee announced a significant expansion of its production capacity in late 2021, upgrading its roasting, ready-to-drink (RTD) and tea production capacity to meet increased demand in the US and globally. Its new facilities include an expanded 524,000sq ft tea, coffee and RTD plant, the largest of its kind in the US, and a new 90,000sq ft packing and distribution plant in Malaysia.