Paris, Oct 18 - Italian roaster Lavazza is betting on a new capsule-based coffee machine intended for private consumers to help it counter a drop in traditional coffee demand in Europe, a senior official and family member said on Thursday.
The Turin-based company hopes to see its turnover break the 1 billion euro ($1.43 billion) barrier this year after its consolidated revenues rose to 930 million euros in 2006 from 867 million euros in 2005.
It is relying on expansion outside Europe and also on a rise in its European market share, notably through the launch of its "A Modo Mio" coffee machine set to rival Nestle Nespresso SA, the premium coffee-capsule business of Swiss food giant Nestle SA.
"There is a drop in the traditional coffee market almost everywhere -- in France as in Germany or Britain -- but capsules systems are growing fast," Giuseppe Lavazza, strategic director of the company, told Reuters after a marketing event in Paris.
He said the machine would be launched in Italy later this month and in other big European markets next year and that the company wanted to sell 250,000 of the new machines and 100 million capsules by the end of 2008 in Italy.
PACIFIC COLONISATION
Despite a surge in coffee prices, Lavazza does not intend to rise its sale prices on European markets in the near future.
"We lifted them by 4 percent in February in Italy where we are the leader. In the rest of Europe we are not, so we have to wait for local leaders to set the tone," he said.
Prices of arabica coffee -- the main coffee used by Lavazza -- were at their highest level for almost eight years this month, boosted by worries over the crop level in drought-hit Brazil, the world's top Arabica producer.
Lavazza is the world's seventh largest roaster by purchases of green coffee and sells roasted coffee in 80 countries. It is not listed and does not envisage a listing at this stage, he said.
Lavazza said the company was still betting on expansion in Latin America and Asia.
But he said that even though China looked like a promising market, the company had not yet managed to penetrate it fully.
"We didn't find a local partner yet and you have to find one in China," Lavazza said, saying the company had a coffee shop in Taiwan. Competitor Nespresso said in July it entered the Chinese market and opened its first two stores in Beijing and the southwestern city of Chengdu China.
In March, Lavazza agreed to buy India's second-biggest coffee shop chain, Barista Coffee Company, and Indian coffee vending company Fresh & Honest Cafe in a 100 million euro deal, betting on the rapid growth of the Indian coffee market.
"It is a pacific colonisation," Lavazza said to describe the company's expansion in a mainly a tea-drinking country.