By Catie Low
After investing more than three decades into building Lavazza into a household name, the Valmorbida family has struck a deal to relinquish control of the Italian coffee brand to its founding family.
The agreement is shrouded in secrecy but it closes a chapter on a journey that dates back to the late 1970s, when patriarch Carlo Valmorbida imported Lavazza coffee to Australia for the first time.
Nigel Meakins, the general manager of Lavazza Australia, is now calling the shots for the brand here.Credit: Joe Armao
At a time when Australia's coffee culture revolved around a jar of Nescafe, the Valmorbidas played a significant part in transforming us into a nation of coffee connoisseurs.
Australia is now one of Lavazza's most significant markets, and as part of the stable of brands in the Valmorbida's Valcorp Fine Foods, sales were expected to exceed $100 million by 2016.
Lavazza's global revenue topped €1.34 billion ($2.88 billion) in 2014 and the operation, which is owned and run by the fourth generation of the Lavazza family, claims more than 45 per cent of the retail coffee market in Italy.
As part of the agreement, Valcorp will continue to provide logistics and warehousing support for Lavazza. But it's also picked up the Locale coffee business, which it plans to rapidly expand in Australia and offshore.
Locale was developed in tandem with Lavazza as the first coffee roasted outside Italy for the coffee giant.
Kieran Callan, the group chief executive of Joval, the holding company for Valcorp and wine operation Casama, said Lavazza had grown to a scale that justified direct investment by the Lavazza family and consequently its acquisition of the "distribution rights" from Valcorp.
Mr Callan said the Valmorbida family had built Lavazza's Australian business into the fourth largest market in the world for the Italian coffee roaster.
Mr Callan would not comment on the specifics of the deal or its value except to say the business was very happy with the way "the negotiations were handled and the outcome".
"We remain active in the coffee market because as part of the deal we've acquired locally roasted coffee Locale," Mr Callan said.
"It addresses where we believe coffee is going and that's specialised, local roasters."
There are plans to expand Locale's network of 70 top end cafes and restaurants in Australia while pushing into overseas markets, including Singapore, China and Taiwan in 2016.
"If you look at China as an example Starbucks is already there and they are charging nearly $7 for a cup of coffee," Mr Callan said.
Locale is not a grocery retail brand, it's key market is the hospitality market, which dovetails with the Valcorp's stable of food brands as well as the Casama wine businesses.
"People don't realise we already sell 1 million cases a year of fine wine," Mr Callan said.
It's not clear what ultimately triggered the Lavazza family's decision to bring the coffee brand back into the fold and set up a wholly owned subsidiary, Lavazza Australia, to drive sales growth.
Nigel Meakins heads up the new team, which includes more than 20 Valcorp staff.
He said the first priority was to ensure Lavazza brought product to market that was "relevant to the Australian consumer".
"We are a coffee-loving nation and we will be building a portfolio to match that," Mr Meakins said.
Lavazza is targeting the hospitality sector, at home coffee drinkers and the office market with its Blue Pod Coffee Co.