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Italy: trends run to exports decaf and concentration.

Italy: Trends Run to Exports Decaf and Concentration

The past year has given yet further evidence of how quickly the Italian roasting industry has been evolving toward a new order, more in keeping with the profile of the international industry and the challenges of the European Community. Principally this relates to the concentration of smaller units and brands into larger companies and groups.

This has brought a reduction in the total number of independent Italian roasters, which throughout the 1980s shrank in numbers and are now counted at less than 1,000. Particular pressure has been placed on the medium-sized regional roasters, once powerful, now beleagued, to become absorbed into larger companies This emphasis on concentration is continuing.

About 69% of the total coffee market is controlled by only five companies, all of which - with the exception of Procter & Gamble, which has been on the companies. Multinational penetration of the market is now deemed very difficult, particularly following the in-home marketing consolidation by Lavazza last year (share is up to 50% of in-home market).

Annual total market growth continues at a consistent but marginal level, not more than 25% per annum. The growth sector is in southern Italy and, for the entire market, in decaffeinated brands, which have been growing by 20% yearly since the mid 80s - up from a 3% share of the in-home market in 1985 to 6% in 1989.

Out-of-home consumption continues to represent 25% of total market. For the out-of-home market, Segafredo Zaneti and IllyCaffe are the companies to watch. The "in" brands for home market are still Lavazza, joined by Cafes do Brasil's Kombo brand.

Exports of Italian roasted coffee proceed to burgeon, officially reaching the 13,000 ton level in the past 12 months. This capped a decade of impressive growth. Exports are now figured into green coffee market analysis, a new wrinkle in Italy. For example, of the 4.5 million bags imported into Italy during 1989, more than 200,000 are targeted as "export" oriented, taken to serve this growing factor in the roasted coffee industry. As well, the green coffee segment reacts to the export boom with a slight upward shift in Arabica purchases.

The 4.5 million bags of green imports in 1989 register a 4.3% increase over the 1988 level. The "Brazil and other Arabicas" category remains solid at 29% of green imports. "Other Milds" increased to 16.1%, from the 15% share held in 1988. Colombia was down slightly to 6.84%. Total Robusta share came to 47.84%, up in volume but slightly down in share percentage.

Trieste Coffee Boom,

Anniversary and Bulk

Throughout the past decade Trieste has been institutionalizing its dominance as the nation's leading coffee port and warehousing center. The city now receives more than 50% of the green coffee imported into Italy, plus increasing volumes of transit coffee. Adding to this is the coffee of the permanent IBC stock site in the free port area. In sum, Trieste is the busiest coffee port in the Mediterranean, and one of the most active in Europe.

As important as coffee already is in Trieste, the potential for growth now seems exciting. This is due to several possibilities: in the post Soviet-empire era the city could likely return to its role as gateway port for Central and Southeastern Europe, when nations soon may have liberalized coffee markets; there are still plans for Trieste to initiate a telecommunications bourse; talk remains of giving Trieste terminal status with London/Paris-LeHavre.

To put a bow on all this, next year the coffee community here will be celebrating its 100th anniversary as an association. The centenary year will feature a two day celebration, April 26-27, that is already being planned as an event to attract a congregation of international coffee people.

Perhaps the most striking visible sign of the new coffee boom in Trieste, however, is Silocaf, the towering new bulk coffee silo and processing complex in the free port zone. Silocaf is part of the Pacorini Group, and in fact is a dream come true for Roberto Pacorini who has been studying coffee bulk handling concepts and preparing for Silocaf since the mid 70s.

The initial Silacof complex became operational in 1986 and proved such a success that expansion was almost immediately necessary. The additions, including new bulk receiving pits, were completed last year. The success of Silocaf has led the Pacorini company to proceed with Silocaf do Brasil, a sister bulk complex in Brazil that is now nearing completion.

Silocaf has impacted not only on Trieste, but strongly on the entire Italian industry. Four years ago the nation was virgin ground to bulk, as are most nations. Now, Italy is perhaps the most sophisticated nation when it comes to integrating bulk handling concepts into daily operations, thanks largely to the Pacroni `Big Bag' service.

Sangati

Another beneficiary of Silocaf success is Sangati Engineering, the company that put together the project's nuts and bolts. Yet it would seem by chance that Singati should today be preparing for an increasingly important part in the international coffee industry. Certainly 20 years ago such a role would have seemed unlikely.

Twenty years ago, Sangati was busy earning a worldwide reputation as a leader in the construction of silos and milling machinery, particularly for the grain industry. That was before Silocaf.

For the Trieste plant, Sangati was asked to chart the universe of contemporary coffee handling science, to design and fabricate bag and bulk receiving stations, blending lines, bagging stations for "big bags" and standard bags, screening and electronic sorting lines, dust extractors, continuous automatic sampling machines, computer controlled multi-system electronic scales, brushing/washing/drying processes, and of course the complex's 147 cells. All of this is uniquely adapted to coffee characteristics and to the high care level demanded by the industry.

Sangati cut its teeth in coffee on the original Silocaf project, constructed in 1985, and then gained important additional experience with the expansions success has demanded. The company has also been involved with the silo project in Brazil, an experience which has been particularly valuable as it has meant learning the viewpoints of producer and shipper.

These projects have necessarily been the most important for Sangati, as worldwide only Kaffee-Lagerie in Hamburg is on the same scale. But the company has found growing demand for smaller plants and machines among numerous roasters and warehousers. In sum, Sangati has acquired a solid technical reference that is uniquely coffee oriented.

Recently, Sangati has been acquired by Berga SpA, a company specializing in fabricating agro-industrial milling, storage and processing plants. Berga president Lodovico Bernardi is also now president of Sangati. Berga headquarters are in Treviso, while Sangati offices and its sprawling factory remain based in Padua.

PHOTO : Ramadez Gobbo has been responsible for developing Sangati's coffee sector projects. He began preparing for Silocaf in the 1970s. Beside him, here in the enormous Sangati factory in Padua, a coffee de-stoning head receiving section.

PHOTO : Roberti Gambini of the coffee department at Pacorini in Trieste has just cause for smiles - this is the new big baby at Silocaf, the bulk receiving pit completed last year.
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Title Annotation:coffee roasting industry expansion in Trieste
Author:Bell, Jonathan
Publication:Tea & Coffee Trade Journal
Date:Mar 1, 1990
Words:1190
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