Coffee industry market strategies in developing countries

Coffee, which, after natural gas, represents the most exported raw material out of the total world value of exports, could be considered the colonial good par excellence. Everyday millions of people spend 165 million dollars to buy it, while for over 25 million farmers, scattered between Central and South America, Africa, Asia and Oceania, coffee is the only source of income. Such a situation exposes farmers and their families to a considerable risk, not only because of the meteorological events and the voluptuous nature of coffee consumption but, above all, because of price trends on the international market. In the following paper, coffee margins fluctuations (the difference between the price charged by coffee's final processors in the retail market and the price of coffee exported from coffee-producing nations) will be analyzed in detail through a robust econometric model set up in the article “Coffee price dynamics: an analysis of the retail-international price margin” by Ghoshray, Atanu, Mohan, Sushil. Then the Italian competitive benchmarking and the demand for coffee will be examined, taking into account both the pre and post pandemic status quo. Furthermore, Lavazza Group, one of the main international players will be introduced with a deep focus on its several brands and businesses. Moreover, the attention will shift on Lavazza’s marketing strategies. Customers are continuously changing their products and services expectations; thus, firms are expected to adapt their strategies to retain their competitive advantage. Finally, the international benchmarking will be taken under discussion, indeed Lavazza is reinforcing its international presence through the opening of various coffee shops all around the world to increase its market share. In particular, the Group strengthened its worldwide presence in China through a 35% joint venture with Yum China, a local leader in the retailing industry. Yum China maintains the exclusive rights in China for the distribution of goods from international brands including KFC and Pizza Hut. With aspirations to establish 1,000 stores by 2025, the joint venture has already built more than 20 outlets in Shanghai, Hangzhou, Beijing, and Guangzhou. The Lavazza Group intends to attract Chinese customers by utilizing its 126 years of experience, vast coffee knowledge, and a worldwide brand, indeed China seems to be a market that is rapidly expanding and will increase at a pace of more than 10%, according to market analysis by Mordor Intelligence.