As tennis fans strolled around Arthur Ashe Stadium in New York City last week, many saw a new, crisp white, green and blue pop-up cafe plopped in the center of the stadium grounds. Lavazza, an Italian coffee company, was an official sponsor of the U.S. Open tennis tournament for the first time, hoping to attract a caffeine-addicted American public to its variety of coffee blends and make its brand known to the thousands of tennis fans watching the matches at the stadium and at home.
Lavazza commands a 45 percent market share in its home country, but now, after seeing increased demand in the U.S. for specialty coffees, it wants to conquer the New World. Lavazza is working to expand its market with a new product line and a $20 million advertising and sponsorship campaign aimed at doubling its U.S. sales of coffee products in the next three to four years. With Americans increasingly buying gourmet and specialty coffees, the move is likely a smart gamble, but Lavazza cannot rely on its taste profile alone to attract them. To compete with supermarket brands with a large following of loyal customers, such as Dunkin’ Donuts, Peet’s and Starbucks, and the coffee shops that continue to mushroom throughout the nation, Lavazza will have to present itself as something new and different, marketing experts said.
A Rocky Start
Lavazza, the world’s seventh-largest coffee roaster, saw profit rise 16 percent last year to $142.8 million. The company’s make-it-yourself products in the U.S. include a variety of drip coffee blends and Keurig K-Cup packs that can be found in hundreds of retailers, from Kroger to Safeway. Lavazza considers its competition to be supermarket brands, not specialty shops like Starbucks. Lavazza’s business in the U.S. grows about 15 to 20 percent every year, and the company has over $100 million in U.S. sales in 2015, according to Giuseppe Lavazza, vice chairman of the company. But it hasn’t always been that way. The company started distributing in the U.S. in the 1990s, and was met with an uninterested audience.