The Italian coffee roaster achieved strong sales growth in its target US and Chinese markets during the first nine months of 2022, but increasing costs have squeezed company profits
Cristina Scocchia took over the role of illycaffè CEO on 1 January 2022 | Photo credit: illycaffè
Italian coffee roaster illycaffé has credited the recovery of out-of-home coffee consumption for driving its revenues in the first nine months of 2022 but warned that raw material and logistics costs continue to rise.
The company said total revenues rose 15%, led by a 39% increase in café and restaurant trade. Additionally, retail channel sales grew 5% compared to the same period in 2021, while revenues in the online channel rose 8%.
The Milan-based coffee roaster also cited growth in its key US market, where revenues grew 32% following positive performances across all distribution channels and the favourable impact of the dollar.
Revenues in China, illycaffé’s second growth market after the US, increased 22%.
Despite strong revenue growth, illycaffé warned that strong pressures remain on its profit margins amid the increasing cost of raw materials and logistics, which grew by nearly 20% compared to last year.
In October 2022, illycaffé announced a €500,000 ($488,000) welfare bonus to be shared across its 1,350 employees globally to help staff grapple with the rising cost of living.
"We are very satisfied with our results in these first nine months. We experienced growth in all of the markets and distribution channels in which we operate. In spite of a particularly challenging macro-economic context, EBITDA grew compared to 2021 thanks to an acceleration in revenues and our constant efforts to control discretionary costs. We are well aware that inflation is significantly curtailing the purchasing power of families, and as a result we have decided to give a welfare bonus amounting to about € 500,000 in total to our employees to show our concrete support," said Cristina Scocchia, CEO, illycaffè.
Founded in Trieste in 1933, illycaffè is one of the world’s most prominent coffee roasters, with a presence within restaurants, hotels and offices in 140 countries worldwide. Additionally, the company currently operates 70 cafés globally.
illycaffè achieved revenues of approximately €500m ($487m) in 2021.