The Doncafe and C kafa packaged retail coffee brands will join Atlantic Grupa's coffee division | Photo credit: Strauss Coffee

Atlantic Grupa is set to acquire Strauss Adriatic d.o.o., the Serbian coffee roasting division of Israel’s Strauss Group, for €40.5m ($43.6m) as it seeks to strengthen its coffee business. 
 

Pending merger approval by the Serbian Competition Agency, the move would see Strauss Adriatic’s packaged retail coffee brands Doncafe and C kafa join Atlantic Grupa's coffee division. 

Zagreb-based fast-moving consumer goods distributor Atlantic Grupa said the agreement also includes the transfer of Strauss Adriatic’s production facility near Belgrade and its 220 employees. 

Atlantic Grupa said it will continue to make ‘considerable investments’ into its coffee business to develop its product range and boost its presence in retail and horeca channels.   
 

The group currently operates the Grand kafa, Bonito and Barcaffé packaged coffee brands in Serbia, as well as the four-strong Ziggy’s Coffee café chain in Zagreb, Croatia. 

“Atlantic Grupa is the largest coffee producer in the region of Southeast Europe, as well as the category leader, and this acquisition fully follows our strategy goal of strengthening our core business. Upon the merger approval, I will be happy to extend a warm welcome into our system to Doncafé, C kafa, as well as new colleagues joining us. I am excited with all the perspectives for our common growth and development,” said Mate Štetić, VP for Strategic Categories, Coffee and Snacks, Atlantic Grupa.  
 

Atlantic Grupa achieved 12% revenue growth in 2022 to reach KN 6.4bn ($914m). The group’s coffee division was cited as a key performer, recording 16.2% sales growth, while Serbia was cited as the group’s leading distribution unit, at 15.5% growth. 

Alongside its coffee division, Atlantic Grupa also has strategic business units focused on beverages, snacks, savoury spreads, pharma and donat (mineral water). In addition to operations in Croatia and Serbia, the group has distribution units in Slovenia, Macedonia, Austria and Russia. 

Like many Balkan nations, Serbia has a strong at-home coffee culture, with coffee forming a key part of traditional Serbian hospitality. 

Israel’s Strauss Group, which has been active in Serbia since 2002, said Serbian’s are the biggest coffee consumers in Eastern Europe and that traditional roast and ground coffee accounts for almost 90% of the market. 

Petah Tikva-based Strauss Coffee reported double-digit growth in Eastern Europe last year. 

As a result of the heavy at-home focus, the 137-strong Serbian branded coffee shop market comprises only four domestic brands, led by Kafeterija and Hleb & Kifle, and the international chains McCafé and Starbucks, which operate 15 and five outlets respectively.