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Rising costs hit profits for Italy’s Caffè Borbone




Italian roaster says rising raw material and energy costs negatively impacted profits in 2022, but coffee pod sales continue to perform well

Caffè Borbone achieved 2.5% revenue growth in the third quarter to reach €58.9 million | Photo credit: Caffè Borbone

Caffè Borbone’s gross operating profit fell 28% this year, despite sales growth of 3% and the good performance of its coffee pods and capsules business.

The Naples-based coffee roaster reported profits of 48.2 million euros ($50 million) for the first nine months of 2022, down 28% from the same period in 2021.

The company said a decline in profits was likely due to lower domestic coffee consumption during the pandemic. However, profits were further hampered by rising raw material, energy and transportation costs this year.

Caffè Borbone is one of the main Italian producers of coffee in compostable pods and compatible capsules.

The company said its single-serve coffee products continued to perform well, climbing to second place in single-serve coffee sales in the large-scale retail channel. It was the first time that Caffè Borbone was placed above Swiss food and beverage giant Nestlé.

Caffè Borbone achieved revenue growth of 2.5% in the third quarter during the three months ended September 30, 2022 to reach 58.9 million euros ($61 million).

For the first nine months of 2022, the company’s revenue reached €192.9 million ($201 million), representing sales growth of 3% compared to the same period in 2021.

The roaster also reported 40% growth in international sales this year, citing global channels as “increasingly strategic to the future prospects of the business”. However, Caffè Borbone did not disclose the international chain’s contribution to revenue.

The Italian investment holding company Italmobiliare holds a 60% stake in Caffè Borbone. Its board said the roaster drove its revenue growth during the pandemic, when sales exceeded 250 million euros ($255 million).

Italmobiliare posted a 22% increase in overall revenue for the nine months ending September 30, 2022 to 1.3 billion euros ($1.35). The company also operates food companies Capitella and Callmewine, and has Italian energy companies Italgen and AGN Energia in its portfolio of 11 brands.