La Marzocco acquired by De'Longhi

Doram

https://perfectdailygrind.com/2024/01/delonghi-la-marzocco-acquisition-coffee-machine-technology/

😢

MattH

Interesting though it seems more a internal reshuffle at delonghi than a new purchase

MediumRoastSteam

MattH - looks like whatever was done in the “reshuffle”, which also included buying shares from minority stakeholders, Delonghi between group and industrial) now controls the company with a 88% shares in LM.

https://www.delonghigroup.com/sites/default/files/DeLonghi%20-%20Professional%20Coffee%20Business%20combination-Dec%2021st%202023_0.pdf

A bit above my head to make sense of the numbers though. All a bit confusing.

MediumRoastSteam

Yay! So now we (Lelit machine owners) no longer need to stand people taking the mick out of us saying that we own Breville machines. We can now say “how’s the DLLM?” (De Longhi Linea Mini), not forgetting of course the Smeg Europiccola, as La Pavoni was acquired by Smeg in 2019. Oh… and I forget about the Saeco Classic (Saeco acquired Gaggia in 1999 and then Phillips acquired Saeco in 2009).

Rancilio and Crem are owned by a massive Italian food equipment group called Ali.

No doubt there are others.

Watch out ECM and ACS… 😊

HarveyMushman

Noooooo! Selling the LM and buying a KVDW 😂

dfk41

There is a serious side to this. Why are multi-nationals buying up these thriving businesses. I am not going to start off a conspiracy theory but do you see the day when you pop into your local speciality coffee shop and find out the reason it has been shut for a week, is because the staff have been replaced by touch screens, the machines and grinders are gone to be replaced by commercial pod machines…..the upside is that there will be an enormous array of choice of pods

MediumRoastSteam

dfk41 - It’s the capitalist system, Open capitals. Money talks. those companies succeed and those with more money buy them to diversify the portfolio, gain knowledge or simply eat up the competition. It’s the world we live in, like it or not. Not much I can do about it.

I was actually shocked while doing some of this fact finding that Kenwood and Braun are brands owned by DeLonghi. I did not know that.

A lot of the indie coffee shops in the UK, where I live, have La Marzocco machines. Something I have observed, at least around where I live.

Personally speaking, if a shop uses a touch screen and pod machines, I’d simply not give them my business. Ultimately, they need to have a sustainable model and attract a certain clientele. Let’s not forget that we, coffee nerds, are the vast minority rather than the average consumer.

dfk41

MediumRoastSteam Yep, I cannot disagree with that. On Monday I am going to meet an old pal for a coffee and chat following health issues for him. We meet at a Holiday Inn for convenience to both. The surroundings are fine, no music etc. Last time I was there5 years ago or so it was all deep sofas and waiter service. Coffee tended to be a cafetiere served with biscuits. Now they have redesigned to a cafe type setting with tables and chairs, built a big serving area with the biggest BTC machine I have ever seen and have stopped serving fresh pastries etc…..progress?

This reminds me of a line from a famous Tyneside play called Close the Coal House Door Pet. It summed up the closure of coal mines in Newcastle being replaced with new industry. Two old miners talking, one says, " Divorsification….whats that man?' The reply is "well ye knaa, thats when they knock down yer coal mines and build yer porfume factories"

Doram

MediumRoastSteam It’s the capitalist system, Open capitals. Money talks. those companies succeed and those with more money buy them to diversify the portfolio, gain knowledge or simply eat up the competition. It’s the world we live in

Exactly that. The system is built that way, so the big/strong/rich get bigger/stronger/richer, and the smaller can't survive. This is another sad reminder of the environment we live in, and unfortunately this sort of convergence will probably just continue and increase, leaving only large corporations on the playing field.

MAXTHEDOG

MediumRoastSteam Personally speaking, if a shop uses a touch screen and pod machines, I’d simply not give them my business.

Here, here.

HarveyMushman

Jokes aside I’m surprised and disappointed by this. Obviously a lot of us felt similar with the Lelit acquisition but they were a much newer, much smaller business. Also, in my opinion Breville (Sage) have a much more respected position in the specialty coffee space than DeLonghi.

LM are what, 100 years old, they’ve been instrumental in the evolution of specialty coffee and in practically every specialty coffee shop in the world. I’m not saying they’re the only manufacturer like that but you can’t argue about their heritage. To sell out to a company that sells £20 coffee makers in Argos is just really really sad.

Doesn’t change the fact that I’m very happy with my Linea Mini and it’s unlikely I’d sell it just because of this news but I’d certainly be reconsidering if I was buying new.

MediumRoastSteam

HarveyMushman - it doesn’t mean it will change. It’s a controlling group. If DeLonghi preserves the ethos of the brand, it should be fine. Breville seems to be doing so, Smeg the same. And Ali with Rancilio. So let’s hope so with DeLonghi.

Still… DeLonghi owns kenwood and Braun. I did not know that. Yet, I squint when I see a DeLonghi appliance, but my eyes shine when I see Kenwood and Braun. So hopefully… all should be fine.

With Gaggia… slightly different story. Phillips tried to cheapen it out, it went sooo bad they know they are pretty much what they were before all the modifications, if not a little better.

Cuprajake

I wouldn't worry, it's happening in every sector

HarveyMushman

Still going to browse Kees machines 😅

Dusk

Who owned them before? Brands get sold all the time, sometimes it improves things and sometimes it doesn't. Given the current market position of LMz I don't see any reason to mess with the current business.

MattH

Dusk It was already delonghi

:De’Longhi SpA will acquire the stake from parent company De’Longhi Industrial, as well as from other minority shareholders.”

HarveyMushman

Before 2021 I think they only had a minority share but yeah looks like they’ve had a controlling share for a couple of years.

Dusk

So this isn't even a story, if they've already had a stake then they must know that it's a profitable business and will be even less likely to mess with it

HarveyMushman

Going from a 25% share to a controlling one technically means they could have directive influence on the company but as you say, unlikely.

I’d guess this is mainly DeLonghi wanting to license the badge/name on low-end machines or bean-to-cups.

John_Yossarian

The chances are they might have identified gaps and opportunities to increase margins, hopefully by not implementing cheaper suppliers. Most often this might be inventory handling, sustainable supply chain, etc. This is happening everywhere, in the past P&G and Unilever used to own the majority of leading fragrance brands, e.g. Boss, Calvin Klein, etc. They are now owned solely by Coty. Nothing changed with the brands.
I do not believe DeLonghi would touch the R&D and the innovation per se, but most likely would try to optimise the business handling, if any at all.

MattH

Or they are working some accounting magic….