https://themarketherald.com.au/breville-group-asxbrg-to-acquire-italian-specialty-coffee-company-lelit-2022-03-11/ Hopefully they will continue to operate as subsidiary and maintain quality while improving supply chain.

They bought Baratza back in 2020, but that brand remains intact. I wonder if the same will happen with Lelit.

Wow. I hope Lelit doesn’t change much, but “A pre-acquisition restructure of the LELIT Group has commenced, with key members and the founders of LELIT joining the Breville Group” That alone could be quite meaningful…

The one hesitancy I had when buying the Bianca was whether when spending that kind of money I should’ve gone with a name with a more recognisable heritage. Maybe I should’ve saved for that Linea Mini after all… Question is should I sell the Bianca before the value inevitably plummets.

Will it be any different from VW owning Porsche, or Fiat owning Ferrari ?

Well, will they start to use cheaper parts under the hood to squeeze out more greedy profits? That’s what happens with all our recognised food brands for example when the big fish buy them. Hope not, but who knows at this stage. It is slightly encouraging to hear members of the Lelit team will join the group but I guess it’s all vague at this stage

Or Smeg owning La Pavoni, or Philips buying the Gaggia brand. As long as they keep their ethos, it should be good. Breville would give them the business know-how, give them a cash injection so they potentially could expand the business and improve their machines. However… Breville already makes coffee machines in the same segment. In fact, they acquired a direct competitor on the lower lower/mid product ranges, (Victoria, Grace, Kate, Elizabeth) but there’s no similar on the upper range (MaraX, Bianca, Giulietta). Also Lelit has two divisions: coffee machines and steam irons. I’m assuming the acquisition was for both divisions. Oh well. Big fish eats small fish. My main concern will be availability of spares, electronics, gaskets, valves, hearing elements, boilers, pumps, etc. @"DavecUK"#1 - how’s that going to affect your relationship with Lelit?

I assume this is the Aussie Breville, known as Sage in the UK, which isn't to be confused with the makers of £5 sandwich toasters sold in Argos when you were a kid. The Sage/Breville gear is pretty decent mid to higher range consumer goods. Some of their stuff is pretty obsessively made too, like the waffle iron, vacuum blenders or in particular the Pizzaiolo oven.

My main concern is parts/repair longevity in future for pre-Breville Lelit machines. I’ve not had any first hand experience with Sage products so I don’t know what repair/parts availability is like. I know they make quality appliances and I’ve been coveting the Pizzaiolo, but I never really saw my Bianca as an appliance. But if they discontinue support for any ‘legacy’ Lelit machines then that is really going to suck. Some people may not mind but I’m tempted to put my Bianca up for sale and get something from one of the more established Italian brands.

I am not sure it is likely to affect the value of machines like the Bianca, it may even make pre-Breville acquired Biancas more desireable a few years down the line.

Breville to acquire Lelit

Cuprajake

they probably have, the problems come when they try to maximize profit

Stevebee

Cuprajake maybe the V is still on offer 😁

CafeNoir

limelight Oh dear, Not a fan. Much prefer a large number of smaller companies than umbrella-style multinationals. Competition and diversity are not just pretty words

Cuprajake

Stevebee maybe the V is still on offer

haha, im happy with the ‘b’ just always fancied the Vesuvius

Gagaryn

Dunno, I’m less confident. The spectacle frame analogy is a good one, companies that once made quality frames like Oliver Peoples, Rayban and Oakley started to churn out tat after the Luxottica take over. Going back even longer and more niche but Fender started making worse guitars when taken over by CBS in 1965. Likewise Gibson made much worse guitars after the Norlin take-over in 1969.

Big companies get big by maximising profit i.e. cutting costs and selling to bigger market. The quality needs to be adequate rather than excellent. I expect similar changes will be made at Lelit.

Ernie1

Gagaryn

As a bespectacled guitarist the Fender/Gibson example is another good one I’m familiar with!

The Bianca is somewhat unique in its features for price-point ratio, hence its popularity I suppose. Given that it’s barely a few hundred more than the Oracle, and actually lower priced than the Oracle Touch, for a machine in a completely different league, I can see the merit in trying to eliminate the competition.

£100mil isn’t an obscenely huge sum of money these days (in business terms…). Whilst I’m hopeful it’s a positive acquisition for Lelit fans/owners, I’ll reserve my space very much on the fence on this one.

dfk41

Gagaryn Surely this argument is only for machines built under the new regime?

John_Yossarian

It will depend on the strategy. Sometimes a brand is bought and cherished with little interference, but more often than not, “simplification and downsizing” are the reasons for buying out a company.
Let’s hope Lelit are left to do what they do best with improved supply chain and not at the expense fo their quality in the future.
For me two years ago it was between Bianca and the V. I went for the latter.

Sham

tompoland No they bought the brand to make money… Which often does lead to lower quality in the short term when a director wants to justify their high salary (or get some fat bonuses). The only difference is whether they’re looking for short term or long term profits which wholly depends on the CEO and board. Bit of a gamble most of the time which way it’ll go.

drdre89

Say hello to the “Lelit Barista Express”

Dusk

Whether they look to change materials or manufacturing methods to save money is an unknown (let’s hope not) but I can’t imagine they would look to change the Sage or Lelit models. I don’t expect they have much overlap in their respective target markets so keeping the distinctive brands would make sense

tompoland

As has been mentioned, they bought Baratza back in 2020 and they kept their brand values alive. They don’t buy brands to denigrate them, they buy them to build them. Putting plastic on a Lelit would be just plain dumb, and Breville ain’t dumb. Fiat got better after VW bought them. Same for Rolls Royce after BMW. A company does not spend AU$173 million to acquire a quality, specialist brand like Lelit with an intent to compromise the very values such as quality and innovation that were the reasons for the brands market share. My prediction is that Lelit’s values will be preserved, that they will benefit greatly from more R&D funding and their distribution network will grow exponentially.

Mark-drinks-coffee

tompoland

Move along, the internet is no place for your well reasoned, balanced and optimistic views.

It’s all doom, DOOM I TELL YOU

DavecUK

tompoland Completely agree Tom.. For sure I probably won’t be involved in testing and suggesting, but I’ve done my bit.

MediumRoastSteam

tompoland Fiat got better after VW bought them

Is that so? Are you sure FIAT is owned by VW? I wasn’t aware.

JahLaza

All speculation at this stage, but, generally it only goes one way from here on in.. another one sold out!! Whatever happens, thankfully the parts will be available as Dave said above and I and the rest of us owners will hopefully have our ‘authenticLelits’ for many years to come!

fl13dl1c3

As a Lelit owner, I’d start looking into somehow downloading and documenting all of the videos of servicing your machine from Lelit Insider on YouTube. I’d imagine larger companies not in agreement with teaching individuals how to DIY fixes from a legal and financial aspect.

That’ll be my to-do after seeing this thread.

Gagaryn

I have no skin in the game so my only interest with what happens now with the Lelit acquisition, and Baratza is curiosity. These were both specialist manufacturers that catered for a specialist market - i.e. men of a certain age who spend far too much time trying to perfect coffee. Breville is large public company who make consumer products. They have shareholders and accountants on their Board. There is only ever one winner in a public company when the product development team has a disagreement with the accountants.

JahLaza

Gagaryn There is only ever one winner in a public company when the product development team has a disagreement with the accountants.

Yes - @DavecUK has always stated that lelit are a great company for innovating and wanting to improve. They’ve listened to and implemented his suggested improvements to make the product better for the end user. As per quote above I can’t see that continuing (to the same extent anywho!) - pity, I was looking forward to future products. maybe lelit didn’t think they could make better machines by now and thought it time to cash in🤔

MediumRoastSteam

So I can now officially say I have a Breville Dual Boiler 🤌

Gagaryn

MediumRoastSteam I think this is just a misquote from above. Not sure the car analogies are that relevant. BMW only bought the Rolls Royce trademark and makes completely different cars for a different market than RR did.

The RR and Bentley Business was sold to VW how now make Bentleys (having not acquired the RR trademark) - again very different cars from before for a different market.

Fiat owned half of Ferrari since the late 60’s then bought more in the 90’s before the whole company went into partnership with Chrysler who spun off Ferrari into a separate entity again fairly recently. Ferrari is one of these unusual companies that probably make more money selling branded caps and watches than they do cars.

tompoland

Gagaryn is right re VW/Fiat. My bad. Never a good idea to rely on my memeory. Regardless of who bought who, the point remains that smart companies acquire other companies and tend to grow those brands as separate entities rather than absorb them. IMHO (and with full respect for others who beg to differ) that’s the relevance of the car analogy. Here’s VW acquisitions with these brands and what they stand for typically having been made stronger post acquisition:

Audi
Bugatti
Porsche
SEAT
Lamborghini
Skoda
MAN
Scania
Ducati

My point being that a smart aquirer makes the aquired brand stronger, not weaker.

Your honour, I rest my case.

(As always, time will tell)

HVL87

tompoland with such acquisitions there is a risk that products become more homogenous and it stifles innovation. An Audi A3 is essentially a VW Golf with a different trim. An Audi R8 is very similar under the hood to a Lamborghini Huracan. Even a Bentley Continental GT shares some cheap parts with an Audi A3!

Breville seem like a smart company and they know how to appeal to the average consumer - hopefully they understand when to keep a good thing going…as many have said, time will tell and your typical coffee prosumer is a bit more savvy.

In some ways more established manufacturers such as Rancilio become more appealing as they have built there brand on commercial machines.

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