Doram I am not sure this is the best place for this discussion, and it seems that we will only go round in circles if we continue. I will try to stop. :)
Yup I agree, but it was nice to voice (and listen to) different opinions without us calling each other names!
It’s a great discussion and everyone is making points and supporting their views, but also being respectful when disagreeing.
Mark-drinks-coffee Yup I agree, but it was nice to voice (and listen to) different opinions without us calling each other names!
It was nice. We all seem to be able to do this on Coffeetime, realise others may have different opinions to us and be respectful with our own opinions…it’s what makes it such a great forum.
Whatever happens with Lelit, there is a wealth of knowledge on here to enable us to keep our machines in good order for decades. I must remember to get a copy of the V3 Bianca firmware. I suppose I could read it back off my own LCC and save it. All of the components are industry standard, or replaceable with Industry standard components.
A lot of companies have been acquired by corporates over the years…Isomac, Expobar (now Crem), Rocket….it’s just the way of the world. ACS and ECM are still owner companies, but there are very few new entrants into what is a Tough market..ACS was probably the last new proper manufacturer to enter the market.
On that note, are La Marzocco / Mazzer still independent?
Ernie1 On that note, are La Marzocco / Mazzer still independent?
Independent (of the companies many of us use):
Eureka are owned by Nuova Simonelli I (believe)…they used to be Conte Valerio, Rocket, Crem, Isomac, etc.. etc.. all owned by corporates
Not that many owner companies now…
CafeNoir I meant the Bianca one on the LCC.
The Mara X firmware is on the Gicar box and I don’t have the code or equipment to flash those specific boxes. I know it can be done, but I don’t have the equipment and I don’t suppose Lelit will be allowed to send it to me know!
Sadly you may well have to buy a revised Gicar box!
MediumRoastSteam Rancilio are one of the many companies owned by Ali Group, Ceado I think are still owner owned. I believe Astoria own Rocket now
How about Izzo are they independent.
It certainly can be bad news fr a company to be bought out and not all motivations for doing so wok out well for the company tht got bought. One example is when the motivation is to remove competition, and another might be when the thing really being bought is IP.
But in this case, it looks to me that both companies have very strong brands, but in very different markets, and typically appeal to different buyers. It doesn’t make sense to ‘Brevillise’ Lelit - theyd end up with a hybrid that would probably appeal to neither market.
What does make sense is for the muscle of a Breville buying Lelit to build that brand, not to gut it. My guess is that that’s what they’ll do, and then, having that kind of global muscle can be a very good thing.
I hope.
Time will tell.
I would potentially consider it as good. I do think they won’t mess with the brand or Lelit’s innovation / technology value chain. They will do well to keep it separate. Lelit can benefit from Breville’s global reach, resources, capacity to scale; Breville, besides buttressing their top line, can also benefit from Lelit’s know how.
If they want to place Lelit in high street stores, how might Breville-Lelit want to play it?
Another question will be, would Breville keep Lelit’s current after sales business model?
LMSC Another question will be, would Breville keep Lelit’s current after sales business model
That’s exactly my worry. I know most parts are standard parts, but, for instance, on the MaraX and Elizabeth, the “quiet pump” is Lelit’s. The Control Centre and the Gicar box are also made for Lelit by Gicar, but there are other parts too: knobs, steam taps and assemblies, water tanks, which are all made specifically for their machines. Will they be readily available if it breaks?
MediumRoastSteam Exactly. Very ambiguous at this stage. My concern for Lelit as a brand is - what if return to base.
LMSC - I suppose it’s the dream of many small businesses to do a good job, be seems and be acquired or taken over. Many start-ups work with that mentality. The case of Lelit was its recently success. Lelit has been making coffee machines for a while, but its main focus was the Australian market - Lelit wasn’t a very popular in the UK and Europe at all.
Fast forward many years, and the Bianca, MaraX and Elizabeth come to market, and with that global success. They get noticed by a big company and are taken over. Great news for the business and the employees, in some cases: All of a sudden part to a huge organisation: better pay, perks, benefits, bonuses, etc. Better access to funds for R&D, tooling, equipment. However, certain minds of the business might find hard to adapt to become a cog in he machine rather than having decision and executive power. It might be the owners/directors get absorbed into the organisation to run that division. It might be they will take the money and quit and their entrepreneurial mindset kicks in to take part on a new venture.
for the customers…. Time will tell. I hope it’s for the better.
MediumRoastSteam Any commercially driven enterprise will have to be ruthless as they aren’t a charity. While we completely understand the technology, innovations and critically after sales (customers), eventually companies will have to a make a choice; either stand up to competitions or allow it to be sold or taken over.
As a owner, if a big corporation dangles the carrots - equity stake which can grow in the long term, attractive monetary offers on the table, run a division, and so on, it’s going to be very hard not to fall into these monetary temptations.
A company has worked so hard to get up to where it is at this juncture; if some one is giving the owners big figure sums as profit, status quo under a new roof; they may not say no unless they like their entrepreneurial freedom so much. They can see how it goes, see if it works out and go from there. These hold good for any small company.
As far as the customers are concerned, oh well. It’s another story.
LMSC If they want to place Lelit in high street stores, how might Breville-Lelit want to play it?
Another question will be, would Breville keep Lelit’s current after sales business model?
Do you think they would be planning to go into High Street stores, though? I suppose it depends on the definition of “High Street store”. Personally, I see espresso machines as a bit of a niche (pun unintended) market, so …. John Lewis, yeah maybe, but Argos? A bit too specialist, too low-volume? I’d think they’re better marketed through specialists that actually understand the product they’re selling, because by and large, it’s a pretty knowledgeable customer buying them.
As for after-sales business model, I hope the reason for buying Lelit is that they’re successful as-is, and if so, monkeying with their formula is a recipe for messing up what they bought it for. I’d also hope the terms of the deal include whoever in the current ownership is the driving force behind it stays on, in an executive role, at least part-time. That certainly is a model that works, if done right. A friend of mine recently sold his medium-sized but very successful company to a multi-national, but part of the deal is staying on for several years in a management role. He agreed, in large part because he trousers a big chunk of cash, but also because he offloads a large chunk of the stress and pressure, and gets a good salary to boot. The multi-national get a good addition to their portfolio, but get to keep the person driiving the ethos, the bit that actually made it a success in the frst place. The very worst thing they could do is replace someone like that, someone with the entrepreneurial flair, with a corporate suit with the business soul of a tax accountant.
Breville will mess with the ‘soul’ of a company like Lelit at their peril. By all means bring their finance clout, and sure, there may be aspects they can streamline, but if they mess with the customer-facing bits too much, they risk killing the golden goose.
LMSC As far as the customers are concerned, oh well. It’s another story.
We have seen big corporates swallowing smaller corporations/private enterprise. This is always done to monetise and improve profits. When it happens, both sides always promise they just want to make things better for the customers. They want to inject money, improve R&D, refine the products, enhance user experience - basically, they are philanthropists with only one goal - to make the world a better place and ensure prosperity and happiness to man kind and future generations (this is what VS promised to do with CFUK, didn’t they?)
Sorry for being a little suspicious and not naïve enough to buy this BS. Both Lelit and Breville are corporates, and as such their prime objective is to make money. Lelit did this up till now by developing and making innovative coffee machines many of us like. Many of us also like their approach to helping customers service their own machines (Lelit Insider videos). Basically - many of us like the company as it was up till now.
Enters the big fish, smelling money making opportunity and makes Lelit an offer they can’t refuse. For me, being the cynical person that I am, this is warning bell things are likely to change, and this change is unlikely to be to my benefit.
Every cent Breville puts in - they will want to make a profit on. They will want to squeeze every drop out of their new lemon. Will they succeed and how they will try to do it - I don’t know. But their aim will be to make a profit on their investment. If the best way for them to maximise profits will be to make better machines and give customers better value and better service - then sure, this is maybe what they will do. But in my opinion this is unlikely. From my experience looking at this sort of takeover, in the very best case Breville will let Lelit keep going as they did before without changing much. In the worst case - they will completely ruin it as VS did to CFUK. And of course there are all the grey shades in the middle. The one thing I am sure of is that the ultimate objective of such a move is to make a profit on the investment, and that, in my opinion, is unlikely to benefit coffee enthusiast.
