De’Longhi & La Marzocco: What consolidation means for the espresso machine market

  • Last week, De’Longhi S.p.A. acquired a 41% stake in La Marzocco from its parent company, De’Longhi Industrial S.A.
  • This is the latest market movement capitalising on the growing professionalisation of consumers making coffee at home
  • Ongoing consolidation in the espresso machine market has impacts on the rate of innovation and product development

TWO YEARS ago, De’Longhi Industrial S.A. caused confusion across the coffee industry by announcing its acquisition of La Marzocco – with its subsidiary De’Longhi S.p.A. rejecting any connection with the brand at the time.

Fast forward to last week, and De’Longhi has clarified its messaging. De’Longhi S.p.A has officially acquired a 41% stake in La Marzocco from its parent company, De’Longhi Industrial, for $374 million.

This brings La Marzocco under the same roof as superautomatic coffee machine manufacturer Eversys, which was fully acquired by De’Longhi in 2021.

Given that La Marzocco was already under the wider De’Longhi umbrella, many are viewing this acquisition as more of an in-house manoeuvre that has enabled each brand to retain its independence.

“The situation is less about an outright acquisition and more of a strategic restructuring of ownership between De’Longhi S.p.A and De’Longhi Industrial,” says Julio Guevara, a business development manager consultant in the coffee industry. 

“This difference is crucial. It suggests that the operational independence of the involved companies remains a priority, which is a smart move. It also allows them to leverage the robust health and strong market positions of both entities.”

Despite this acquisition being more of a corporate reshuffle, the bringing together of these two brands still represents wider trends across the industry.

Following a number of other major acquisitions (such as Breville buying Lelit in 2022, as well as the acquisition of Eversys), this does show the overall direction of the espresso machine market.

So, why La Marzocco specifically? 

By buying a stake in a brand that has developed something of a “cult” status in the specialty coffee community, De’Longhi has taken a similar approach to other notable acquisitions across the industry. This is where larger, historic coffee companies have sought to capitalise on a smaller brand’s value in and relevance to the specialty coffee community. Examples of this include Nestlé’s acquisition of Blue Bottle and Nordic Approach becoming a part of Neumann Kaffee Gruppe.

At-home vs out-of-home consumption

This acquisition also demonstrates how important the premium at-home/prosumer market is. Both De’Longhi and La Marzocco have a specific focus on domestic coffee machines. La Marzocco’s home machines, such as the Linea Mini, have gained particular prominence in recent years. Along with the contributions of Eversys, this new espresso machine supergroup can target every facet of the booming at-home market.

This is because La Marzocco offers a much more professional, sophisticated prosumer machine – in stark contrast to De’Longhi’s own range sitting at a lower price point. Ultimately, this means that no matter what a home consumer is looking for, the group will be able to accommodate.

It also shows that De’Longhi clearly recognises the at-home market’s vast potential for premiumisation – with La Marzocco being an ideal way to capitalise on that.

Beyond the at-home market, this acquisition also points to De’Longhi’s clear desire to capitalise on La Marzocco’s presence in the out-of-home segment. 

While Eversys’ super-automatic machines are gradually coming to be more openly embraced by specialty coffee, many third wave coffee shops still prefer to use high-quality semi-automatic machines. This is an area where La Marzocco’s brand equity and market share is particularly strong – and somewhere that De’Longhi’s supply chain and infrastructure could potentially improve profitability through economies of greater scale.

Overall, this means that De’Longhi and other large manufacturer groups are likely to become something of a one-stop shop for espresso machines – catering to a range of price points and consumer bases across both the professional and domestic markets.

The espresso machine market will be affected by consolidation

Is innovation slowing down?

Beyond the overwhelming trajectory of market consolidation that we’ve seen, this move could have other implications. For espresso machines in particular, there’s an interesting question to ask – are we likely to see the same level of innovation as more brands are acquired?

This is difficult to answer. To start with, it’s worth acknowledging that as with any industry, size is a factor. Smaller equipment manufacturers are in a better position to experiment. If they’re acquired by a larger company, true technical innovation may become harder to achieve. 

This can be because of a number of factors: to start with, corporate bureaucracy can understandably mean that innovation simply takes longer. A push to standardise a portfolio of espresso brands could also stifle progress – whether that’s in terms of raw materials, electronics, software, and so on.

“It seems that this move might be more of a transfer of shares and control within the De’ Longhi umbrella rather than a broader acquisition,” says Julio. “This could indicate stability and continuity, rather than significant shifts in market dynamics or technology innovation in the immediate future.”

At the same time, there’s also a counter-argument that with the right management, De’Longhi’s economies of scale, corporate network, and more capital could give brands like La Marzocco and Eversys the freedom to truly invest in research and development.

For the espresso machine market at large, it’s easy to see the direction that things are going. Consolidation is likely to continue as the commercialisation of specialty persists. Just what this slew of acquisitions means for innovation, however, is unclear: only time will tell.

Coffee Intelligence

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