Breaking News
Investing Pro 0
🙌 It's Here: the Only Stock Screener You'll Ever Need Get Started

European Coffee Giant Targets Starbucks, Peet’s in U.S. Foray

Published Sep 29, 2020 06:00AM ET Updated Sep 29, 2020 08:18AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Bloomberg. BERLIN, GERMANY - JANUARY 08: Pedestrians pass by a Tchibo coffee shop on January 8, 2018 in Berlin, Germany. According to government statisticians, nominal revenue grew compared to the previous year and growing online sales have enabled German retailers to achieve record growth in 2017. (Photo by Michele Tantussi/Getty Images)
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio

(Bloomberg) -- Tchibo, one of Europe’s biggest coffee purveyors, is betting that more than 70 years of industry experience will help it take on the likes of Starbucks Corp (NASDAQ:SBUX). and Peet’s Coffee in its first U.S. foray.

The Hamburg-based company is introducing its roast and ground coffees to the U.S. in the coming weeks in the latest initiative by Chief Executive Officer Thomas Linemayr, whose previous experience in the U.S. included overseeing Lindt & Sprungli AG’s American division. Tchibo coffee is already sold across Europe and its CEO now aims to woo U.S. coffee aficionados.

“We will cater toward more affluent, younger consumers and coffee connoisseurs,” Linemayr, 59, said in a phone interview from New York. “We want to establish our company as a quality leader.”

Tchibo’s coffee will be distributed by Rainmaker Food Solutions and will be available at a broad selection of retailers in the Midwest markets of Illinois, Indiana, Iowa, Ohio, Michigan, Minnesota, Missouri and Wisconsin. The products include roast & ground, and whole bean -- two categories boosted by lockdowns -- and a coffee machine with grinding capacity will also be offered.

Tchibo, founded in 1949, has annual sales of “just under” $4 billion, with coffee comprising about half of that, Linemayr said. The company has coffee farms in Brazil and Tanzania, and has more than 1,000 retail stores, where it sells home appliances including coffee machines. The company aims to compete against the big U.S. national retailers and, to some extent, Starbucks and Peet’s, Linemayr said.

Tchibo is entering a roast-and-ground coffee market that generated about $4 billion in sales last year in the U.S., according to James Watson, a market analyst for Rabobank in New York. That market is experiencing a push toward a more refined product.

“There is significant premiumization occurring, which we think is due to consumers moving from coffee shops to grocery,” Watson said in an interview. “Companies that are gaining market are the largest and most premium.”

Coffee grinder sales and coffee subscription services are also growing in a period when the Covid-19 pandemic has changed consumer behaviors -- implying that consumers are building new infrastructure to support at-home consumption, Watson said. The shift may not last, though, once consumers feel more comfortable returning to coffee shops.

Premium Opportunity

“Americans are drinking far less coffee at the office than they once did, and a large portion of that is shifting instead to roast & ground in an at-home setting,” said Matthew Barry, the Chicago-based beverage consultant for market researcher Euromonitor International. “There is opportunity in more premium coffee designed for at-home consumption.”

As consumers spend more time at home and save money by not going out for coffee, Barry said there’s good reason to think that a significant amount of drinkers will look to splurge more on coffee than they did before Covid as long as the pandemic is around.

Tchibo will face competition from Illycafe SpA, the European roaster that sells premium products and has been expanding in the U.S. Covid-19 has been blow for the company’s sales, 60% of which comes from restaurants, cafes, airlines and transportation, chairman Andrea Illy told Bloomberg TV earlier this month. The Trieste, Italy-based company responded by boosting its focus on at-home consumption and e-commerce, helping counter some lost sales.

Linemayr is tapping into his U.S. experience to help Tchibo gain an American foothold. He had gained success when heading Lindt & Sprungli’s U.S. business from 1999 to 2016, helping the chocolatier rise to the No. 3 brand in the country based on sales.

“We tried to understand the consumer and carefully built the brand -- it was quite a ride,” he said. “What I learned is that you must really forget what made you successful in Europe -- you need to learn how to conduct business in America.”

©2020 Bloomberg L.P.

European Coffee Giant Targets Starbucks, Peet’s in U.S. Foray

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email