The Consolidation Playbook: How Five Companies Will Own Your Coffee

By June 2025, Lavazza was in advanced talks to acquire German luxury coffee roaster Dallmayr. De'Longhi owned 41% of La Marzocco and all of Eversys, with rumors of silent investments in other espresso manufacturers. Sucafina and Neumann Kaffee Gruppe had swallowed smaller specialty traders across three continents.

The pattern is unmistakable. The timeline is accelerating. The outcome is inevitable.

Within five years, five companies will control 80% of the global specialty coffee market.

And the worst part? For most roasters, that's exactly what should happen.

The $18 Billion Reality Check

Let me show you what the endgame looks like.

Keurig Dr Pepper agreed to acquire JDE Peet's for $18 billion. $18 billion. For a company most coffee drinkers can't even name.

Coca-Cola bought Costa Coffee for $5.1 billion—$1 billion more than expected. Nestlé paid $7.15 billion for Starbucks' retail products. JAB Holdings has assembled a coffee empire worth over $50 billion through strategic acquisitions.

These aren't coffee companies anymore. These are financial vehicles using coffee as the commodity.

And they're not done.

Why Everyone's Prediction Is Wrong

Industry analysts predict a 3% decline in US coffee shops from 88,300 in 2020 to 85,800 in 2025.

They're looking at the wrong metric.

The number of locations won't change much. But ownership? That's where the bloodbath happens.

I'm predicting 67% ownership change globally by 2027. Not closures. Changes.

Your favorite "independent" roaster? Majority-owned by a PE-backed collective.
That artisanal café chain? Quietly absorbed into a regional powerhouse.
The specialty trader you've worked with for years? Now a subsidiary of Sucafina or NKG.

Same stores. Same signs. Different owners.

And for most of you reading this, that's not a threat. It's an opportunity.

The Three-Stage Consolidation Pattern

Stage 1: The Vertical Squeeze (2022-2024)

This already happened. You just didn't notice.

Rising interest rates made debt expensive. Arabica futures climbed from $2 to $4+. Margins compressed from 35% to 12%. Working capital requirements tripled.

Small to medium roasters couldn't access cheap credit. Couldn't lock in long-term supply contracts. Couldn't weather the volatility.

Larger traders stepped in. Not as buyers. As "partners."

"We'll extend your payment terms. We'll guarantee supply. We'll take on your foreign exchange risk. Just sign this little agreement giving us first right of refusal if you ever sell."

That's not partnership. That's a trap. And thousands of roasters walked right into it.

Stage 2: The Horizontal Consolidation (2024-2025)

This is happening now.

Private equity discovered that buying one $3M revenue roaster isn't interesting. But buying ten $3M revenue roasters, merging their operations, cutting overlapping costs, and creating a $30M "artisanal collective"? That's a 5x multiple waiting to happen.

European PE firms are particularly aggressive. They're assembling regional portfolios: five roasters in Germany, seven cafés in France, three specialty traders in Italy.

On paper, they remain independent. In practice, they share procurement, logistics, back-office operations. The founder stays as "creative director." The brand stays intact.

The profits, however, go to Luxembourg.

Stage 3: The Strategic Exit (2025-2027)

This is what comes next.

Those regional portfolios get sold to the big five: Nestlé, JAB, Lavazza, JDE, and whoever emerges as the fifth (my money's on De'Longhi or a surprise Asian player).

The PE firms make their 3-5x return. The founders get their liquidity event. The employees keep their jobs (at least for 18 months).

And the industry gets more concentrated. More homogenized. More optimized.

Why You Should Stop Fighting It

Three weeks ago, I had a call with Andrea, a roaster in Bologna doing €2.2M in annual revenue. Fighting to stay independent. Fighting to maintain his margins. Fighting to compete with everyone.

"Matteo," he said, "I didn't get into coffee to work for some private equity firm."

I get it. I really do. But here's what I told him:

You're already working for them. You just don't get the benefits.

You're competing with companies that have:

• 10x your purchasing power

• 5x your working capital

• 3x your staff expertise

• Unlimited access to cheap credit

You're fighting a war you can't win with weapons you can't afford.

So here's the radical truth most consultants won't tell you: for 80% of specialty roasters, getting acquired is the best business decision you'll ever make.

The Economics Nobody Talks About

Let me show you the math on a typical acquisition:

Andrea's Current Reality:

• €2.2M revenue

• €264K profit (12% margin after he pays himself)

• €60K salary (criminally low for 60-hour weeks)

• Works nights and weekends

• Constant cash flow stress

• Can't take vacation

• Business worth maybe €800K-€1M

Andrea's Post-Acquisition Reality:

• €180K salary (guaranteed)

• €200K cash upfront

• €400K earnout over 3 years (if performance targets hit)

• 40-hour weeks

• No cash flow stress

• Actual vacation

• Someone else handles the boring stuff

Total potential: €1.48M over 3 years vs. €444K staying independent (3 years of current profit + salary).

That's not even close. And I haven't even mentioned the part where he's not personally guaranteeing loans anymore.

The Five Types of Roasters (And Which Ones Survive)

Type 1: The Already-Dead (60%)

Revenue under €1M. Margins under 8%. No differentiation. Competing on price.

These businesses are worth more dissolved than operating. The equipment has resale value. The customer list might fetch something. But the business itself? Already dead. Just waiting for the funeral.

If you're here, sell now. To anyone. For anything. Your business isn't getting more valuable. It's getting less valuable every quarter.

Type 2: The Perfect Acquisition Target (25%)

Revenue €1M-€5M. Decent margins (10-15%). Recognizable local brand. Clean books. Some differentiation.

This is where PE firms and strategic buyers are shopping. You're big enough to matter but small enough to be affordable.

Your move: get your house in order, hire a business broker, and run a proper process. You'll get 3-5x EBITDA. Maybe more if you can create a bidding war.

Timing matters. The window won't stay open forever.

Type 3: The Regional Powerhouse (10%)

Revenue €5M-€20M. Multiple locations. Strong brand. Solid infrastructure.

You're too big for most PE firms, too small for strategics. You're in no-man's-land.

Your move: either go big (acquire smaller roasters yourself, build a regional empire, sell to a strategic in 3-5 years) or go niche (shrink to Type 4, focus on ultra-premium).

Staying where you are is the worst option. You're big enough to have corporate problems but not big enough to have corporate resources.

Type 4: The Cult Brand (3%)

Revenue €500K-€3M. Insane margins (30%+). Rabid customers. Waiting lists. Un-replicable positioning.

You're the Luigi from Naples I mentioned earlier. Or Blue Bottle before Nestlé bought them (and destroyed them).

You're not competing on coffee. You're competing on cult membership. Your customers are fans. Your brand is a personality.

This is the only sustainable independence model. And it only works if you're willing to stay small, stay weird, and stay expensive.

Type 5: The Acquirer (2%)

You're not reading this thinking about selling. You're thinking about buying.

Good. Keep reading.

The Acquisition Playbook (For Those Who Choose War)

If you're going to fight the consolidation wave, you better learn to surf it.

Step 1: Pick Your Territory

Don't try to compete nationally. Pick a region you can dominate. Three cities. Ten zip codes. Whatever you can reasonably own.

Then systematically identify every roaster doing under €2M in your territory. Those are your acquisition targets.

Step 2: Build Your War Chest

You need capital. Lots of it. You can't acquisition-fund with cash flow alone.

Options:

• PE partnership (sell 40% to a firm with €20M to deploy)

• Strategic debt (find a lender who understands the play)

• Seller financing (convince targets to take 50% now, 50% over 3 years)

Most successful consolidators use all three.

Step 3: Make It Make Sense

The first acquisition needs to show the model works.

Buy roaster #1. Cut overlapping costs (admin, sales, marketing). Keep both brands. Merge the backend. Increase combined margins by 8-10 percentage points.

Now roaster #2 sees the logic. And roaster #3. And suddenly you're not begging. They're calling you.

Step 4: Build the Exit

You're not building a business. You're building an exit.

Every decision should be: does this make us more attractive to a strategic buyer in 3-5 years?

Clean books? Yes.
Diversified customer base? Yes.
Proprietary systems? Yes.
Founder dependency? No.
Complicated ownership structure? No.
Messy skeletons? No.

The Uncomfortable Question You Need to Answer

Why do you want to stay independent?

Really. Think about it. Not the romantic answer. The real answer.

Is it because you love the work? (Most founders don't. They love the idea of the work. The actual work is 80% spreadsheets and supply chain stress.)

Is it because you want to build something meaningful? (You can do that as part of a larger organization. Maybe more effectively.)

Is it because you can't stand the idea of someone else telling you what to do? (Fair. But you're already letting suppliers, customers, and banks tell you what to do. At least an acquirer pays you for it.)

Is it because you think you'll regret selling? (Maybe. But I've never met a founder who regretted selling for a good price. I've met dozens who regretted waiting too long and selling for a bad price. Or not selling at all and watching their business decline.)

What I'd Do If I Were You

For the 85% who should sell:

Call three business brokers this week. Get valuations. Understand what buyers are looking for. Fix what's broken. Run a proper process.

Don't wait until you're desperate. Desperate sellers get desperate prices.

Sell from a position of strength. When you're growing. When your margins are decent. When buyers are competing.

For the 3% building a cult:

Double down on weird. Get weirder. More expensive. More exclusive. More cult-like.

If 100 people would kill to buy your coffee, you don't need 10,000 people who think it's "pretty good."

Build the religion. Forget the market.

For the 2% going to war:

Raise capital now. Start shopping for target #1. Build the consolidation machine.

But remember: you're not building a coffee business. You're building an acquisition vehicle. The goal is to sell to the big five in 5 years.

If you forget that, you'll end up like the targets—struggling to stay independent while slowly bleeding out.

The Prophecy

By 2027:

• 67% ownership change

• 5 companies control 80% of "specialty"

• 200+ "artisanal collectives" backed by PE

• 50+ cult brands doing €500K-€3M

• Everyone else bankrupt or working for someone else

This isn't pessimism. It's pattern recognition.

And the question isn't whether it happens. It's whether you profit from it or become a casualty of it.

The consolidation train is leaving the station. You can get on board. You can get run over. Or you can try to outrun it.

Two of those options are viable.

Choose wisely.