,China

Yum China, Lavazza lay $200m plan to open 1,000 stores by 2025

Lavazza has 22 stores in China across Shanghai, Hangzhou, Beijing and Guangzhou.

Yum China and Lavazza are accelerating the expansion of the store network of the Italian company's cafés in the world’s second largest economy, aiming to open 1,000 stores by 2025.

Both companies will initially inject US$200 million to fund its future growth. The joint venture is expected to be Lavazza's exclusive distributor in the mainland to introduce more products from Lavazza's global portfolio.

Early 2020 saw Yum China and Lavazza Group formed a joint venture to explore and develop the Lavazza café concept in China. The first Lavazza flagship store in Shanghai, the first store outside of Italy, opened its doors to customers in April 2020.

Lavazza has since grown to over 20 stores in China across Shanghai, Hangzhou, Beijing and Guangzhou.

"The recent progress of Lavazza cafés in China has been encouraging and reaffirms our belief that our partnership is well positioned to capture the significant coffee opportunity in China with accelerated store network development. We are excited about what the future holds for this iconic Italian brand," Yum China CEO Joey Wat said in a statement.

"Leveraging Yum China's world-class supply chain, digital capabilities and in-depth knowledge of Chinese consumers, we look forward to bringing Lavazza's premium and authentic Italian coffee experience and products to even more consumers in China."

"The potential for coffee in China is vast; there is a lot of unexplored white space. As the largest restaurant operator in China, Yum China is the best partner to further grow the Lavazza brand in this market given its deep understanding of local consumers and market dynamics,” added Antonio Baravalle, CEO of Lavazza Group.

The next phase of Lavazza store expansion in China is to increase the density of its café network in “higher tier cities with a variety of store formats for a wider range of occasions.” 

With 22 stores as of August 31, the joint venture plans to more than double that by the end of 202 and will further enhance capabilities to “drive efficiencies, in particular in-store operation, branding and marketing efforts.”

The venture will also market, sell, and distribute Lavazza's retail products in mainland China, including coffee beans, ground coffee and coffee capsules.

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