Imports: Easy Does It

Lavazza, the Italian coffee chain, takes a low-key approach with its first three U.S. locations.

By Lisa Bertagnoli, Contributing Editor -- Chain Leader, 9/1/2006

Lavazza’s Washington Street location is the largest of the three in downtown Chicago, at 2,094 square feet and 40 seats. The other two stores are each about 1,100 square feet with 20 seats.

Savory salads and sandwiches round out the menu, which is heavy on coffee drinks and sweets.

The interior features Italian marble, furniture and cherrywood finishes.

With hundreds of cafes in Europe, Lavazza is familiar to both Europeans and frequent travelers to the Continent. But the Turin, Italy-based coffee roaster has taken a decaffeinated approach to expansion in the United States.

In 2005, Lavazza opened its first three U.S. locations in downtown Chicago with no fanfare, the plan being to test the market’s waters before making a big splash. “Chicago is a great city, a crossroads geographically and demographically, and it’s a splendid location to test a concept,” says Joerg Oberschmied, vice president of operations for Arlington Heights, Ill.-based Premium Espresso, the U.S. arm of Lavazza.

Tourist Attraction

The menu offers cold and hot coffee drinks, breakfast pastries, desserts, gelato and light savory items such as salads and sandwiches in a limited-service setting. Gelato and desserts are made in Italy, flash-frozen and flown to the United States, while savory items are made on site.

The look is European, with marble floors and cherrywood chairs imported from Italy and sleek display cases holding desserts and packaged salads. Blow-ups of photographs from Lavazza’s annual calendar are on the walls; the calendar “is a fairly big thing” in Italy, Oberschmied says. Fashion photographer Ellen von Unwerth shot the 2006 calendar.

Given the downtown locations, Lavazza’s core clients are businesspeople, some of whom visit several times a day, Oberschmied says. Tourists, especially those from Europe who recognize the blue Lavazza logo, are also fans: “A group at the Washington store applauded the staff when they had the coffee,” Oberschmied says.

SNAPSHOT

Concept

Lavazza

Company

Premium Espresso, Arlington Heights, Ill.

Average Unit Volume

$430,000*

Average Check

$5*

Units

Expansion Plans

None

*Chain Leader estimate

Regional Accents

During the stores’ first year of operation, Lavazza took notes on the differences in the U.S. market. “This is definitely a drip market,” while Lavazza’s European cafes specialize in espresso, Oberschmied says. Upon seeing that the cafes are a favorite among women, the company added more salads and lighter sandwiches.

While the majority of menu items and coffee drinks were invented in Italy, the Chicago stores have created a few. One example is Blendissimo, a line of four blended coffee-and-gelato drinks. “When some corporate people came here, they took them back to the Italian market,” Oberschmied says.

Current plans are to stay the low-key course. “Our focus is on the three stores we have, and we want to make them successful,” says Oberschmied, who won’t discuss financials. The company recently hired a public-relations firm to help get the word out but has no plans to advertise.

Lavazza’s success with the restaurants may well depend on whether customers make the link between the restaurants and its wholesale coffee, which Premium sells to many Chicago restaurants and hotels. “It’s a high-quality product and that will be their thing going against Starbucks,” says Isidore Kharasch, president of Hospitality Works, a Deerfield, Ill.-based restaurant-consulting firm.

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