STiR coffee and tea magazine

28 STiR coffee and tea / Issue 2, 2018 (April / May) Espresso Machines for a Booming Asian Market By Dan Shryock In a competitive espresso machine market dominated by Italian manufacturers, a Seattle company is making a name for itself. Synesso, started in 2004 by former La Marzocco designer Mark Barnett, produces 600-700 espresso machines a year, each built by hand. It looks across the Pacific Ocean to a rapidly growing market that offers sales opportunities for the entire in- dustry. More than 250 Synesso machines have been purchased by customers across Asia. And a company spokesperson says many more will be sold in the years to come. Recent numbers from the Specialty Coffee Association (SCA) indicate machine manufacturers should have plenty of sales opportunities. SCA reports there was a 435% growth in coffee shops during a 10-year period from 2007 to 2016 in Chi- na alone with about 85,000 shops at the end of that period. Sales in China jumped 45% from 2013 through 2016, total- ing $2.9 billion. Annual sales are predicted to increase by 131% to $6.8 billion by the year 2022, according to SCA. Starbucks has seized this window of opportunity and in De- cember 2017 opened a Reserve Roastery in in Shanghai, the larg- est in the world. The company also reported at the time it is now operating 3,000 stores in 136 cities in China – 600 in Shanghai alone – and is opening a new store somewhere in China at the rate of every 15 hours. In South Korea, 200 to 300 coffee shops on average open each month, according to published reports. Bean imports reached a record high in 2016 at 159,260 tons, and per-person consumption was estimated at 348 cups a year. "We've been working in Asia for nearly nine years," said Sarah Palmer, Synesso's global sales manager. First, the com- pany experienced high growth in South Korea and Japan. "And, now China has really taken off for us in the past year or so." Synesso is projecting 20% to 30% growth in sales to Asian markets this year "and I don't think we've scratched the sur- face," Palmer said. "I expect significant growth in the next five years." Synesso is not alone. Italian machine maker La Marzocco already is making gains in Asian markets. "Sales and volume in Asia have been having a significant impact on production, beginning with exports to China … followed by South Korea, Indonesia, Hong Kong, Thailand, and Vietnam," said Andrea Curtarelli, La Marzocco's area export manager for Asia. "The Linea Classic and the Linea PB (machine models) are very suc- cessful." The company's forecast "is extremely positive," Curtarelli said, noting they expect additional interest in smaller nations such as Cambodia, Myanmar and Laos. In addition, La Marzocco is targeting countries where specialty coffee is being cultivated and there is a growing interest "to develop a proliferation of micro-roasteries and bean-to-bar cafés," he said, "a significant phenomenon for the HoReCa sector and an enormous opportunity for indus- try players." Here's a sample of what's on the espresso machine market heading into 2018.

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