Rotterdam-based Louis Dreyfus (LDC) has acquired Brazil’s largest manufacturer of soluble coffee for an undisclosed sum.
The acquisition elevates LDC to one of the largest soluble coffee producers worldwide.
Companhia Cacique de Café Solúvel (Cacique) is headquartered in Londrina, Paraná, Brazil, and employs 1,000 workers at two sites. The Linhares, which opened in 2021, produces an average of 12,000 tons of soluble coffee annually. Cacique is Brazil’s largest independent domestic manufacturer of solubles and exports to 70 countries.
Michael Gelchie, LDC’s CEO, writes that the trading company is seeking to diversify revenue streams through value-added product lines “in this case by accelerating the scale-up of LDC’s soluble coffee business, recently initiated in Vietnam with its ILD Coffee Vietnam joint venture with Polish private label coffee manufacturer Instanta Sp. z.o.o.”
ILD manufactures freeze-dried instant coffee in Binh Duong province, Vietnam, with an initial production capacity of 5,600 metric tons. In September 2023, Instanta Chairman Jacek Szymczyk said the state-of-the-art facility in Binh Duong province “demonstrates our passion for coffee. We are excited to bring our expertise to this strategic joint venture with LDC, a renowned global merchant and processor of agricultural goods.”
Allied Research estimates the global instant coffee market was worth $32.9 billion in 2022, and is projected to reach $60.7 billion by 2032, registering a CAGR of 6.4% from 2023 to 2032.
Bloomberg writes, "Commodity trading houses have spent large chunks of their huge profits in recent years on assets that cement their production or sales positions, helping them lock in higher margins for the coming years. LDC’s profits exceeded $1 billion in 2023 as it benefited from volatility in agricultural physical and derivative markets.”
LDC has been actively trading Brazilian coffee for over 70 years and operates a coffee mill in Minas Gerais.