The German coffee roaster and retailer recovered from a loss of €167 million in 2022 and reported a profit of €68 million in 2023 due to lower operating costs and stronger coffee sales in the café, wholesale and self-service coffee machine segments

Tchibo currently operates 500 coffee shops of the brand throughout Germany | Photo credit: maxingvest

German coffee roaster and retailer Tchibo is profitable again after strong coffee sales across Europe last year.

The Hamburg-based coffee group, owned by the holding company Maxingvest, reported EBIT of 68 million euros (76 million US dollars) in the twelve months to December 31, 2023, compared to a loss of 167 million euros (186 million US dollars) in 2022.

Maxingvest suggests that supply chain volatility has eased as a result of the pandemic and Russia’s invasion of Ukraine. The group cited lower raw material, energy and logistics costs as the key to higher margins. Lower marketing and distribution costs also contributed to profitability.

Total revenue fell 1% to €3.2 billion ($3.7 billion) in 2023, driven by a decline in Tchibo’s non-food business, which includes a rotating range of clothing, furniture, household items and electrical appliances. However, Maxingvest reported stronger coffee sales in Tchibo’s café, wholesale and self-service coffee machine segments – driven by a decline in remote working across Europe and a recovery in away-from-home coffee consumption.

Tchibo currently operates 500 branded cafés across Germany and a further 320 in seven international markets. The coffee roaster’s portfolio of packaged coffee brands includes Tchibo, which is sold in 60 markets worldwide, as well as Matthew Algie, Davidoff Café, Smokin’ Bean, Piacetto and Caffè Molinari.

Despite “persistently high cost pressure” and increasingly “price-sensitive consumers”, maxingvest forecasts moderate sales growth for Tchibo in 2024 and EBIT at the 2023 level.

Tchibo, led by CEO Erik Hofstädter since December 2023, has committed to sourcing 100% of its coffee “responsibly” by 2027. The German company is working with sustainability auditor Enveritas to assess its supply chain and measure progress on environmental, economic and social KPIs. It currently sources its coffee from about 75,000 smallholder farmers in Guatemala, Honduras, Vietnam and Brazil, but reports that only 20% are currently Fairtrade, Rainforest Alliance or USDA Organic Seal certified.

The coffee roaster and trader, along with other major European coffee companies such as Lavazza, Löfbergs and Delta Cafés, has also expressed its opposition to the upcoming EU Deforestation Regulation (EUDR) laws, which will come into force at the end of 2024. International Coffee Partners (ICP), of which Tchibo is a member, has actively campaigned for a delay in the implementation of the EUDR to allow small coffee farmers to comply with the laws.

Maxingvest, which also owns German skincare brand Beiersdorf, reported group sales of 12.6 billion euros ($14.1 billion) in 2023, up 5% year-on-year, with total EBIT up 29% to 1.1 billion euros ($1.3 billion).