Multinational agricultural crop trading giant Louis Dreyfus Company (LDC) is purchasing the largest instant coffee exporter in Brazil, Cacique de Café Solúvel (Cacique).
The companies jointly announced the deal this morning. The financial terms have not been disclosed.
For LDC, one of the world’s three largest green coffee merchants, the deal marks continued investment in coffee production and distribution throughout the coffee value chain. It also follows a year of record profitability at a time when the green coffee sector has been hampered by price volatility, small-scale farmer poverty and climate-related challenges.
The announcement comes less than a week after LDC announced that it had achieved more than $1 billion in profit for the second year straight. A report from Bloomberg last week attributed to profit in part to continued volatility in commodities markets, i.e. “the price swings and market shortages that merchants crave.”
In a public announcement last week, the crop trading and processing conglomerate said the “resilient” financial results in 2023 were in “a context of ongoing geopolitical tensions and climate-related challenges that continued to disrupt trade flows.”
The deal to acquire Cacique — which operates two Brazilian factories and employs approximately 1,000 people globally — vastly expands LDC’s reach in the instant (a.k.a soluble) coffee market.
After more than two decades of green coffee trading, LDC first started trading instant coffee in 2020, distributing spray-dried, agglomerated and freeze-dried products. In late 2023, LDC inaugurated its first freeze-drying instant coffee factory through a joint venture with the Polish company Instanta in Vietnam.
LDC maintains a sustainability programming and marketing initiative specifically for its coffee activities called The Stronger Coffee Initiative.
“This acquisition will further expand LDC’s business in Brazil, where the Group has been active for over 80 years, complementing our existing green coffee merchandizing operations in the country,” Ben Clarkson, LDC’s global head of coffee said in an announcement of the Cacique acquisition. “With its in-depth market knowledge and recognized brand in the industry, Cacique’s highly complementary profile will strengthen and consolidate LDC’s soluble coffee activities.”
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